Demonstrators waved banners reading "No religion is allowed to insult any other religion" and "We demand international law to stop religious hatred".
The amateur film Innocence Of Muslims, made in the US, has sparked international unrest which has claimed lives including US ambassador to Libya Christopher Stevens.
Protest spokesman Akeel Umar said the demonstration outside Parliament is peaceful, while likening those involved in the violence elsewhere to football fans who get carried away on match day.
Police removed a bystander who shouted at the protesters: "20,000 terrorist attacks since 2001. How do you justify that?"
Mr Umar said the protesters come from a range of local Islamic organisations.
"We want to raise our concerns with the Scottish Parliament so that some necessary changes can be made with reference to Ofcom and the regulators to stop promotion of any hateful media clips," he said.
"Perhaps the laws need to be looked at and reassessed."
He said Muslims in Edinburgh are "more hurt than angry" about the film.
"The video itself was made by a director who conned some of the actors," he said. "The purpose of this video does not appear to be positively motivated. It appears to be a very negative, very poor piece of filmed documentary."
He also described the Channel 4 documentary Islam: The Untold Story, pulled from a repeat broadcast because of complaints, as "a poor piece of academic work".
Mr Umar said: "It's a shame that Channel 4 wasted everyone's time and airspace to put that type of documentary on, which was a feeling not just amongst Muslims but amongst historians, academics and professionals. It was littered with errors and random comments."
But he said he would not put The Untold Story in the same bracket as Innocence Of Muslims.
"We wouldn't hold any protests or demonstrations about that documentary or any other documentaries that have been aired before," he said.
"There is a recognition, appreciation and scope for healthy academic technical debates and discussion of course.
"We are specifically raising concerns about this (US) video and any other similar material about any religious group or sacred and special personalities with intent to cause disharmony."
The US has paid 70,000 (£43,000) for television adverts in Pakistan, showing President Barack Obama and US Secretary of State Hillary Clinton denouncing the anti-Islam film.
But Mrs Clinton's statement is "no different to any other politician", Mr Umar said.
"Clearly (the film) is nothing to do with Americans. We recognise that. I wouldn't be able to comment on anyone's sincerity but certainly we are not against Americans."
He described the violent unrest seen in other countries as "simply unacceptable".
He said: "It is just mindless violence. Every sensible person would condemn it. Everyone has condemned it and I don't think anyone in those countries where this violence has happened has approved.
"It's just random thugs going round doing things that you would get perhaps in a football match where a fraction of them go and get carried away."
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