Scantily clad revellers streamed alongside a procession of floats through the Mediterranean coastal city in stifling heat, ending up at a beach where a massive rave party was held.
Among the crowd were thousands of tourists, many of them holding the flags of their country of origin, as they paraded through Tel Aviv, known as a rare oasis for the LGTB community in the Middle East.
Helicopters circled above the crowds and thousands of police officers and security personnel were stationed along the route.
Shlissel had called the march an "abomination" and described his attack, in which five others were also wounded, as a religious duty.
Palestinian attacks on Israelis since October have resulted in the deaths of over 200 people from both sides.
Since its launch in 1998, the Tel Aviv Gay Pride march has become an important event for the LGTB community worldwide.
The city's municipality, which organises and funds the event, said this year's was the largest, drawing 200,000 participants.
"For me it's almost a tradition, people here are so friendly, so relaxed, yes the opposite of the image that Israel might have," he said.
Israel is widely seen as having liberal gay rights policies, despite the hostility shown by the ultra-Orthodox Jewish community towards homosexuals, particularly men.
Culture Minister Miri Regev who attended the event with gay members of her ruling Likud party said on her Facebook page to participants: "I'm proud of you ... We need to do more for you because you deserve as much as anyone else.
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