"There is no victory until the hostages are back," chanted the demonstrators, many wearing t-shirts emblazoned with "300 Days", near the defence ministry in the country's commercial hub, an AFP correspondent reported.
The war between Israel and Hamas erupted on October 7 after Palestinian militants attacked Israel, resulting in the deaths of 1,197 people, mostly civilians, according to an AFP tally based on Israeli official figures.
Militants also seized 251 people during the attack, 111 of whom are still held in Gaza, including 39 the military says are dead.
"As we stand here today... dozens still remain in captivity, enduring unimaginable suffering," the Hostages and Missing Families Forum campaign group said in a statement before the rally.
"Among these hostages are two young children: Kfir Bibas, who was just nine months old when kidnapped and has now spent more of his life in captivity than out of it, and Ariel Bibas, who will mark his fifth birthday this Monday in captivity."
The forum called on the hard-right government of Prime Minister Benjamin Netanyahu to sign a truce deal that will bring the hostages home.
"The deal represents the only viable path to secure their release, end the current conflict and initiate a process of healing and reconstruction in the region," it said.
Since the October 7 attack, Israel has mounted a blistering military campaign in Gaza that has killed at least 39,480 people, according to the Hamas-run territory's health ministry, which does not provide details of civilian and militant deaths.
Israel and Hamas have traded blame for delays in reaching a ceasefire deal. Netanyahu has said several leading Hamas figures would not have been eliminated had he bowed to pressure to reach an agreement.
Thursday's rally comes a day after Iran and Hamas announced that the movement's chief, Ismail Haniyeh, had been killed in Tehran, blaming an Israeli air strike.
Israel has declined to comment.
Haniyeh was killed a day after a top military commander of Lebanese militant group Hezbollah, Fuad Shukr, was killed in an Israeli air strike.
And earlier on Thursday, Israel said it had killed Mohammed Deif, the commander of Hamas's armed wing, the Ezzedine Al-Qassam Brigades, in an air strike in Gaza on July 13. There was no confirmation from Hamas.
"I can't believe it's been 300 days" since the hostages were taken, said Osnat Sharabi-Matalon whose two brothers were seized on October 7. One of them has died, according to Israeli officials.
Emmanuel Navon, a political science professor at the University of Tel Aviv, said the hostages remained a thorny dilemma for the Israeli government.
"We do not know if we were really close to an agreement before Haniyeh was eliminated," Navon told AFP.
"We also don't know if Israeli military pressure is getting us closer to liberating the hostages than the negotiations (with Hamas)," he added.
