The five-minute clip shows the men use assault rifles to kill two bound and kneeling male hostages in the Syrian ancient city of Palmyra, which Isis fighters took in May.
In a rare German-language Isis message, they urge their "brothers and sisters" in Germany and Austria to join Isis in Syria and Iraq or commit attacks against "unbelievers" at home.
One of the men threatens Chancellor Angela Merkel, vowing to avenge the "blood of Muslims spilled in Afghanistan", where Germany sent troops as part of a NATO force, and their support for the coalition against Isis.
Flow of German jihadis slowing
Earlier on Wednesday, Hans-Georg Maaßen, the head of Germany's domestic intelligence agency, said that the flow of people travelling to Iraq and Syria to join Isis is slowing.
“This year the number of people leaving [for Iraq and Syria] has increased, but not at the same rate,” the head of the Office for the Protection of the Constitution [Bundesamt für Verfassungsschutz] told Reuters.
The number of young people leaving Germany in response to the call from the self-proclaimed caliphate ballooned in 2014.
Maaßen said that “currently we estimate around 720 people have travelled to Syria and to Iraq,” although he acknowledged that “we must assume that there are still more” who are unknown to the intelligence service.
“We assume that the numbers will continue to rise – probably not so dramatically as we saw last year,” he added.
Isis remains attractive to young people in Germany who are interested in joining a jihadist movement, Maaßen said.
But the security chief insisted that the German authorities were doing a lot to prevent people joining the fight.
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More than 100 people had been banned from leaving the country, he said.
“German officials aren't powerless or defenceless against Isis' propaganda,” Maaßen said. “But it's important to remember that Islamists in Germany under a travel ban continue to present a danger.”