The five-a-side kick-about in Gaza comprised mostly of ex-prisoners protesting at Gilad Shalit's presence in Barcelona.
He was abducted by Gaza militants in a cross-border raid in 2006 and they held him for over five years.
Wearing the shirts of the two Spanish giant clubs, the Palestinians called on hosts Barcelona to deny Shalit access to Sunday night's match. They thought he had been invited by the club, although Barcelona has denied this.
"Soccer is a sport that carries the message of freedom and love but we are against it when an (Israeli) soldier is invited, because it equates between the victim and the aggressor," said Yasser Saleh, who spent 17 years in Israeli jails.
Shalit was held by his captors in solitary confinement in the Gaza Strip that is ruled by Islamist faction Hamas until his release last October. He was discharged earlier this year and has been seen at many Israeli sports events.
Barcelona said they had accepted Shalit's request to attend Sunday's clash between two of the world's most successful outfits. But when Palestinians thought the club had initiated the invitation, they vowed to protest.
To redress the balance, Barcelona invited Mahmoud Sarsak, a former Palestinian soccer player who was released from an Israeli jail in July where he was held for three years without charge, Palestinian sports supremo Jibril Rajoub, and another representative.
"The club did not invite Mr. Shalit to the game, but accepted a request to watch a match during his visit to Barcelona ... In the same manner ... the club has also accepted the Palestinian embassy's request to extend three invitations to three Palestinian delegates," the club said on its website.
"Barcelona has always wanted to promote peace and harmony in the Middle East."
Sarsak said he would not share the same stadium with Shalit.
It was not immediately clear whether the other two attended.
Barcelona and Real Madrid have a huge following among Gaza's 1.6 million population.
In a small protest in front of the Spanish consulate in East Jerusalem, a group of some 30 demonstrators held up placards with the club's insignia daubed in red paint signifying blood, and at least one trampled on a Barcelona shirt.
- Gilad Shalit