Police and protesters clashed
The march, one of the biggest far-right gatherings in the city since World War II, was staged by members of the far-right NDP to protest against an exhibition on Nazi-era crimes committed by the German army.
The plan to go through the Jewish area had been condemned by the government and Jewish groups, but Berlin authorities had granted permission for it to go ahead on the grounds of freedom of speech.
However, the route was changed when a crowd of about 1,500 anti-Nazi protesters blocked the route, creating a tense standoff in front of the old Jewish synagogue.
Some 4,000 German police were on hand to prevent violent clashes between the two groups.
Earlier, when attempts to move the anti-Nazi protesters on peacefully failed, the police charged the crowd and used water cannon to try to disperse them. The protesters responded by pelting the police with cobble stones pulled from the ground.
Excuse to provoke
The NDP says it objects to an exhibition now showing in the Jewish quarter about war crimes committed by the regular German army, the Wehrmacht, under Hitler.
The exhibition, which has toured Germany in recent years, was prompted by concerns that the role of the regular army in Hitler's campaign of genocide against the Jews and other peoples had been overshadowed by that of the SS.
It was temporarily withdrawn in 1999 after historians established that some of the photographs shown related to Soviet, not Nazi, war crimes.
But the BBC's Rob Broomby in Berlin says many feel the exhibition is being used as an excuse by the neo-Nazis for a provocative march through the centre of the Jewish quarter.
The Jewish community described the march as a "disaster", but the Berlin authorities allowed it to go ahead, having made it clear that the federal government backs peaceful protests.
The neo-Nazis are not allowed to wear uniforms, bomber jackets or boots, or to sing Nazi songs or march in a military fashion.
'Intolerable provocation'
Chancellor Gerhard Schroeder's spokesman, Uwe-Karsten Heye, expressed the government's indignation.
"This is an intolerable provocation, especially because this march will pass in front of a synagogue on a Jewish holiday."
The government would "stand beside the Jewish community and all those who peacefully protest against the demonstration", he added.
Troubled exhibition
The NPD is a legal political party in Germany despite strong calls for its prohibition and its ostracising by mainstream politicians.
Klaus Beier, an NPD spokesman, said his party was not seeking to "provoke" Jews through the choice of its route.
"There's no taboo zone for us in Berlin," he said.
"We didn't intend to provoke the Jewish community. The focus of our march is a protest against the 'anti-Wehrmacht exhibition'."
German soldiers had been "wrongly portrayed as criminals", he said.
Berlin's Jewish community numbered about 670,000 before the Nazi genocide. There are now about 30,000 Jews in the city.