Police had intended to ban the gathering, but it was finally approved by the supreme court on an appeal launched by the far-left movement.
Old City evictions
The demonstration came amid tensions in the Old City after days of clashes between Israeli riot police and Palestinian protesters in and around the Al-Aqsa mosque and several Arab neighbourhoods of Jerusalem.
Several Palestinian families of Sheikh Jarrah have been expelled in recent months in favour of Israeli settlers on the grounds their houses belonged to Jews before the creation of Israel in 1948.
The evictions led to demonstrations that were put down by the police who arrested Israeli peace activists and pro-Palestinian foreigners.
Israel annexed east Jerusalem after the 1967 Middle East war and built new quarters to house more than 200,000 Israelis.
The annexation has never been recognised by the international community. Palestinians denounce settlements in east Jerusalem, which they want to make the capital of their future state.
In early February, the daily Haaretz revealed Israeli authorities had given the green light to a project to build 600 homes in an area set aside for settlement in the eastern sector.