The two bodies, wrapped in blue and white prayer shawls, were laid out on a podium.
Many mourners had tears streaming down their faces as a rabbi delivered a eulogy asking: "Why, why, why?"
The couple's two-year-old son, Moshe, survived the attack. He was found crying next to their bodies by his Indian nanny, Sandra Samuel.
She hid in a cupboard when the centre was attacked, but emerged to rescue the child after his parents were killed.
Ms Samuel was given a passport at the last minute and travelled to Israel with the young boy and his grandparents for the funerals.
The Israeli foreign ministry was said to be considering granting Ms Samuel the status of "Righteous Gentile" - one of the highest honours Israel can bestow on non-Jews - which would allow her to remain in Israel for some time.
The Holtzbergs will be buried on Jerusalem's Mount of Olives.
In Mea Sharim, an ultra-Orthodox enclave in Jerusalem, thousands of people mourned Aryeh Leibish Teitelbaum, a 38-year-old US citizen who lived in Jerusalem.
Mr Teitelbaum was in Mumbai last week supervising the preparation of kosher food.
They were the mother and father of the Jewish community in Mumbai
Shimon Rosenberg Father of the late Rivkah Holtzberg
A funeral was also held for Mexican citizen Norma Schwartzblatt-Rabinowitz. The mother-of-two had been planning to move to Israel to live with her daughters, media reports said.
Earlier, a brief ceremony was held at Ben Gurion airport near Tel Aviv as the flag-draped coffins arrived.
Among those on the Israeli air force plane were the parents of Gavriel and Rivkah Holtzberg, who had attended an emotional ceremony at a Mumbai synagogue on Monday.
"The house they built here in Mumbai will live with them," Rivkah's father, Shimon Rosenberg, told about 100 mourners at Keneseth Eliyahoo synagogue.
"They were the mother and father of the Jewish community in Mumbai," he said. "The House of Chabad will live again."
The Chabad centre was stormed on Wednesday evening by armed militants who seized hostages and fought a gun battle with Indian commandos.
Indian forces eventually regained control of the centre, killing several gunmen, but six of the hostages were found dead.
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