Expressing "shock" about the reports of demonstrators killed while protesting last week's military coup in Cairo, the foreign ministry in Berlin said that all sides must now refrain from bloodshed.
"There is the grave concern that there could be a further escalation of violence in Egypt," it said in a statement.
"We call on all forces to act with moderation and to renounce violence in all forms. We urge a quick investigation of today's events by an independent authority."
The Muslim Brotherhood, which has led demonstrations against the overthrow of Islamist president Mohamed Morsi last Wednesday, said its supporters were "massacred" when police and troops fired on them during dawn prayers outside an elite army headquarters in Cairo.
The military blamed "terrorists" while witnesses, including Brotherhood supporters at the scene, said armed forces fired only warning shots and tear gas, and that "thugs" in civilian clothes had carried out the deadly shooting.
A senior medical official then said that at least 42 people were killed and 322 wounded.
Germany, Europe's top economy, has committed around €30 million to a "transformation partnership" in Egypt with the aim of developing democratic institutions.
In a sharp statement last week, German Foreign Minister Guido Westerwelle called the military intervention "a major setback for democracy in Egypt" and warned that any crackdown against Morsi supporters could lead to consequences for German support.