The conference was cut short and three dozen Israeli participants were rushed out the back door, put on Palestinian police buses and driven to safety, organizers said.
The gathering was to have marked the start of two days of meetings by a grassroots group bringing ordinary Israelis and Palestinians staging together for mock peace talks, organizers said.
Protesters said they object to attempts at normalizing Israeli-Palestinian relations at a time when Israel's military occupation of Palestinian lands continues.
Israeli and Palestinian flags were set up in the hotel's conference room.
Also Read
After word of the gathering got out, about 30 protesters showed up outside the hotel. Protesters tried to enter the hotel, but found the doors locked, and then began throwing stones that shattered several windows and glass doors.
Israeli participant Rami Cohen, a former air force pilot, said he felt uncomfortable after the stone-throwing, but expressed understanding for the protesters.
"There is more anger here than in Israel because the Palestinians suffer more than us," said Cohen, 56, who works for a high tech company in Tel Aviv. "One day, I hope it will be safe for us here in Ramallah as it is safe for us in Tel Aviv."
"When they (Israelis) come like this to the middle of Ramallah, they have another agenda, which is to clean up the face of the occupation, to show that Palestinians and Israelis are co-existing when in fact they are not," he said in a telephone interview.
The invitation to the event had said each delegation would include 20 people reflecting the entire political spectrum. It said the objective was to produce a peace agreement in five sessions over two days. It was not clear if the meetings would continue.