Militia troops marched in formation to the palace wearing fatigues and chanting: "The people, united, will never be defeated!"
Chavez rallied the crowd from a balcony, vowing to win re-election in October. He said that by struggling with cancer recently, "I've become more Christian."
The president, who has been traveling to and from Cuba for treatment, said the radiation therapy sessions "have an impact on my physical strength, but I'm doing well."
"The treatment is going well, and here I am on my feet," he told the crowd. He waved a flag at the start of his speech to cheers.
Chavez said he was still unsure whether he would attend this weekend's Summit of the Americas in Colombia, and planned to decide in the coming hours whether to go in consultation with his doctors.
"In reality, I'm not going to decide, but rather my medical team," he said.
He asked the crowd their opinion: "What do you think? Raise your hands those who are in agreement with me not going to Cartagena?" Many in the crowd raised their hands and responded loudly, "No!" Others shouted: "Rest, rest!"
Doctors say common side effects of radiation therapy include fatigue and damage to areas exposed to the radiation beams, as well as nausea and diarrhea in cases such as Chavez's in which the pelvic area is treated.
"What is certain and for sure is that tomorrow I'm going to Havana for a new cycle of treatment," Chavez said. "Since we're going to enter the second and last phase of treatment, I'm thinking of asking for permission not to return in the middle of the week, but rather stay in Cuba ... in order not to be going and coming."
Chavez began radiation treatment in Cuba in late March. He underwent an operation in February that removed a second tumor from his pelvic region. Chavez also underwent chemotherapy in Cuba last year. He has kept secret some details of his illness, including the type of cancer and the precise location where the tumors have been removed.
During his speech, Chavez was flanked by one of his daughters and his aides. He criticized the exclusion of Cuba from the Summit of the Americas, and backed Argentina in its longstanding dispute with Britain over the Falkland Islands.
"All the countries of Latin America and the Caribbean are in favor of Cuba being included in this Summit of the Americas. There are only two governments against it," Chavez said. "If these two governments, the United States and Canada, refuse to discuss issues that are so strongly connected to Latin America and the Caribbean, such as the issue of Cuba ... or the issue of Las Malvinas (the Falkland Islands), why have more summits?"
"These summits should be done away with," he said. "The Summit of the Americas has no meaning."
The crowd outside the palace stretched down an adjacent avenue. Some who were too far away to see Chavez watched on large television screens set up on the street.
Before the speech, the president's supporters blew horns, beat drums and danced behind trucks with speakers blaring tunes with Chavez-themed lyrics such as: "Onward, comandante! The homeland is with you!"
Isabel Martinez, a member of the pro-government militia created by Chavez in recent years, said of his illness: "It has upset us, but that's going to pass."
"I know God is going to save him because God is with him," Martinez said.
The president created the Bolivarian Militia, which like his political movement is named after 19th century independence leader Simon Bolivar, saying it is intended to help defend the country against any future threats like the coup he survived a decade ago.
Dissident generals arrested Chavez in 2002 and claimed he had resigned. Later, an interim government tossed out the constitution and dissolved Congress and the Supreme Court.
Chavez triumphantly returned to the presidency within two days, when loyalists in the military backed him amid large protests by Chavez's supporters.
On Friday, Chavez, who is seeking another six-year term in the Oct. 7 election after 13 years in office, accused his rival in the presidential race, Gov. Henrique Capriles, of participating in the coup.
Capriles did not immediately respond to Chavez's comment. The opposition leader said previously that he didn't see any reason to celebrate the coup anniversary.
Chavez said the coup's failure showed that "united, the people will never be defeated."
"I ask you not only to maintain our unity but to strengthen it," Chavez told the crowd.
He added that it's fine for there to be debate and criticism within his socialist movement, "but unity and more unity, above all things."
Associated Press writers Jorge Rueda and Christopher Toothaker contributed to this report.