Avigdor Lieberman claims the pact, which follows two days of heavy fighting, amounts to a "surrender to terrorism."
The fighting in Gaza casts doubt over recent understandings brokered by Egypt and U.N. officials to reduce tensions.
Foreign Minister Mohammad Javad Zarif derides a presentation by Israel's Benjamin Netanayahu as an "arts and crafts show."
During a conference with reporters, the president says that finding peace is "more difficult because it's a real estate deal."
Israeli Prime Minister Benjamin Netanyahu calls Putin to express sorrow over the plane's loss, but insists that Syria bears responsibility for the downing of the Il-20 electronic intelligence plane.
An incident involving writer Peter Beinart, who was stopped at the airport in Jerusalem, is the third in three weeks.
The rally marks further fallout from the explosive nation-state law that critics say marginalizes Israel's non-Jewish citizens. According to Israeli media, both Jews and Arabs attended the protest.