PNG Prime minister Peter O'Neill has blamed agitators and criminal elements for a violent confrontation between students and police that resulted in injuries but, contrary to earlier reports, no deaths.
Mr O'Neil said a small group of students threw rocks at police, who responded with tear gas and warning shots.
Five were treated at Port Moresby General Hospital and are reported to be in a stable condition.
Earlier reports, based on eyewitness accounts, claimed at least four people had been killed and at least 15 injured.
Mr O'Neill and his police minister Robert Atiyafa have denied any students were killed.
Australian Prime Minister Malcolm Turnbull said he had talked to Mr O'Neill, who told him there were some injuries but no one had been killed.
"Our High Commissioner is keeping us abreast of it and we obviously will continue to offer support to the PNG Government in terms of the administration and training of their police," he told ABC television.
Foreign Minister Julie Bishop said she was seeking further information from the High Commission and Australian Federal Police who helped train PNG police.
She said it was known that some students had been shot.
"But we are still trying to determine whether there have been deaths and how many have been injured," she told reporters.
She urged calm, as protests continued into the evening in Port Moresby.
"We call on all sides for calm to de-escalate the tensions and certainly call on all sides to respect the peaceful and lawful right to protest," she said.
Port Moresby has been wracked with political unrest in recent weeks, with calls for Mr O'Neill to resign.
PNG police are believed to have opened fire on a group of students who planned to march from the university campus to parliament to demand Mr O'Neill face corruption allegations.
One University of PNG student, Levana Lenaord Vanua, said he had seen at least two students shot dead and a bullet grazed his arm.
Mr Vanua said the students were trying to protest peacefully.
Another student David Rupa was on his way to work when he saw the events unfold around 9am on Wednesday.
He heard three shots and says police were bashing girls.
"It seemed like it was a war, and students were very defenceless," he told AAP.
"I could see students running everywhere for cover."
Mr O'Neill said the protests were driven by people who were not students.
He has launched an inquiry into the continuing protests, promoted by those he termed "agitators" and "criminal elements" with political agendas.
He suggested members of the opposition had been encouraging students to pursue their demands for him to step aside.
The Australian Department of Foreign Affairs has updated travel advice for PNG to take in the latest unrest, urging Australians to be very careful in all parts of Port Moresby where there were also reports of looting and unrest.