Arafat died in a Paris hospital Nov.11, 2004, and was buried in the presidential compound in Ramallah.
A Palestinian state is recognized by the entire world, Palestinian Authority President Mahmoud Abbas told the crowd.
"It is up to us to lead the struggle to have its border recognized," the Hebrew Ynetnews.com site quoted Abbas as saying.
Palestinian Prime Minister Salam Fayed said the Palestinian people will not be a partner to Israel's occupation.
"No Palestinian will ever give away even a grain of sand from our land. We are all acting on ending occupation and achieving our legitimate rights," International Middle East Media Web site quoted him saying.
In Gaza, Hamas barred Fatah members from holding a memorial rally for the late Palestinian leader, the IMEM reported Wednesday.
The Web site said Hamas arrested a number of Fatah officials in Gaza in advance of the anniversary -- something Hamas officials denied. Hamas spokesman Ehab al-Ghaseen said Fatah officials had not applied for permission to hold a public event commemorating Arafat's death in Gaza, IMEM said.