Katsav's resignation from the presidency took effect on Sunday, clearing the way for his immediate indictment.
Meni Mazuz, Israeli's attorney-general, had originally planned to press rape and sex assault charges that could have sent Katsav to jail for 20 years.
Four women have accused the former president of sex offences.
Crowd demands justice
"There's no such thing as rape lite,'' read one of the posters hoisted by the crowd, which included leading female politicians.
Yael Dayan, a former politician and prominent Israeli women's rights advocate, said: "We are asking to hear the evidence. We don't demand mercy, we demand justice.
"We are calling on the courts to have the courage not to approve the deal.''
|"We are asking to hear the evidence. We don't demand mercy, we demand justice"|
Katsav resigned on Friday as part of the deal, just two weeks before his seven-year term was to expire.
He is set to receive a suspended prison sentence and be required to pay damages to two of his four accusers, all former female employees, under the plea deal.
The four women, who worked with Katsav either in the president's office or when he was tourism minister in the late 1990s, painted a picture of a predatory boss who repeatedly used his authority over female employees to force sexual favours.
Many in the crowd wanted Mazuz to resign for failing to put the president on trial.
The attorney general has told Israeli TV that Katsav had behaved like a serial sex offender, but most of the allegations against him referred to events that could not be brought to court under Israel's statute of limitations.
He also said conflicting testimony from witnesses would make it hard to ensure a guilty verdict on rape charges.
Katsav, who painted himself as the victim of a witch hunt, stepped aside in January to fight the charges but refused to resign.