Police were called to Alder Hey in Merseyside on Thursday night, a day after a court ruling set a date for the child's life-support to be switched off.
Footage posted online showed Alfie's parents, Tom Evans and Kate James, receiving huge applause as they joined the crowd of protesters who were chanting the youngster's name.
In an emotional video from his son's bedside, Mr Evans said he had a legal document that proves he has the right to remove the 23-month-old from hospital but he is being prevented from doing so.
"Alder Hey have phoned the police to stop me from taking my son out of the hospital," he said.
"This is my son. Look at my healthy, healthy young boy who is undiagnosed, who is certainly not dying."
Mr Evans encouraged people to come to the hospital to stand outside and "tell them to release our son" in a "quiet protest".
He added: "They have phoned the police over a child... look how innocent the boy is, look at him, he lies there eagerly waiting for his trip home.
"How can this come to this?"
Later outside the hospital, Mr Evans held up three passports as he told the crowd that doctors from Poland had accompanied him and the family had planned to take Alfie for treatment in Italy.
His parents have expressed hope that specialists at Rome's Bambino Gesu Paediatric Hospital will be able to pinpoint what is wrong with the toddler, who has a rare degenerative neurological condition.
The Pope has previously voiced support for Alfie's parents, who are both in their 20s and from Liverpool.
They have lost legal fights in the High Court, Court of Appeal, Supreme Court and European Court of Human Rights.
On Wednesday, High Court judge Mr Justice Hayden endorsed a plan put forward by Alder Hey doctors for withdrawing life support treatment.
The judge said detail of that plan could not be revealed because Alfie was entitled to privacy at the end of his life.
Merseyside Police confirmed they were at the protest on Thursday night and said access to the hospital had been disrupted.
Assistant Chief Constable Serena Kennedy said: "We were present at Alder Hey Hospital tonight while the hospital and family of Alfie Evans sought clarity from Mr Justice Hayden in relation to the treatment of Alfie.
"Although peaceful, the large protest that took place tonight did cause significant traffic disruption and inconvenience for other people trying to access the hospital."
She added: "We fully understand what a sensitive and emotional time this is for everyone involved and I would also therefore like to pass on our appreciation for the way in which Alfie's family were later able to speak to the crowd and offer assurance and calm."