The row erupted at the beginning of the festival when jury president Wim Wenders answered a question about the German government's support for Israel by saying: "We cannot really enter the field of politics."
At the same press conference he had said that films had the power to "change the world" but in a different way from politics.
But his comments in response to the question on Israel prompted a storm of outrage.
Award-winning Indian novelist Arundhati Roy, who had been due to present a restored version of a 1989 film she wrote, pulled out of the event, branding Wender's words "unconscionable" and "jaw-dropping".
On Tuesday, an open letter signed by dozens of film industry figures, including actors Javier Bardem and Tilda Swinton and director Adam McKay, condemned the Berlin festival's "silence on the genocide of Palestinians" and accused it of being involved in "censoring" artists who oppose Israel's actions.
Films overshadowed
Director Tricia Tuttle, in her second year at the helm of the Berlinale, has firmly rejected the accusations, describing some of the claims in the letter as "misinformation" and "inaccurate".
Speaking on Saturday at the awards ceremony for prizes from the festival's Independent Juries, Tuttle described the past 10 days as "stormy seas".
Mexican director Fernando Eimbcke, whose film "Moscas" ("Flies") is in official competition, used the occasion to say: "More than 17,000 kids have been killed in Gaza in the last two years."
"I should raise my voice and I ask all the governments and organisations to raise their voices too," he said.
Later on Saturday, prizes will be awarded by the main International Jury, including the coveted Golden Bear for best film.
The ceremony will get underway at 1700 GMT.
Among the standout entries in the official competition was "We Are All Strangers" by Anthony Chen.
Set in Chen's native Singapore, the film is a moving family drama which playfully satirises the yawning social disparities to be found in the city-state's glittering skyscrapers.
German actress Sandra Hueller, who gained international acclaim for her roles in "The Zone of Interest" and "Anatomy of a Fall", received audience plaudits for her turn as the title character in "Rose" by Austrian director Markus Schleinzer.
The black-and-white drama tells the story of a woman passing herself off as a man in rural 17th-century Germany to escape the constraints of patriarchy.
Repression in Iran
Juliette Binoche, playing a woman caring for her mother with dementia, also moved cinema-goers in "Queen at Sea" by American director Lance Hammer, who had not made a feature film since 2008.
The film sensitively portrays the devastation Alzheimer's disease inflicts on a patient's loved ones.
The first major event of the film calendar also provided a platform for Iranian filmmakers to address the deadly crackdown on anti-government protests in their home country.
Director Mahnaz Mohammadi, who has spent time in Tehran's notorious Evin prison, presented "Roya", a searing portrayal of conditions in the jail and the traces they leave on prisoners' psyches.
Dissident director Jafar Panahi, who won the Cannes Palme d'Or for "It Was Just An Accident", also spoke at the Berlinale to denounce the Iranian government's repression of protestors, which international organisations say has left thousands, or tens of thousands, dead.
"An unbelievable crime has happened. Mass murder has happened. People are not even allowed to mourn their loved ones," Panahi told a talk organised as part of the festival.
"People do not want violence. They avoid violence. It is the regime that forces violence upon them," Panahi said.
In December he was sentenced to one year in prison and a travel ban in Iran but has expressed his intention to return nevertheless.
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