Helen O'Sullivan is accused of using a phrase controversially banned in Queensland as she addressed the Brisbane rally before police stepped in.
O'Sullivan was among about 50 people who had gathered outside Brisbane Magistrates Court on Tuesday supporting fellow flotilla member Sam Woripa Watson and dozens of others charged over phrases outlawed in Queensland.
She was arrested following what police called a "political disturbance".
"The 64-year-old woman from Labrador was charged with one count of recital, distribution, publication or display of prohibited expressions," a Queensland Police spokesperson told AAP.
About 26 people on Tuesday faced charges under the Liberal National government's hate speech laws that outlaw phrases such as "from the river to the sea".
"We are speaking against the Crisafulli government that is attempting to silence valid criticism of the state of Israel," O'Sullivan told the rally on a loudspeaker.
"From the river to the sea is a call for democracy and freedom."
Police initially did not intervene as O'Sullivan continued to address the crowd.
"On behalf of all children of Palestine, I am saying from the river to the sea, free free Palestine from apartheid, from illegal occupation, from genocide," she said.
Officers moved in to arrest O'Sullivan soon after Watson and others previously charged with prohibited expression entered the court building.
O'Sullivan is due to appear in Brisbane Magistrates Court on July 14.
Watson said outside court he intended to contest the charge if a High Court challenge to the validity of the law was not successful.
"If the law is not repealed I will be pleading not guilty," he said.
Watson said he was not afraid of a potential two-year prison sentence.
"Don't be afraid of these laws. Every generation has had to stand up for their rights. This is our turn," he said.
Inside court, Watson's barrister Alex White asked magistrate Lewis Shillito for the matter to be adjourned to December 2 for a legal decision over whether the laws were constitutional.
Many other defendants facing court on Tuesday planned not to enter pleas as they also waited for the outcome of any High Court challenge.
O'Sullivan and Watson were detained by the Israeli military in May alongside nine other Australians who took part in a convoy of small boats with the stated aim of bringing humanitarian aid to the Gaza war zone.
Watson allegedly used the "river to the sea" phrase during a speech to about 300 people in Brisbane's King George Square after being returned to Australia from Israeli custody.
Queensland in March banned the phrases "from the river to the sea" and "globalise the intifada", categorising them as hate speech against Jewish people under new "fighting anti-Semitism" legislation.
The highly contested phrases are viewed by some to advocate for the genocide of Jewish people from the Jordan River to the Mediterranean Sea.
The laws were a "common sense" response to the Bondi terror attack, Queensland Attorney-General Deb Frecklington said in February.
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