Olmert remained defiant, hoping to beat back a wave of calls for him to step down. A day after his popular foreign minister joined the chorus, Olmert's aides argued it was not a mortal political blow, but conceded a large-scale public protest campaign could bring him down.
Turnout on the square in front of Tel Aviv's City Hall appeared to top 100,000, but police refused to estimate the crowd's size.
The rally drew a cross-section of Israelis - moderates and hard-liners, secular and religious, young and old, a rare mix symbolizing the widespread dissatisfaction with Olmert.
On a warm, muggy night, the crowd was well-behaved, and hundreds of police stationed around the square had nothing to do. Demonstrators carried signs reading "Elections now" and "Olmert, go home." A small group held aloft a mock black coffin labeled, "Government, RIP."
"Failures, Go Home!" read a banner erected behind the podium, referring to Olmert and Defense Minister Amir Peretz, a lesser target of the war inquiry's criticism. Parents of soldiers killed in last summer's conflict spoke to the crowd from the podium.
Organizers decided not to let politicians speak at the rally, said retired Gen. Uzi Dayan. "There are no politicians here, but this is a political event," he said.
Moshe Muskal, 50, whose son Rafnael was killed in the war, was among parents who addressed the gathering. "I am glad that the public is not passive or despairing," he told The Associated Press afterward. He said the soldiers "fulfilled their mission fully. Our mission is to make our country a little bit better."
The protesters came from all over Israel, including 35 who walked 45 miles from the southern town of Sderot, a frequent target of rockets fired by Palestinians in Gaza.
Edan Mehallel, 16, of the port city of Haifa, said he lived through the Hezbollah rocket attacks during the war and came to make a difference. "The more people there are, the more influence the demonstration will have," he said.
Ariela Kaszovitz, who moved to Israel 17 years ago from New York, demonstrated with her husband and four children. She said Olmert made too many mistakes. "Let someone else run the government," she said.
Some previous political demonstrations in Israel have attracted hundreds of thousands of protesters, and the size of this one was seen as a critical sign of the extent of public anger.
Past protests in the Tel Aviv square have started political earthquakes. A demonstration after Israel's hard-fought 1973 war to turn back invasions by Egypt and Syria led to the resignations of Prime Minister Golda Meir and Defense Minister Moshe Dayan.
Israel went to war against Hezbollah guerrillas in Lebanon on July 12 after guerrillas crossed into Israel, killing three soldiers and capturing two.
For many Israelis, the 34-day war was a failure because it didn't achieve the two main goals Olmert set - returning the soldiers and crushing Hezbollah, which fired nearly 4,000 rockets at northern Israel. The conflict killed 158 Israelis and more than 1,000 Lebanese.
A commission appointed by Olmert to investigate the war accused the premier of "hasty" decision-making, failing to consult others and neglecting to assess the chances that his goals could be accomplished.
The report covered the first six days of the war and the six years that led up to it. A report on the full war is expected this summer.
Leaders of the ruling Kadima Party rallied around their beleaguered chief Thursday, mindful that a mutiny could lead to elections that opinion polls indicate would be won by hawkish former Prime Minister Benjamin Netanyahu's Likud party.
Under Israel's parliamentary system, Kadima could switch its leader without losing power. The prime minister is not directly elected and usually comes from parliament's largest bloc.
Israel's parliament held a special session on the war report, where Netanyahu appealed for new elections.
"We must redress the primary flaw the report identifies - the lack of a seasoned leadership, the lack of responsibility, the inability to make tough decisions and carry them out," he told a sparsely attended session.
Olmert was present in the chamber, but did not speak.
Even if Olmert weathers the current crisis, two upcoming events are expected to pose even greater challenges: a party primary and the final report on the Lebanon war.
Olmert's main coalition partner, Labor, is scheduled to hold a May 28 primary for party leader that is expected to oust Peretz. A new Labor leader might well decide to bolt the coalition, which almost certainly would be a fatal blow to Olmert's government.
Even Kadima optimists doubted Olmert could stay in power if the final Lebanon report was as harsh as the first.
Also auguring poorly for Olmert's political survival is the history of protests at the plaza where protesters massed Thursday night.
In 1982, hundreds of thousands marched to the square to protest Israel's involvement in the massacre of Palestinian refugees in Beirut by a Christian militia, a step toward the resignation of then-Defense Minister Ariel Sharon and the eventual retirement of Prime Minister Menachem Begin.
And in 1995, after a peace rally, Prime Minister Yitzhak Rabin was assassinated in the square by an Israeli opponent of his policy of compromise for peace with the Palestinians. The square was renamed for the fallen leader.