Eight people have been arrested after a protest camp was set up on the green in Parliament Square.
Campaigners want troops to withdraw from Iraq
Dozens of people erected tents on the grass on Sunday as part of the "No More Fallujahs" demonstration against British action in Iraq.
The protest marked the second anniversary of coalition forces beginning their assault on the city.
One protester has been charged with unlawfully demonstrating without authority, said police.
Seven others have been released, and six of them could face prosecution for unauthorised protest.
According to protest organisers Mass Action Group, more than 100 people camped out on Sunday night at the unauthorised demonstration. Police said the figure was nearer 50.
The Serious and Organised Crime and Police Act bans anyone from protesting within 1km of parliament without prior permission.
Campaigners Maya Evans and Milan Rai plan to read out the names of those who have died in Fallujah.
Ms Evans said: "The occupation has killed tens of thousands of Iraqis, helped to push Iraq into a civil war, and is acting as a recruiting sergeant for extremists across the Muslim world, endangering both Iraqis and ourselves.
"Moreover 78% of Iraqis believe the occupation is causing more conflict than it prevents.
"It's time to end Britain's participation in this disastrous and immoral occupation."
A Metropolitan Police spokesman disputed protesters' claims that officers had been dismantling the tents.