Chancellor Angela Merkel has faced down growing criticism of Israel among her cabinet members and the wider German population and has ruled out sending troops to Lebanon - for the time being.
The conflict has tied Berlin's grand coalition government in knots. Dr Merkel continues to defend Israel's actions despite growing criticism at home, particularly from her Social Democrat coalition partners.
Hanging over Berlin's official position towards the conflict, and the debate about whether to deploy German peacekeeping troops to the region, is the shadow of the Holocaust.
"As Germans, we should approach this region with extreme caution, [ but] we want to live up to our international responsibilities," Dr Merkel was quoted as saying in the Bild am Sonntag newspaper yesterday.
"Hizbullah denies Israel's right to exist. It is a historical obligation of German politics to consistently advocate Israel's right to exist."
Dr Merkel can count on the support of her foreign minister, Frank-Walter Steinmeier, of the Social Democrats (SPD), but not on his party.
Development minister HeideMarie Wieczorek-Zeul - dubbed "Red Heidi" for her left-wing politics and dyed hair - has called Israel's actions "completely unacceptable".
Even the normally Israel-friendly SPD right wing has criticised "the disproportionate use of military means at the cost of the Lebanese civilian population".
Observers suggest that growing SPD criticism is motivated not just by anger towards Israel but also by political pragmatism: it was Chancellor Schröder's opposition to the Iraq war that helped the SPD portray itself as a "peace party" and secure re-election in 2002.
During a telephone conference, the majority of the SPD front bench backed "Red Heidi's" criticism of Israel and her statement calling for an immediate ceasefire.
But Mr Steinmeier snapped back: "What is the point of such a declaration when the main players are simply not prepared for a ceasefire?"
SPD leaders are worried about the growing gap opening up between the foreign minister and their front bench and are working behind the scenes to find a compromise.
"This could become the divorce grounds for the grand coalition," Michael Müller, an SPD left-winger, told Der Spiegel magazine.
Some 70 per cent of Germans see Israel as the aggressor in the current conflict and 56 per cent of those surveyed by Der Spiegel reject Dr Merkel's historical justification for keeping German troops out of the Middle East.