Police were deployed heavily around a downtown area of the capital Amman leading to the Husseini mosque where demonstrators marched after Friday prayers.
"No to the agreement of shame," protesters chanted, some carrying banners such as "Normalization is Treason" in a protest organized by a mix of opposition parties including Islamists and leftists as well as tribal groups and unions.
Jordan, Israel and the UAE signed the deal last Monday in the presence of US climate envoy John Kerry.
Under the agreement, Jordan would install 600 megawatts of solar power generating capacity to be exported to Israel, while Israel would provide water-scarce Jordan with 200 million cubic metres of desalinated water.
he UAE, which became the first Gulf state to normalize relations with Israel last year, was expected build the solar plant in Jordan.
The initiative is subject to feasibility studies, but if it comes to fruition it will be one of the largest regional cooperation projects undertaken between Israel and Arab countries, Western diplomats say.
"This deal is aimed at linking Jordan with the Zionist entity completely. It is not a trade deal, it is a normalization deal that is shameful and humiliating,” said Ali Abu Sukkar, a prominent Islamist opposition figure.
Many Jordanians oppose the normalization of ties with Israel that resulted from a landmark peace deal in 1994, which opened the way for far-reaching cooperation in energy, water and gas.
Anti-Israel sentiment runs high in a country where most of the 10 million citizens are of Palestinian origin. They or their parents were expelled or fled to Jordan in the fighting that accompanied the creation of Israel in 1948.
After the deal was announced this week sporadic demonstrations sprang up at university campuses across the country in defiance of a ban on protests. Hundreds of students chanted anti-Israel slogans and called on the government to sever ties with its neighbor and scrap the project.
