The vigil was held last night, on a day when doctors treating the 15-year-old girl said that she is "stable, comfortable and responding well".
The meeting held outside the Queen Elizabeth Hospital in Birmingham, included speeches from councillors, religious leaders and women's rights groups, The Sun reported.
Councillor Waseem Zaffar, who helped to organise the vigil, said: "Malala is an inspiration and we hope she can act as a positive role model to young girls in fighting gender inequality."
Members of the Muslim, Sikh, Hindu and Christian communities gathered outside the hospital and held the vigil praying for Malala's speedy recovery.
Malala is unable to talk as she is still breathing through a hole in her neck following a tracheostomy and has been communicating in writing. The tube in her throat may be removed within days, allowing her to talk.
On Friday, she asked: "What country am I in?", and the hospital has also confirmed she had been able to stand up.
Thousands of messages of support have been flooding in to the hospital from well-wishers, and women's groups have held a candlelit vigil in the city.
Eleven days ago, Taliban militants shot at Malala in the head and neck when she was returning from school. Two of her classmates were also injured in the attack.
The Taliban wanted to eliminate her as she had been leading a campaign for girls' education in the Swat valley near the Pakistan-Afghanistan border.
Malala was brought in an air ambulance to Birmingham on October 15 as specialists at the Queen Elizabeth Hospital are considered among the best in the world at treating the kind of injuries she has sustained.
London: Two hundred people, including Muslims, Sikhs, Hindus and Christians, held a vigil for brave Taliban gun victim Malala Yousufzai in the UK, outside the hospital where the Pakistani rights activist is being treated.
First Published: Sunday, October 21, 2012, 15:58