More than 400 demonstrators gathered in Saja'iya, a neighborhood in eastern Gaza City that was razed during the July-August war between Hamas and Israel, urging reconstruction and calling for an end to intra-Palestinian division.
Plainclothes police officers entered the crowd, beating a number of protesters without causing serious injury, the AFP correspondent said.
They then arrested at least seven people, according to witnesses.
The Hamas-run interior ministry said in a statement that the crowd had grown violent, forcing police to intervene "to protect the lives of those participating, after which calm prevailed".
The summer war left 100,000 people homeless in the coastal territory, home to 1.8 million people.
Reconstruction of homes has barely begun.
Hamas and their West Bank-based rivals Fatah have failed to implement a unity deal they signed in April last year.
The deal was meant to hand over control of Gaza to the Western-supported Palestinian Authority, which Fatah dominates.
With Hamas continuing to control Gaza, Israel has left in place its eight-year blockade, which has largely banned the import of building materials, fearing they could be used by militants to make weapons.