The protesters thronged a huge square and nearby streets in the militant group's stronghold south of Beirut, carrying Palestinian, Lebanese and yellow Hezbollah flags and banners supporting the Palestinian people.
The rally was by far the largest protest in the Arab world, where outrage over Israel's air strikes continued into a third day.
The massive rally was called for by Hezbollah leader Hassan Nasrallah who in a speech on Sunday urged crowds in the Arab and Islamic world to rise up in support of Gaza and declared Monday a day of mourning and solidarity with Gaza.
Addressing the crowds on Monday through a large screen from an unknown location, Nasrallah urged Palestinians to unite and sought to boost morale.
"Israel's air force will fail to destroy the will of the (Palestinian) fighters firing rockets ... and the residents of (Israeli) settlements 20 and 40 kilometers away from Gaza will remain either outside their settlements or in shelters," he said.
"Death to Israel," and "At your service, Gaza!" many in the crowd shouted.
Nasrallah warned Israel that any ground offensive will result in many losses for the Israelis and said Israel will fail as it did when it fought Hezbollah guerrillas in a monthlong air and ground offensive in 2006.
The overwhelming Israeli bombing campaign, the deadliest against Palestinians in decades, had killed 315 people by Monday morning.
In the Lebanon's southern port city of Sidon, around 3,000 people also staged a demonstration, many of them chanting slogans in which they insulted the rulers of Egypt, Jordan and Saudi Arabia for perceived complicity with Israel.
In Egypt, which has been particularly criticized for joining Israel in closing its borders with Gaza, thousands of people rallied, calling for the active intervention of Arab armies to protect the Palestinians.
Demonstrations were held near the parliament building and in downtown Cairo amid a massive security presence of black-clad riot police. Demonstrations in the tourist destination of Luxor, however, were prevented.
The largest protest, a crowd of up to 3,000 people outside the Journalists' Union, was organized by the opposition Muslim Brotherhood, and in an unusual move, the Islamist organization's Supreme Guide Mohammed Mahdi Akef took part, urging the crowd to make "their declaration of anger through peaceful means."
In Iran, a prominent conservative political party announced it is registering volunteers to fight against Israel in response to the attacks on Gaza.
(AP Photo/Abd Raouf)The party, the Combatant Clergy Society, has provided three options for the volunteers on its Web site to fight Israel, including in the military, financial and propaganda fields - most signing up opted for the military option.
The group said Monday it decided to sign up volunteers after Iran's supreme leader, Ayatollah Ali Khamenei, issued a religious decree to world Muslims Sunday, saying anybody getting killed while defending Palestinians in Gaza would be considered a martyr.
Separately, the political party of Iraqi Prime Minister Nouri al-Maliki issued a statement condemning the attacks and calling on Islamic countries to cut relations with Israel and end all "secret and public talks" with it.
Jordan's King Abdullah II donated blood to Gaza victims, telling reporters he was "upset" by the scale of the Israeli offensive in the coastal strip.
The violence in Gaza also prompted European reaction. In Athens, a mixed a mixed group of some 300 Arab and Greek protesters threw rocks at the Israeli embassy and scuffled with riot police, in a demonstration organized by Greece's communist party.
In Germany, Chancellor Angela Merkel has spoken by telephone with Israeli Prime Minister Ehud Olmert about the assault on Gaza. Merkel spokesman Thomas Steg said the chancellor and Olmert agreed that the "clear, sole responsibility for the situation lies with Hamas" for breaking a cease-fire.
Steg said Merkel stressed in the telephone conversation late Sunday that Israel must do everything possible to avoid civilian causalities and insisted that Hamas must immediately halt its rocket attacks on Israel.
Photos: Strikes Continue
An injured Palestinian is helped from the rubble following an Israeli missile strike in Rafah, southern Gaza Strip, Saturday, Dec. 27, 2008.
(AP)Governments across Asia called for an immediate halt to Israeli airstrikes in Gaza that have killed nearly 300 Palestinians, with some accusing the country of crimes against humanity.
"Violence aggravates conflicts and never solves them," Pakistan's Foreign Minister Shah Mahmood Qureshi said, expressing fears Israel's incursions would undermine attempts to negotiate a Middle East peace.
In Indonesia, the world's largest Muslim-majority nation, nearly 1,000 students waved Palestinian flags and chanted "Israel is the real terrorist" at the Hotel Indonesian traffic circle in downtown Jakarta.
The Indonesian government, which does not have diplomatic relations with Israel, pledged $1 million in cash and $200,000 in medical supplies for the victims of the bombings.
The vast majority of Muslims in Indonesia practice a moderate form of the faith. Although most back the creation of a Palestinian state, they do not support violence against Israel.
China, which traditionally supports the Palestinian cause but has been building stronger political and military ties with Israel, said it was shocked by the attack and called for it to end.
The Mideast peace process must continue, Chinese Vice Premier Li Keqiang said in a statement, calling for the adoption of "realistic measures to ease the tension."
Government and opposition leaders of mainly Muslim Malaysia denounced the raids on the Hamas-ruled Gaza Strip as a crime against humanity with Deputy Foreign Minister Abdul Rahim Bakri saying they were "tantamount to genocide."
Malaysia, a staunch supporter of a Palestinian state that also does not have formal political ties with Israel, said "there is no excuse for the disproportionate, indiscriminate and excessive use of force in Gaza."
India "urges an immediate end to the use of force against Palestinian civilians," a Foreign Ministry statement said. "India hopes that ongoing efforts within the region to restore peace would be supported."
South Korea said Monday it was "seriously concerned" about the worsening security condition in Gaza and asked both Israel and Hamas to stop using military power and initiate dialogue.