Sunday's route was the second-longest leg of the 21-day race.
Elia Viviani, who won the second stage of the race the next day, cycling from Haifa to Tel Aviv in less than four hours, said he was pleasantly surprised by the crowds.
Stage 3 will follow a 229-kilometer (143-mile) route from Beersheba in the Negev desert down to Israel's southern tip of Eilat along the Red Sea.
Viviani edged fellow Italian Sacha Modolo of EF Education First-Drapac p/b Cannondale at the finish line and pumped his fist in triumph in a near repeat of his sprint victory in Tel Aviv on Saturday.
"The pressure was off after yesterday's win", Viviani said.
"But I felt better later on".
"The team rode for me in the 30km before the intermediate sprint and delivered me perfectly", said Dennis, who beat Viviani in that race within the race.
The Team Sky rider ended up giving away 37 seconds - a sizeable chunk of time - to Sunweb's Tom Dumoulin after losing his front wheel at around 20mph while on a reconnaissance ride a few hours before the main event.
Britain's Chris Froome finished safely in the peloton along with his rivals for the overall race win on a day that was set up for a bunch sprint.More news: If Nuclear Deal is Nixed Iran Could Resume Its Nuclear Program - Envoy
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He was 19th, 38 seconds behind the leader.
Dennis secured three bonus seconds in an intermediate sprint earlier to overcome his two-second deficit from the opening time-trial in Jerusalem.
BMC's Dennis stayed out of danger on the stage and he will have the advantage when the race resumes after a rest day in Catania, Sicily on Tuesday. The Giro will end in Rome on May 27.
"This was a Giro d'Israel, a threeday tour around our special country".
They encountered Israeli flag-waving fans and spectators on horseback wearing the maglia rosa along the way, and even passed a group of goat herders. I think there has to be a point where we go: "Ok, that's too far". "Israelis are the greatest fans in the world".
"And how they're going to get you to travel after that period in that country outside of Europe as well is big factor".
The peloton seemed relaxed as it departed Be'er Sheva with a trio managing to escape pretty easily consisting of Guillaume Boivin (Israel Cycling Academy), Enrico Barbin (Bardiani-CSF) and Marco Frapporti (Androni-Sidermec).
Riders will now transfer to Italy tomorrow, following the controversial Big Start in Israel.
"For me, Israel has already won this race, as it afforded hundreds of millions of TV spectators to see our lovely country and feel the warmth of our people", he told The Associated Press.