Marchers carried placards reading "End the genocide" and "Free Palestine" as they made their way along the route near the British parliament.
"We are here today to mark three years of the ongoing genocide in Gaza," Aimee Shalan, director of the Palestine Solidarity Campaign, told AFP.
She said UK-led Western sanctions over settler violence did not go far enough, calling for "full sanctions on Israel".
A ceasefire began a year ago and although Israel has reduced its level of attacks it has kept striking Gaza on a near-daily basis.
Strikes have killed some 1,450 Palestinians since the ceasefire, according to Gaza's health ministry.
Police said they had made "several arrests" including a man and a woman with placards of support for the banned organisation Palestine Action.
Recent graduate Hibo Hassan, 23, said she was there to show her solidarity.
"Although it is happening in the Middle East, it affects us here now," she said.
"It's extremely dystopian and that is something we should be all scared about," she added.
Another protester, a 32-year-old Kosovar immigrant who gave his name as Kobe, said his own experience of war made him want to "stand up today and not let history repeat" itself.
The "National March for Palestine" organised by the Palestine Coalition, according to police, came three days after the third anniversary of the October 7, 2023 attack.
The attack was the deadliest in Israel's history, resulting in the deaths of 1,221 people, according to an AFP tally based on official Israeli figures.
Militants also dragged 251 hostages into Gaza, 44 of them already dead.
In response, Israel launched a military offensive that has left most of Gaza in ruins and killed more than 74,200 people, according to Gaza's health ministry.
A small counter-demonstration was organised by Stop The Hate UK, a Jewish-led, pro-Israel campaign group.
Ahead of the march, London's Metropolitan police said it would be using powers under public order legislation to require anyone wearing a face covering to deliberately hide their identity to remove it.
"We will take a zero-tolerance approach to hate crime and other offending," said senior Met officer Carl Galvin.
