The prevalent custom among the Jewish nation is that Chanukah candles are lit with a blessing in the synagogue in order to publicize the miracle of Chanukah. This is indeed an ancient custom quoted by many great Rishonim. The Sefer Ha’Michtam (Pesachim 101a) writes that the reason for lighting Chanukah candles in the synagogue is because the publicity of the miracle is great in the synagogue where there are many people present as well as because there several people who may not have Chanukah candles to light at home. This custom is quoted as Halacha by Maran Ha’Shulchan Aruch (Chapter 671) and is the custom throughout the entire Jewish nation.
It is likewise customary to light Chanukah candles between Mincha and Arvit at the Western Wall (the “Kotel Ha’Ma’aravi”). Many times, the Torah luminaries of the generation are honored with lighting candles at the Western Wall in order to publicize the miracle even more. Indeed, Maran zt”l was invited several times to light the Chanukah candles at the Western Wall and although his time was very precious, he nevertheless felt it important to light the candles there in order to publicize the miracle of Chanukah.
Based on this, contemporary halachic authorities discuss the possibility of lighting Chanukah candles with a blessing at grand Chanukah parties held in halls and attended by many people where rabbis and Torah scholars are invited to speak words of Torah and strengthen the audience’s commitment to Mitzvah observance (as opposed to smaller, more family-oriented Chanukah parties where this question does not arise). The reason for doubt here is because some say that the custom to light Chanukah candles in a public forum is only in the synagogue which is somewhat similar to the Bet Hamikdash where the Chanukah miracle took place; however, one cannot light in places which are not a synagogue.
Indeed, Hagaon Harav Shlomo Zalman Auerbach zt”l rules that one should not recite a blessing on lighting candles at such Chanukah parties, for even lighting Chanukah candles in the synagogue is not mentioned in the Gemara and is merely a custom observed from the times of the Geonim. Nevertheless, one cannot recite a blessing on public lightings outside of the synagogue.
On the other hand, Maran Rabbeinu Ovadia Yosef zt”l rules that Chanukah candles may be lit along with a blessing in such places since the basis for the custom of lighting in the synagogue is because this causes a great publicity of the miracle and because there are those that will not be lighting at home (as quoted earlier from the Sefer Ha’Michtam). Thus, those who recite a blessing upon lighting Chanukah candles in such places certainly have on whom to rely. (Chazon Ovadia-Chanukah, page 47)
The great Rishon Le’Zion, Hagaon Harav Yitzchak Yosef Shlit”a adds (in his Yalkut Yosef-Chanukah, page 224) that in such situations, it is preferable that the audience prays Arvit immediately following lighting the Chanukah candles. He writes that Maran zt”l implemented this as well.