At least 11 people were injured in clashes with police.
The protestors said that the practice was racism against Ethiopian-Israelis. The blood has been discarded because of concerns that it may be contaminated.
Officials say that blood could not be donated by people from specific countries where Aids was endemic.
"We are healthy people, like everyone else," protestor Galit Maarat, 24, was quoted by the Associated Press as saying. "This is unjust, a terrible affront."
Dr Boaz Lev, the associate director in the Israeli Health ministry, told the BBC Network Africa programme: "This risk group is not specific to Israel. All over the world, it is considered a risk group. Obviously we don't want to subject out patients to even the slightest risk if you can avoid it."
Israel's Channel 2 TV recently reported that the health ministry had revived its practice of discarding blood donated by Ethiopian-Israelis.
There were similar protests a decade ago when the practice emerged. Correspondents say that many people in the Ethiopian-Israeli community feel they are the target of racial discrimination.
