Israeli media says about 30,000 people gather in Tel Aviv calling for PM to be replaced in March 17 national elections.
Israeli Prime Minister Benjamin Netanyahu has denied reports that he had backed away from support for a two-state solution that he expressed in a 2009 speech.
A statement from Netanyahu’s right-wing Likud party on Sunday stated that the prime minister had said that “in the present situation in the Middle East, any vacated territory will be immediately overtaken by radical Islam and terrorist organisations sponsored by Iran.
“For this reason, there will be no withdrawals and no concessions, this is simply irrelevant.”
But responding to media reports based on the statement, Netanyahu’s office later said the prime minister had “never said such a thing”.
The Likud statement also said Netanyahu called his “Bar Ilan” speech in 2009, which supported the possibility of a demilitarised Palestinian state, “irrelevant”.
That comment was also denied by his office, which said he has long adhered to a policy that “under current conditions in the Middle East any land that is handed over would be grabbed by Islamist extremists”.
The original Likud party statement garnered a strong rebuke from chief Palestinian negotiator Saeb Erekat.
“When Mr Netanyahu was given a choice between settlements and peace he has repeatedly chosen settlements”, Erekat told Al Jazeera.
“When given the choice between negotiation and dictation he has chosen dictation … Netanyahu’s policies are a major threat to peace and stability in the region.”
The international community has long pushed for the creation of a Palestinian state on lands captured by Israel in the 1967 Middle East war.
In 1993, Israel and the Palestinians signed an interim agreement that was to lead to the end of the Israeli-Palestinian conflict.
Numerous rounds of negotiations have been held since then, with the most recent talks breaking down last year.
Ahead of national elections, centrist and leftist political parties in Israel have said they support the resumption of peace efforts with the Palestinians.