Foreign Minister Guido Westerwelle, who arrived in Jerusalem on Tuesday, carried "no weight" in the situation, said Abdallah Frangi, a personal advisor of Palestinian president Mahmoud Abbas.
Israeli fighter jets destroyed the Gaza headquarters of the National Islamic Bank on Tuesday, and the death toll there rose to more than 100, while rockets hitting Israel have killed three.
German engineering giant Siemens confirmed that around half of its 70 German employees had left Israel to go home.
A spokesman told Tuesday's Berliner Morgenpost newspaper the firm did not think the situation was dangerous enough to send them home, but had given them the option to leave.
About half had left their work servicing a gas power station at the small town of Rezer between Jerusalem and Tel Aviv, which is within the range of rockets being fired from Gaza.
Diplomats across the globe have called for a cease-fire from both sides, terrified of the regional consequences of a potential Israeli ground invasion. French and Egyptian politicians have been heavily involved in trying to broker a cease-fire.
But Westerwelle was wasting his time trying to get involved, Frangi told the Rheinische Post newspaper.
He accused the German government and Chancellor Angela Merkel of ignoring the suffering of the people in Gaza and of following a one-sided policy.
"Ms. Merkel sees the right of Israel to act, but obviously she doesn't see the pictures from the Gaza Strip," he said.
Westerwelle said on his arrival in Jerusalem: "We stand by the side of our friends in Israel. Israel has the right to defend itself and its population."
Ahead of meetings with Prime Minister Benjamin Netanyahu and Abbas, Westerwelle called for further efforts to be made to quickly reach a cease-fire. He also said Egypt must use its influence in the region to try to stop the violence.