A male singing troupe dressed in military camouflage shouted: “Gaza is free. Gaza is steadfast,” as they marched in procession.
Hamas took full control of the Gaza Strip two years ago after forcing out security forces loyal to Mahmoud Abbas, the Palestinian president and leader of the rival Fatah faction.
Organisers said the celebrations revelead growing popularity for the political movement.
“The Palestinian people’s trust in the Islamic Resistance Movement, Hamas, increases day by day,” Abu Talha, head of popular activities in Hamas, told the Reuters news agency.
Al Jazeera’s Sherine Tadros, reporting from Gaza, said it was “incredibly important” for Hamas that significant numbers turn up at the rally, with ongoing hardships in the strip threatening to affect the movement’s popularity.
“People have come here today and they are still supporting Hamas’ control over Gaza,” she said.
Gaza is continuing to struggle with poverty amid an ongoing blockade, while also recovering from Israel’s war on the territory earlier in the year.
Hamas has been unable to rebuild homes, sewage lines and water pipes destroyed in the offensive because Israel and Egypt continue to enforce a border blockade.
Basic goods, such as food and some medicines are allowed into Gaza, but construction materials are not.
Israel first sealed Gaza’s borders in June 2006 after fighters captured Gilad Shalit, an Israeli soldier.
It was tightened a year later, when Hamas took control of the coastal strip, ousting forces loyal to Western-backed Mahmoud Abbas, the Palestinian president.
Hamas, an offshoot of the Muslim Brotherhood, was formed in 1987 at the beginning of the first intifada against Israel’s occupation in the West Bank and Gaza.
The group, which has carried out dozens of suicide bombings since the 1990s, is considered a terrorist group by Israel, the US and European Union.
The group aims to establish an Islamic state in the region and does not recognise Israel’s right to exist.
It has also opposed plans by Mahmoud Abbas, the Palestinian president, to seek a permanent deal with Israel.