Amid tensions in Berlin over pro-Gaza protests and a rise in anti-Semitism, the 46-year-old doused himself in a flammable liquid and then set himself alight with a cigarette lighter at 11.45pm on Monday.
Police said the man, who is of Arab descent, only suffered minor injuries outside the Israeli embassy in south-west Berlin.
A police spokesman told The Local his feet and legs were burnt and he was now in hospital.
His trousers caught fire immediately, the Berliner Morgenpost reported, but the flames were quickly put out by security staff outside the embassy.
"We can't rule out he had a political motive, but it is too early to say at the moment," the spokeswoman said.
Protests against Israel's invasion of Gaza are in the spotlight in Germany at the moment following anti-Semitic chants at pro-Palestine rallies and the riots in neighbouring France.
On Monday, in an article in the Berliner Zeitung, Israel’s ambassador to Germany Yakov Hadas-Handelsman compared chants at pro-Palestine demonstrations to the behaviour of the Nazis.
He wrote: "Where are we? Where are we hearing these slogans? In Nazi Germany in 1934?"
He said Islamists, neo-Nazis and the far-left were all targeting Jewish people in the country.
“Each group has their own agenda but they have a common denominator - hatred of the Jewish people and of the state of Israel," he wrote.
On Tuesday, German Foreign Minister Frank-Walter Steinmeier, France's Laurent Fabius and Italy's Federica Mogherini issued a joint statement in Brussels against anti-Semitism.
"Anti-Semitic rhetoric and hostility against Jews, attacks on people of Jewish belief and synagogues have no place in our societies," they said.
"We strongly condemn the hateful Anti-Semitic comments, demonstrations and assaults over the past days."
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