Premier Chris Minns said he was "confident that with good faith" the protest would be peaceful after thousands took part in a largely uneventful rally in Hyde Park the previous weekend.
The police presence will be reduced from the 1000 officers on patrol in the protest precinct on the last Sunday to about 800 for the Saturday event.
Police leadership say they are working closely with organisers and feel satisfied people will be safe after ugly scenes marred an earlier rally at Sydney's Opera House, which was lit up at the time in Israeli flag colours.
It marks a distinct change in tone to the previous week where NSW Police urged people not to attend the Hyde Park rally and requested authorisation to use rarely deployed powers to search attendees and demand their identities.
Mr Minns condemned the organisers for their "failure to control the crowd", adding they had "proven that they're not peaceful".
"The idea that they're going to commandeer Sydney streets is not going to happen," he said after the Opera House protest.
But Deputy Commissioner Mal Lanyon said on it was not the organisations's responsibility to be able to vouch for every person who attends.
"We expect the community and those that wish to assemble to regulate themselves but where that doesn't happen, the police will be present to take action," he said on Friday.
Palestine Action Group spokeswoman Amal Naser said she expected up to 10,000 people to attend Saturday's march from Town Hall to Belmore Park after police green-lit the event.
The Executive Council of Australian Jewry, the peak body for Australia's Jewish community, declined to comment on the planned march.
Thousands of Australians have joined protests in support of Palestinians amid Israeli forces' bombardment of the Hamas-controlled Gaza Strip after a bloody incursion by the Islamist group's fighters on October 7 left more than 1000 dead.
Hundreds of demonstrators turned out to a pro-Palestine rally in Coburg, Melbourne.
A pro-Palestine protest is due to take place in Canberra on Friday, while rallies set to draw thousands are scheduled on Saturday in Brisbane, Perth and Hobart.
In Melbourne, hundreds attended a rally at Coburg on Thursday night, when the crowd paused for a minute's silence in memory of Palestinians killed in the conflict.
Western Sydney Labor MP Ed Husic, the first Muslim appointed to a federal ministry, on Thursday said the Palestinian death toll from the current conflict had surpassed the number of lives lost in the September 11, 2001 attack in New York.
"We don't see any public landmarks in Australia being lit up in red, black, white and green," he said.
In addition to the Opera House, Australian landmarks including parliament house in Canberra, the MCG and Brisbane's Story Bridge, were lit up in the Israeli flag colours shortly after the Hamas attacks.
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