Monks at the head of the procession carried religious flags and an upside-down alms bowl, a symbol of protest.
Some monks are refusing alms from the military and their families - a religious boycott embarrassing to the junta. As the monks marched, some onlookers offered refreshments while others kept the streets clean by picking up water bottles.
The government was handling the situation gingerly, aware that restraining or abusing monks who are highly respected in predominantly Buddhist Burma could cause public outrage.
A member of one of the junta's neighborhood councils said it had been given instructions by authorities not to interfere with the protesting monks.
"We've been instructed to be patient and to even protect the monks," said the official, who asked not to be named because he is not authorized to release information.
No uniformed security personnel were in sight, although dozens in plainclothes stood by without interfering. Car and motorbikes carrying junta supporters, present at most of the previous protests, were also absent.
Rumors that a state of emergency was declared were rebutted by a government spokesman.
"You can see the government handling the situation peacefully," the Ye Htut of the Information Ministry said in an e-mail.
"Anti-government groups want to see the state of emergency because their objective is to exploit and provoke the Sangha [monks], students, workers and innocent people" and to provoke riots and anarchy, he said.
"So they use rumors to destabilize the situation."
Many bystanders clasped their hands together in a traditional gesture of respect as the procession passed.
Witnesses said the number of marchers swelled to 5,000 by the end, many of them linking arms in a human chain to protect the monks from agitators.
It was the third straight day that monks have marched in Rangoon.
Their activities have given new life to a protest movement that began a month ago after a huge government-ordered increase in fuel prices.
The protests express long pent-up opposition to the repressive regime and have become the most sustained challenge to the junta since a wave of student demonstrations that were forcibly suppressed in December 1996.
READER COMMENTS »
View reader comments » Comment on this story »