Carrying banners reading "rebuild our houses from our oil revenues", demonstrators said they would not end their sit-in until their demands were met.
They acknowledged that some aid had reached the town, but told Aljazeera's correspondent it was "nothing in comparison to the cost of the damage already inflicted by US warplanes".
They called on international humanitarian organisations to provide immediate solutions to end their prolonged suffering.
A native of Falluja told Aljazeera.net that his cousin's family of five has been living in his house since April.
"Their house was destroyed; my cousin - like me and many others - is unemployed. Where will he get the funds to rebuild his house? Fifteen people are now living in my two-bedroom house since last April. Is that acceptable?" asked Abd Allah al-Dulaymi.
"Are they not selling oil? Why they do not spend its revenues on our people?"
The people of Falluja are determined to get the interim Baghdad government's attention and hope peaceful means of airing their grievances will help them.
Aljazeera's correspondent in Falluja, Abd Al-Adhim Muhammad said participants in the sit-in had been there for more than 12 hours and would continue for at least five days.
"We hear about al-Zarqawi in the media, but have never seen or felt his presence or any of his followers in Falluja"
Dr Muhammad al-Hamadani,
The protesters hope to highlight the damage to civilian infrastructure caused by the fierce fighting between Fallujans and US-led forces.
The town of nearly half a million residents was shelled extensively and bombarded by US warplanes flying dozens of sorties in late March and most of April.
More than 800 people - mostly civilians - were killed and several mosques, hospitals and civilian homes were destroyed.
Sixth air raid
On Sunday, US warplanes bombed a house, purportedly used by Jordanian-born Abu Musab al-Zarqawi's fighters in Falluja, demolishing it and killing 14 people.
Medical and official sources in the town confirmed the number and said there were children among the casualties.
"There were 14 people killed, all men, and three wounded, also male," said Ahmad Husayn, who works in a central department in the interim ministry of health that collects tolls from Iraqi hospitals.
The strike was the sixth on the city since US forces sealed a truce with Fallujan groups in April.
Al-Zarqawi's name has figured prominently in the latest violence.
However, while statements of responsibility attributed to him or his alleged movements continue to appear on purported Islamist websites, there are some who doubt the Jordanian's ability to plan and carry out so many devastating attacks.
A woman in hospital after being
injured in a US air raid in Falluja
Some have even questioned whether al-Zarqawi survived a US air assault on his camp in Kurdish-held parts of Iraq in March 2003.
Interim Iraqi Justice Minister Malik Duhan al-Hasan, who escaped an assassination attempt on Saturday, said he did not believe al-Zarqawi was behind the attack.
The convoy carrying al-Hasan was destroyed and five of his bodyguards were killed.
An Islamist website published a statement, purportedly from al-Zarqawi on Saturday, claiming responsibility for the failed assassination attempt.
"I do not know who targeted my life, but reasonably speaking they would have to be Saddam Hussein supporters, because it was on July 17, the anniversary of Baath Party ascending to power in 1968," al-Hasan said.
Speaking to al-Arabiya Arab news channel, al-Hasan did not support claims that al-Zarqawi was the mastermind of many Iraq attacks.
"I do not believe al-Zarqawi exists. He is a made-up figure," he said.
US forces in Iraq have been saying that al-Zarqawi and his Arab and non-Iraqi Muslim fighters are hiding out in Falluja.
Dr Muhammad al-Hamadani, a Fallujan resident, told Aljazeera.net he had no knowledge about any non-Iraqi fighters in the town.
"As a Falluja citizen, and head of the Falluja Scientific Forum, I can tell you that I have never seen or heard anything about non-Iraqi fighters in Falluja.
"We hear about al-Zarqawi in the media, but have never seen or felt his presence or any of his followers in Falluja," he added.