Shalit was abducted by Hamas in a cross-border raid in 2006 and protesters called on the Israeli government to accept Hamas' terms for a prisoner swap to gain his freedom, Haaretz reported.
Shalit's family didn't attend the observance, but a letter written by his grandfather, Zvi Shalit, was read to the gathering.
"The people involved talk to us from time to time, caress our heads, but my dear grandchild Gilad is still rotting away in the Hamas cellars having done nothing wrong, like a common criminal," Zvi Shalit wrote.
Zvi Shalit said Defense Minister Ehud Barak told him he supports the prisoner swap offer, but Prime Minister Binyamin Netanyahu "is opposed and cannot be persuaded otherwise."
"I fear Netanyahu is waiting to hear, God forbid, that Gilad did not survive the conditions he was kept in, so he could pay a lesser price for his return," Zvi Shalit wrote in his letter to the government.