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Berlin has also granted an Israeli request to use two leased drones in its campaign against Hamas, as Germany vows to “stand up” for Israel’s security during the conflict.
Chancellor Olaf Scholz told parliament that anyone who supports Hamas, uses its symbols or burns Israeli flags “is liable to prosecution” and said authorities would “bring anyone who does such things to justice”.
Mr Scholz - who was due to meet the Emir of Qatar on Thursday in a diplomatic flurry also involving talks with Turkey and Egypt - condemned what he called “shameful pictures” of pro-Hamas protests in Germany, some of which involved a pro-Palestinian group called Samidoun.
The interior ministry will issue a decree banning Hamas’s activities in Germany, he said, a step previously taken against Hezbollah in 2020 because it was not possible to prohibit the foreign entity itself.
In addition, an organisation “such as Samidoun, whose members celebrate the most brutal acts of terror in broad daylight, will be banned in Germany,” Mr Scholz said to applause from MPs.
Samidoun, which describes itself as a “network of activists” campaigning for the rights of Palestinian prisoners, has used social media to call for protests in Germany “supporting the resistance in Gaza”.
The group, which grew out of a prison hunger strike in 2011, described Saturday’s attacks on Israel as a “resistance rising throughout occupied Palestine, smashing the siege on Gaza”.
It endorsed a statement by another group, the Alternative Palestinian Revolutionary Path Movement, which called on the diaspora and allies abroad to “express their support for the heroic Palestinian resistance”.
Samidoun, which has held talks with members of the European Parliament, has called for the "defeat and overthrow" of the peace process begun by 1993's Oslo Accords.
Israel's government claimed in a 2019 report that Samidoun has a "wide network of ties" with the Popular Front for the Liberation of Palestine, which the US and EU consider a terrorist group.
Samidoun’s German arm said some protesters had been arrested amid fresh unrest overnight, with Berlin police saying pro-Palestinian demonstrators had gathered despite a ban.
German law allows organisations to be banned if they have criminal aims or defy the constitutional order or the “concept of international understanding”. Mr Scholz said protests celebrating Hamas’s attacks “contradict all the values we are committed to as a country”.
Security has been tightened around Jewish and Israeli institutions in a move “unfortunately necessary” because of anti-Semitic hatred being spread online, he said.
A report by Germany’s domestic intelligence agency in June said Hamas itself was believed to have about 450 supporters in Germany, whose main goal was to gather donations and influence political debate.
Israel-Gaza war latest - in pictures
Opposition leader Friedrich Merz, who said the pro-Hamas protests were an embarrassment for Germany, called for a ban on any group that supports Hamas or Islamist militants.
“Anyone who gathers money for terrorists or openly sympathises with them cannot plead freedom of expression,” he said as he offered to work with the government to tackle anti-Semitism.
Mindful of its guilt over the Holocaust, Germany has long regarded Israel’s security as a cornerstone of its foreign policy. Berlin’s Brandenburg Gate was lit up in the colours of the Israeli flag after the Hamas attacks.
Speaking at a Nato defence ministers’ meeting in Brussels, German Defence Minister Boris Pistorius said Israel had requested drones and naval ammunition as it organises its campaign against Hamas.
An Israeli request has been granted to use two armed Heron drones that are already in the country but currently on lease to the German military for training, Mr Pistorius said.
He said an Israeli request for warship ammunition was being considered. Germany recently agreed to buy the Arrow 3 missile defence system from Israel.
Germany is also offering manpower to help with diplomatic and medical tasks. Several German citizens were taken hostage during the surprise attack from Gaza.
Mr Scholz said Germany could not allow recent “positive developments” in the region such as the Abraham Accords between Israel, the UAE and Bahrain to be destroyed by terrorism.
“Our own history, our responsibility arising from the Holocaust, makes it an everlasting responsibility for us to stand up for the existence and security of the state of Israel,” he said.
Germany is suspending development aid for Palestinian territories while it reconsiders its policy, said Mr Scholz, who said any future assistance would be judged by whether it contributes to peace in the region.
He said that while there was no proof of Iran being directly involved in the latest escalation, it was “clear to us all that without Iranian support, Hamas would never have been able to launch this unprecedented attack”.