Article published on the 2009-12-28 Latest update 2009-12-30 15:53 TU
The demonstrators gathered outside the embassy after buses they had ordered to take them to the town of El-Arish, near the Gaza border, failed to turn up.
They set up camp on a pavement in front of the embassy after police threatened them with water cannons.
The bus company told them that security authorities had ordered them not to send the vehicles.
Egypt earlier banned 1,300 pro-Palestinian demonstrators from 42 countries from marching to Gaza on the anniversary of the start of the Israeli offensive against the territory.
And police stopped about 200 of them from renting boats to hold a procession on the Nile.
Among those backing the protest are US author Alice Walker and British musician Roger Waters.
Some of them, including 85-year-old Holocaust survivor Hedy Epstein, began a hunger strike on Monday to protest at the Egyptian travel ban.
An aid convoy trying to reach Gaza is stranded in the Jordan Red Sea resort of Aqaba because Cairo refuses to let it pass through its territory.
Earlier this month Egypt started blocking tunnels into Gaza. The Debkafile website reports that it is now planning to flood them and build an electronic fence.