JAKARTA, Indonesia—President Joko Widodo postponed a state visit to Australia, citing unrest at home, after a massive protest called by hard-line Muslims against the capital’s Christian governor drew 200,000 demonstrators and stoked worries about deepening religious tensions in a nation long known for its moderate brand of Islam.

Ahead of Friday’s rally, Jakarta was on edge for days, with leaders fearing the largest gathering in the capital in years could erupt into violence. The protest, in downtown Jakarta next to the presidential palace, was peaceful during the day, with some 20,000 police and security personnel looking on, but gave way to minor clashes with police and scattered reports of looting in the evening.

On Sunday, Mr. Widodo, speaking with Indonesians in Australia in a videoconference, said conditions had returned “100%” to normal.

Mr. Widodo on Saturday postponed a three-day state visit to Australia, which was to begin Sunday, because of “conditions in the country that require the presence of the president,” the presidential palace said in a statement.

Mr. Widodo had spent Friday on the outskirts of the capital, checking work projects at the city’s international airport. Protesters demanding to speak with him at the presidential palace met with Vice President Jusuf Kalla instead.