More than 5,000 people attended the march that began at the Gaza headquarters of UNRWA, including senior figures from the enclave's Islamist rulers Hamas and other political factions.
The agency announced it would cut more than 250 jobs in Gaza and the West Bank and make over 500 other positions part-time, as it seeks to survive crippling financial shortfalls caused by US aid cuts.
Washington has provided more than $350 million a year for the agency, but US President Donald Trump pulled all funding earlier this year.
More than five million Palestinians are eligible for UNRWA support, while around three million access its services.
The job cuts have sparked fierce protests, with UNRWA's head in Gaza accusing the agency's labour union in the enclave of "mutiny".
During Wednesday's demonstration union representative Amir al-Mashal announced "a full strike in all UNRWA agencies on Monday, as a first step of protests."
He called on Palestinian president Mahmud Abbas to intervene.
Around 80 percent of Palestinians in the impoverished Gaza Strip are eligible for UNRWA aid, while the agency employs around 13,000 people there.
Unemployment is high in the enclave and employees say their families will be at risk if they are laid off from the agency.
The United Nations warned last week that the situation in Gaza is "catastrophic" after 11 years under a crippling Israeli blockade, during which Hamas and Israel have fought three wars.
Eyewitness? Submit your stories now via social or:
Email: eyewitness@pulse.ng
![Ukrainian President, Volodymyr Zelensky and US President Joe Biden [BBC]](data:image/svg+xml;charset=utf8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20width%3D'300'%20height%3D'172'%20data-ring-placeholder%3D'1'%3E%3C%2Fsvg%3E "Ukrainian President, Volodymyr Zelensky and US President Joe Biden [BBC]")
