The protest, organized by the Islamic Movement in Israel group, was held on Saturday. The movement's leader Raed Salah and Mayor of Nazareth Ali Sallam, took part in the demonstration.
"This event is not an act of protest against the insult to Prophet Muhammad, but rather an insult against all prophets everywhere, including Moses and Jesus," the Islamic Movement's deputy head Husam Abu Leil was quoted as saying by the Haaretz following the demonstration.
The Haaretz cited Mayor Sallam calling on Charlie Hebdo's distributors to "apologize for such a serious insult" against the local and international Muslim communities.
In January, Islamist gunmen killed 12 people at Charlie Hebdo's headquarters in central Paris, including editorial staff.
In response to the massacre, many media organizations reproduced the cover of a post-attack edition of the magazine, depicting Prophet Muhammad holding up a "Je suis Charlie" (I am Charlie) sign, a slogan of solidarity with the slain Charlie Hebdo staff.
The satirical weekly has published its commemorative issue with the record print run of 3 million copies, followed by 2 million after it sold out in mid-January.