The protesters carrying Hamas and Palestinian flags and shouting slogans against Israel and Denmark gathered near Al-Wasim mosque at the Yarmouk refugee camp.
"I'm here to defend our religion and our prophet against the harmful cartoons and to call for lifting the siege on Gaza," said protester Arabiah Mohammed al-Masri, 40.
Israel and Egypt have severely restricted access to Gaza after Hamas' takeover of the coastal strip in June. Israel further limited the movement of people and goods during a spike in rocket fire from Gaza in recent weeks.
Sheik Tawfik Takrori, a member of the Palestinian Muslims Association in Syria, said the protest was aimed at sending a message to "Our brothers in Gaza and a message by Palestinians in Syria that they are their partners in the siege."
"The siege is a US-Israeli demand, but the Arab people are able to break it and they have to," he said The protest also sought to draw attention to a recently republished cartoon depicting the Prophet Muhammad. As demonstrators marched in the streets of the refugee camp, loudspeakers called on all Muslims to defend the prophet.
The drawing, reprinted in 17 Danish newspapers earlier this month, shows the Prophet Muhammad wearing a bomb-shaped turban and was one of 12 drawings that sparked protests in Muslim countries when they were first published in 2006.
The newspapers said they were reprinting it in support of free speech after three men were arrested in an alleged plot to kill the cartoonist.
But the reproduction of the prophet cartoon sparked protests and anger in some Muslim countries since Islamic law generally opposes any depiction of the prophet, even favorable, for fear it could lead to idolatry.