Israel's Prime Minister Benjamin Netanyahu has been criticised for saying a Palestinian leader persuaded the Nazis to carry out the Holocaust.
Mr Netanyahu insisted Adolf Hitler had only wanted to expel Jews from Europe, but that Grand Mufti of Jerusalem Haj Amin al-Husseini told him: "Burn them."
However, the chief historian at Israel's memorial to the Holocaust said this account was factually incorrect.
Angela Merkel said Germany "abides by its responsibility for the Holocaust".
"We are very clear in our minds about the Nazis' responsibility for the break with civilisation that was the Shoah," the German chancellor said.
A senior Palestinian official meanwhile said it showed Mr Netanyahu hated Palestinians so much he was willing to absolve Hitler.
Speaking alongside Mrs Merkel in Berlin, Mr Netanyahu said "no one should deny that Hitler was responsible for the Holocaust".
But Mr Netanyahu insisted the Mufti of Jerusalem "told the Nazis to prevent Jews fleeing from Europe and supported the Final Solution".
Tensions between Israelis and Palestinians have been worsened since early October by a spate of stabbing and shooting attacks - several of them fatal - on Israelis by Palestinians, and one apparent revenge stabbing by an Israeli.
Israeli security forces have also clashed with rioting Palestinians, leading to deaths on the Palestinian side. The violence has also spread to the border with Gaza.
Husseini, who died in 1974, was a Palestinian nationalist leader who led violent campaigns against Jews and the British authorities in what was then British Mandate Palestine in the 1920s and 1930s.
He fled the territory in 1937, but continued his campaign to oppose British plans to partition it into a Jewish state and an Arab one, allying himself with the Nazis during World War Two.
Husseini met Hitler in Berlin in November 1941, when he tried to persuade the Nazi leader to declare his support for the creation of an Arab state, according to German press reports at the time.
But in a speech at the World Zionist Congress in Jerusalem on Tuesday, Mr Netanyahu gave a different account.
"Hitler didn't want to exterminate the Jews at the time - he wanted to expel the Jews," the Israeli prime minister said.
"And Haj Amin al-Husseini went to Hitler and said: 'If you expel them, they'll all come here.'
"'So what should I do with them?' he [Hitler] asked. He [Husseini] said: 'Burn them.'"
However, the chief historian of the Yad Vashem Holocaust memorial in Jerusalem, Professor Dina Porat, said Mr Netanyahu's statement was factually incorrect.
"You cannot say that it was the mufti who gave Hitler the idea to kill or burn Jews," she told the newspaper Yedioth Ahronoth. "It's not true. Their meeting occurred after a series of events that point to this."
Opposition leader Isaac Herzog said the prime minister's remarks played into the hands of Holocaust deniers.
"This is a dangerous historical distortion and I demand Netanyahu correct it immediately as it minimises the Holocaust, Nazism and... Hitler's part in our people's terrible disaster," he wrote on his Facebook page.
Palestine Liberation Organisation's Secretary General Saeb Erekat said in a statement: "It is a sad day in history when the leader of the Israeli government hates his neighbour so much that he is willing to absolve the most notorious war criminal in history, Adolf Hitler, of the murder of six million Jews."
Husseini was sought for war crimes but never appeared at Nuremberg.
How Israeli media reported the story
- The Jerusalem Post says the chief historian at Israel's memorial to the Holocaust has "responded harshly" to Mr Netanyahu's speech. Professor Dina Porat told the newspaper he should backtrack.
- Yedioth Ahronoth says Mr Netanyahu has been "slammed" for his remarks and quotes experts as saying Hitler did indeed meet the mufti - but only after the Final Solution began.
- The Times of Israel leads with Germany's insistence that it was responsible for the Holocaust and continues by saying Mr Netanyahu has been "roundly denounced".
- +972 Magazine, an online current affairs magazine, says ordinary Israelis and Palestinians are "not letting Mr Netanyahu get off that easy" after his comments and published a series of internet memes mocking the prime minister.