Tensions were running high following two weeks of bloody Israeli-Palestinian clashes in the West Bank and Gaza Strip that left nearly 100 people dead, most of them Palestinians.
Demonstrators carried placards equating Israelis with the Nazis. One sign demanded of Israeli Prime Minister Ehud Barak, "How many children have you killed today?"
When an Israeli flag was set ablaze to cheers, organizers moved quickly to disperse the crowd.
Earlier, one of the organizers handed three Israeli flags over to police to stave off just such an incident.
"The people were able to express their sadness ... for those who've died, and at the same time express their anger at the Israelis," said rally organizer Rashad Saleh.
Speeches from several Palestinian community leaders called for recognition of their nationhood and demanded international intervention to end the violence.
(AP)