Waving banners and anti-war flags in Sydney's Hyde Park, demonstrators called for an end to nuclear weapons and the Israeli offensive in Lebanon.
"We are one human race, we are saying what Israel is doing in Lebanon and Gaza is savage ... and has no place in any civilised society," Keysar Trad, founder of the Islamic Friendship Association of Australia, told the rally.
Some protesters waving Lebanese flags chanted "Down, down Israel" as they marched through the city centre.
Three weeks of fighting has left about 1,000 dead in Lebanon and Israel, since the militant group Hezbollah abducted two Israeli soldiers and Israel responded with a devastating air and ground offensive.
More than 140,000 people were killed and tens of thousands fatally injured when the United States dropped a single atomic bomb on the Japanese city of Hiroshima in 1945.