The period of silence marked 1 minute for each year the soldier has been held in Gaza, Israel's Channel One reported.
Images broadcast from around Israel showed thousands observing the tribute, standing still in the streets.
A siren sounded throughout the Knesset building in Jerusalem, signaling a halt to activities for the 5 minutes of silence.
In Eilat, President Shimon Peres and other key government officials observed the tribute in the midst of a conference.
Activists blocked key intersections throughout the country, motorists stopped their cars and workers in offices and stores participated in the tribute.
Organizers of the "standstill" said it was aimed boosting public awareness to the failure of the government to secure Shalit's release.
"There's no doubt that this is an important event of support and solidarity, as well as a test of whether the public stands behind us. I hope the decision-makers won't ignore the will of the people," Noam Shalit, the soldier's father, told Haaretz.
"This is an initiative by people we didn't know and we weren't party to the move," he said. "But it turns out there are people who got up one morning and said they don't understand what's happening here and how the state goes on without managing to return a soldier after almost half a decade, when he is only a few kilometers from the southern border of Israel and is being held by a few terrorists."
Gilad Shalit was on duty near the Gaza border in June 2006 when he was abducted and taken to Gaza. He has been held incommunicado ever since.