A Mass was held at Notre Dame Cathedral in Rouen, close to Saint-Etienne-du-Rouvray, where Fr Jacques was killed.
Adel Kermiche and Abdel-Malik Petitjean, both 19, stormed the 85-year-old clergyman's church on Tuesday 26th July.
They took a number of people hostage before stabbing an elderly parishioner and slitting the throat of Fr Jacques.
The pair had sworn allegiance to so-called Islamic State in a video before the attack.
During the two-hour mass, Archbishop Dominique Lebrun told those gathered of how Fr Jacques responded to his attackers.
"Evil is a mystery. It reaches heights of horror that take us out of the human," he said.
"Isn't that what you wanted to say, Jacques, with your last words, when you fell to the ground? After you were struck by the knife, you tried to push away your assailants with your feet and said, 'Go away, Satan.' You repeated it, 'Go away, Satan.'"
With those words, Archbishop Lebrun said, "You expressed ... your faith in the goodness of humans and that the devil put his claws in."
A number of Muslims also attended the service after hundreds turned out at churches across France on Sunday.
The sister of Fr Jacques Hamel appealed for all faiths to work together for peace.
"Let's learn to live together, let's be workers for peace," Roselyne Hamel told an estimated 1,700 people gathered in Rouen cathedral.
Hundreds of people watched the ceremony on a big screen outside the cathedral, under constant rain.
"We're very touched," Archbishop Dominique Lebrun told broadcaster BFMTV.
"It's an important gesture of fraternity.
"They've told us, and I think they're sincere, that it's not Islam which killed Jacques Hamel."
Tuesday's ceremony was organised under tight security, and the burial was private.
