Bhushan said government and police were discussing with Hazare and his aides options of fast venue -- JP Park or Ramlila Maidan -- where he could launch his fight for a strong Lokpal.
He said if conditions are imposed, then Hazare will continue with his fast inside the jail.
He also told the crowd that people of Delhi have been asked to come to India Gate for a march to Jantar Mantar in support of a strong Lokpal and fight against corruption.
Hazare had earlier sought permission from Tihar Jail authorities for a meeting with some of his top associates to plan his strategy.
The meeting was attended by Bhushan, Kiran Bedi, Medha Patkar, Manish Sisodia and Swami Agnivesh. Deputy Commissioner of Police (Crime) Ashok Chand was also present at the meeting. Hazare also met Sri Sri Ravishankar and yoga guru Ramdev in the prison.