The group issued the statement as the German leader was wrapping up a three-day visit aimed at reiterating Berlin's support for the Jewish state 60 years after it was created in the wake of the Nazi slaughter of six million Jews.
Merkel's comments "reflect a moral degradation into which this chancellor has fallen by supporting without failure an entity that commits massacres against Palestinian children, women and the elderly," Hamas said.
The Islamists also said the chancellor "has closed her eyes to the holocaust that this entity has perpetrated in the Gaza Strip, focusing only on the Holocaust committed by the Nazis against Jews in her country, the extent of which is a subject of doubts and exaggerations." Hamas has pledged itself to Israel's destruction.
The comments referred to Israeli operations in the territory that began on February 27 in response to rocket fire and that killed more than 130 Palestinians, including several dozen children and other civilians, in the course of a little more than a week. Five Israelis were also killed.
When asked about Israeli settlements on Palestinian land during a press conference with Prime Minister Ehud Olmert on Monday, Merkel sidestepped the controversial issue, saying only the question was a complex one.
And when asked about almost daily rocket fire launched at southern Israel by Palestinian militants in Gaza, she said, "There are conditions that don't make talks any easier."
Merkel was to address Israel's parliament on Tuesday as she wrapped up a visit of solidarity 60 years after the Jewish state was founded in the wake of the Nazi Holocaust. The 53-year-old will become the first German head of government to address the Knesset, an honour normally reserved for heads of state.
The invitation to address the chamber was "a very important step in the development of German-Israeli relations", Merkel said after meeting her Israeli counterpart Shimon Peres early on Tuesday. But Merkel's plans to make her speech in German has riled some in Israel, where memories of the Nazis' murder of six million Jews during World War II run deep.
Four MPs plan to stay away from the chamber in protest, according to local media, while other lawmakers, including at least one Holocaust survivor, have criticized the plans as "populist."
German being spoken inside the Israeli parliament has set off angry protests before in the Jewish state. When Johannes Rau became the first German head of state to address the Knesset in 2000, he did so in German and several Israeli MPs stormed out in protest.
His successor Horst Koehler received a warmer reception five years later and included several sentences in Hebrew in his speech.