Riot police from the administration of Republika Srpska (RS) - one of the two entities which makes up post-war Bosnia - wore balaclavas under their helmets so that the rioters could not identify them.
Ten people were injured, an Islamic flag was burned and replaced with a Bosnian Serb emblem, several cars were damaged, and buses which ferried in Muslim refugees for the ceremony were overturned and set on fire.
Bosnian Serb police - some of whom exchanged handshakes and jokes with people in the crowd - later evacuated those trapped.
Mr Klein told the BBC that the ceremony would be rescheduled and work to overcome ethnic tensions would continue.
"The policies go on, this is just another setback. We have to continue appealing ot the 80 or 90% of people who want to move forward, who want to reconcile," Mr Klein said.
Rioting
The Serb nationalists were involved in a day of violent rioting. Police had to form a corridor of shields to evacuate about 300 visiting Muslims, as well as international officials and government ministers.
Riot police from the administration of Republika Srpska (RS) - one of the two entities which makes up post-war Bosnia - wore balaclavas under their helmets so that the rioters could not identify them.
Many of the Serb nationalists were believed to have been bussed in from other parts of the RS to disrupt the ceremony.
The crowd - estimated at several thousand - broke through police lines shortly after the ceremony was due to begin.
Chaos
The BBC's Alix Kroeger, who is in Banja Luka, says the owner of one small cafe allowed around 25 Muslim returnees to take shelter on his premises.
They crouched under tables, fear etched on their faces, as demonstrators gathered outside.
Bosnian Serb demonstrators turned a pig loose on the site of the mosque as a warning to the Muslim refugees who had returned for the re-dedication ceremony.
Cars belonging to visiting dignitaries were overturned, smashed up and set alight.
Hundreds of Muslims as well as the US ambassador, the head of the UN mission and Muslim clergy took refuge in a building near the mosque site, where the nationalist protestors congregated.
The crowd hoisted a Serb nationalist flag on the building.
"This is Serbia", they chanted, "we don't want a mosque".
They called the name of Radovan Karadzic, an indicted Bosnian Serb war criminal and raised the three-fingered Serb salute.
Refugee return
The ceremony - which had received strong backing from the international community - was to mark the first step in the rebuilding of the Ferhadija mosque, which was blown up in 1992.
It was intended as a sign that it was safe for the Muslims, who fled the area during the ethnic cleansing campaigns of the Bosnian conflict, to return to the city.
But our correspondent says the experience of these riots has left them even more terrified for their safety.
On Saturday, a similar rebuilding ceremony was scrapped in the southern town of Trebinje after Serb nationalist protests.