The official rally appeared to be aimed at channelling public anger sparked by the killings, with a huge crowd beginning to gather shortly after dawn in Addis Ababa's huge Meskel Square. However, some demonstrators directed their anger at the government.
"Our brothers were murdered, the government must do something," shouted Anteneh Tefera, a young demonstrator. "Their blood is not the blood of animals."
The murders have horrified Ethiopians and sparked global condemnation, including from Pope Francis who expressed his "great distress and sadness".
It showed one group of about 12 men being beheaded on a beach and another group of at least 16 being shot in the head in a desert area.
"We gather to commemorate the innocent children of Ethiopia butchered by terrorism and burned to death by xenophobia," said one speaker on the podium, also referring to the wave of violence against immigrants in South Africa.
Protesters responded by singing, "Enough immigration! Change our country by staying home."
At least two of those killed were trying to cross to Italy when they were captured, their families have said.
Many travel to Libya and other north African nations for jobs, as well as to use it as a stepping stone before risking the dangerous sea crossing to Europe.
Europe's southern shores have been swamped with migrants fleeing war and hardship, hundreds of whom have died in a string of tragic shipwrecks.
Almost two-thirds of Ethiopians are Christians, the majority of those Orthodox Copts -- who say they have been in the Horn of Africa nation since the first century AD -- as well as large numbers of Protestants.
"ISIS doesn't Represent Islam," read one banner held by protestor.
"Our peace and our unity will never broken by the extremists," another read.
But despite a heavy police presence, several anti-government slogans were heard.
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