Earlier, Republicans had complained about the distraction from the group as they held up signs saying "Condi Kills Kids" during the hearing on the State Department budget.
But the chairman of the House of Representatives committee, a New York Democrat, declined to eject the protesters.
"We're here in the United States of America. And as long as they don't disrupt this proceeding and as long as they're silent, they will be welcome," said Rep. Nita Lowey, who runs the subcommittee overseeing State Department appropriations.
"But they may not stand and they may not disrupt the proceedings."
The demonstrators, between 15 and 20 members of the Code Pink organization often seen at congressional hearings on Iraq, included one woman who was arrested last autumn for waving blood-colored hands in Rice's face.
The protesters wore pink T-shirts splattered with red, as well as pink scarves and pink artificial flowers braided into their hair. There were occasional outbursts from the group.
"Thank God," one protester said when Rice, an architect of President George W. Bush's Iraq policy, said it was her last appearance to testify on the budget.
Rice ignored the protesters. Several plainclothes police officers and uniformed Capitol Hill police watched them warily.
"I am embarrassed for the entire committee," said Rep. Jerry Lewis, a California Republican.
"I hope we never do this to the likes of you again," he told Rice.
© 2008 Reuters