The packed audience at The Hague town hall rose as one as Assaf took to the stage, with refugees and diplomats alike dancing in the aisles and waving the flag of Palestine and many other Arab nations.
"He is an example for Arab youth, he managed to make his dream reality despite the difficulties," said Ahmed, a 17-year-old Palestinian living in The Netherlands.
"What's amazing is that a Palestinian can be talked about in a positive way. That doesn't happen often," he said.
Palestinians from The Netherlands but also Germany and Belgium travelled to the concert, which was also attended by most Arab ambassadors posted to The Hague.
"I'm really happy for him. It's true that people are sometimes afraid to talk about Palestine in a positive way," said Nour, 20, a Dutch-Moroccan who came to the concert with his sister Sarah, 19.
"Thank you The Netherlands for welcoming the Arab Idol," said Palestinian ambassador Nabil Abuznaid as he introduced Assaf, hailing his "message of peace".
Israel in August took the exceptional step of allowing Assaf to move from the Gaza Strip to the Israeli-occupied West Bank as a "humanitarian gesture".
Israel has maintained a land, sea and air blockade on Gaza since 2006 which was tightened further when the Islamist movement Hamas seized control there the following year.
'I'd like to reach out to the world'
"I am happy, this is an opportunity to be in front of a non-Arab audience, and that's a good thing," Assaf told AFP in an interview before the concert. "I'd like to reach out to the world."
"Maybe there are different audiences, or the techniques are different in the Middle East and in Europe and America, but what I know is music is something that when people first hear, they love."
Assaf arrived in The Netherlands from his new home in Dubai and had dinner with Arab ambassadors on Saturday evening, a spokesman for the Palestinian delegation in The Netherlands, Roel Raterink, told AFP.
Assaf said he was now living in Dubai "because of the conditions in my country".
"Because of the siege, it is easier for me to go to Dubai, it makes travel easier because I have concerts in some Arab countries and in Europe, and in America over the next months."
No Israeli diplomats will be attending. Israeli President Shimon Peres is on a visit to Amsterdam at the same time, the Israeli embassy said.
"Well, whether they come or not, that's their problem," said a smiling Ahmed.
"It's an amazing night, with or without them."
One-time wedding crooner Assaf was also to meet members of The Netherlands' Palestinian community before heading to Italy for another European concert, Raterink said.
Born to Palestinian parents in Misrata, Libya, Assaf grew up in the teeming Khan Yunis refugee camp in southern Gaza before winning the 2013 edition of Arab Idol in Beirut in June.
His victory sparked scenes of jubilation across the Palestinian territories.
The week after he won, Assaf performed in front of some 40,000 fans in the West Bank city of Ramallah.
The contest in Beirut transfixed viewers with Assaf's story which saw him sneaking out of Gaza, nearly missing his initial audition in Cairo, and then only making it through after a fellow Gazan pulled out.
Palestinians remain divided between the Islamist Hamas movement which rules the Gaza Strip and its Fatah rival which dominates the West Bank-based Palestinian Authority.
On his return to Gaza in June, Assaf called for an end to the "division" with the West Bank, and urged unity between Palestinians.
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