"We call on all the factions to undertake efforts to contain the enemy and halt its aggression by planning martyrdom operations," Ahmed Abu Helbiya told a crowd of over 2,000 protestors.
Helbiya saluted recent attacks in Jerusalem, including a shooting in March at a Jewish seminary that killed eight students and an incident earlier this week when a Palestinian crashed a car into a group of Israeli soldiers, wounding 16 people before being shot dead.
Neither attack was claimed by any armed Palestinian faction, and Israeli authorities said both were apparently carried out by disgruntled individuals.
The demonstration was organized by Hamas - which seized control of Gaza in June 2007 after routing forces loyal to Palestinian President Mahmud Abbas - and the more radical Islamic Jihad, both of which are sworn to Israel's destruction.
It was held in honor of Al-Quds Day, an annual observance declared by Iran after its 1979 revolution that features mass protests in solidarity with the Palestinians.
Protestors waved the green and black flags of Hamas and Jihad as young boys from local scout troops carried signs reading "On International Al-Quds Day I am at your service, Jerusalem."
A truce between Israel and Hamas that went into effect three months ago halted fighting in and around the impoverished territory, though Palestinian militants still occasionally fire rockets and mortars over the border.