Protesters carried signs that said "Bibi, don't divide the Jewish people" and "Judaism without coercion," among others.
The demonstration, which was organized by the Reform and Conservative movements and the Women of the Wall group, began after the end of Shabbat with the Havdalah ceremony and religious songs.
"This is a moment of opportunity, anyone who believes in equality should fight for this issue," said leader of Women of the Wall, Anat Hoffman. "Today it's the Western Wall plan, tomorrow it could be a barrier (separating men and women) at the bank and the post office. They won't stop there."
Maj. Gen. (res.) Noam Tibon called on Prime Minister Benjamin Netanyahu to remedy the damage he said was caused to Israel's relationship with US Jewry.
"The Israeli government has decided to turn its back on millions of Jews around the world," Tibon said. "I tell the prime minister: you caused strategic damage to the State of Israel. It's not too late to fix it. It's more important than political survival. Your word should be a word of honor."
Tibon also had a message to the ultra-Orthodox, "It is time to show courage. You of all people should understand that you don't do to another what is hated by you. All Jews are responsible for one another."
Yizhar Hess, the executive director of the Conservative Movement in Israel, slammed the government's decisions. "With impertinence, short-sightedness, arrogance, and—for some members of the government—wickedness, two decisions were made to boycott the Jewish people. This is BDS made in Zion and Jerusalem," he accused.
"Canceling the Western Wall agreement and advancing the new conversion bill are things that hang over us like a black cloud, which discredits the State of Israel from calling itself the nation state of the Jewish people."
The liberal Jewish movements are protesting a government decision to advance the conversion bill, which would enshrine into law the ultra-Orthodox Chief Rabbinate's monopoly over conversions, determining that only conversions done by the state would be recognized for the purposes of the Law of Return.
The bill seeks to bypass a ruling by the High Court of Justice, which determined a year ago that private conversions done in Orthodox communities must be recognized, even though they were not done by the state.
In the wake of the outcry over the advancement of the bill, which was approved by the Ministerial Committee for Legislation, Netanyahu said he halted the legislation process until a team appointed to examine the matter submits its recommendations in six months' time.
In addition, liberal Jews are furious over a government decision to freeze an agreement reached last year to recognize and expand an egalitarian prayer area at the Western Wall.