The Metropolitan Police says all of the arrests made during the demonstration at Trafalgar Square were for showing support for a proscribed organisation.
A statement posted on social media, said 523 people were arrested with ages ranging from 18 to 87.
"We are grateful to all the officers involved for their professionalism," the statement said.
Palestine Action was banned for breaking into a UK air base and spray painting two military planes in 2025. The protesters also targeted arms manufacturers in Britain that were selling Israel weapons amid the war in Gaza.
The gathering was the first since London's High Court ruled in February that the ban designating it as a terrorist organisation was unlawful.
UK Interior Minister Shabana Mahmood has been granted approval to appeal the ruling.
Hundreds of protesters, many of them elderly, gathered in Trafalgar Square on Saturday afternoon with signs reading "I oppose genocide. I support Palestine Action".
Police officers could be seen carrying a woman from the protest as people chanted "shame on you".
Police then lifted a man out in handcuffs and walked an elderly protester with a walking stick to the police vans.
One woman shouted: "Yeah she looks like a terrorist, doesn't she mate?"
Protesters, some of whom were carried by their ankles and under their arms by officers, were led to an area at the side of Trafalgar Square surrounded by a metal fence.
In March, the force said officers would resume arresting suspected Palestine Action supporters, as the High Court battle over the ban on the group continues.
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