Speakers on a podium condemned the British government after Foreign Secretary William Hague said the Hamas regime running the Gaza Strip bore "principal responsibility" for the escalation of violence.
The rally was called by the left-wing Stop the War Coalition, the Palestine Solidarity Campaign (PSC) and the Campaign for Nuclear Disarmament.
PSC director Sarah Colborne said demonstrators wanted to show their opposition to the Foreign Office's standpoint.
"We are insisting that the British government uphold international law and human rights and tells Israel to end its war now," she said.
"It's very clear what is happening here. Gaza is under siege. Israel started this by assassinating the person who was trying to negotiate a long-term truce with Israel. It's very clear who started this and who is suffering," she said.
Protesters waved placards reading "End the criminal siege on Gaza", "Free Palestine" and "Gaza -- stop the massacre".
Manuel Hassassian, the Palestinian Authority's envoy to Britain, said the flare-up of violence signalled the "beginning of the end" for Israel, which was "digging its grave".
"The conflict is going towards convulsive violence, towards insecurity, towards de-stabilisation," he added.
He said Palestinians were "very frustrated with the British government on its stand in supporting Israel in defending itself. "The international community is watching the Israelis killing the Palestinians and inflicting so much damage on them and their properties without outright condemnation," he said.
Hundreds took part in a similar rally in Edinburgh.