The former soldiers said inviting Mr Assad to watch the parade "dishonours the memory" of 58 French UN peace keepers who died in the 1983 blast at the Drakkar building in Beirut.
Jean-Luc Hemar, head of the Association of veterans from Camp Idron in central France, said he was "uneasy" about soldiers filing past the Syrian leader during the march down the Champs-Elysées.
"Drakkar will cast a shadow over the 14th of July," he said.
The issue is particularly sensitive as some of the soldiers graduated from a military academy named in honour of one of the victims of the Drakkar bombing.
Mr Assad is one of a dozen leaders coming to the July 14 parade following the Union for the Mediterranean summit, which marks the return to the diplomatic fold for the Syrian leader after years of isolation.
Mr Sarkozy's office defended its decision to invite Mr Assad, saying that the Beirut truck bombing was carried out by the Iranian-backed Hizbollah, not Syria.
"To blame Syria for Drakkar is a historical mistake," said the Elysée spokesman. "There's really no reason for such controversy."
He did concede that Syria probably had a hand in the 1981 assassination of France's ambassador to Lebanon.
Discomfort over Mr Assad's presence comes amid tensions in the French army over sweeping defence reforms and job cuts announced by Mr Sarkozy last month.
There is also reportedly widespread discontent within the army at Mr Sarkozy's reaction to a shooting last month in Carcassonne, when a soldier accidentally fired into a crowd, injuring 17.
Mr Sarkozy is said to have described the army as "amateurish".
The territorial army's chief resigned in the aftermath of a row over the shooting.
Gen Bruno Cuche, the army chief, was said to be appalled at Mr Sarkozy's "particularly disagreeable" reaction to the drama.
The President arrived on the scene without even greeting the army chief, then stabbed his finger at him, saying: "You are all irresponsible, not professionals!" according to Le Point magazine.
Gen Cuche, 60, who served in Kosovo as part of the United Nations force, handed in his resignation shortly afterwards in protest.
