Germany has said Israel's security is at the "core" of its foreign policy, as it defends a genocide case brought against it at the UN's highest court.
Nicaragua had accused it of breaching the UN genocide convention by sending military hardware to Israel and ceasing funding of the UN's aid agency.
Berlin rejected the claims at the International Court of Justice (ICJ) in The Hague on Tuesday.
In 2023 some 30% of Israel's military equipment purchases came from Germany.
The purchases totalled €300m ($326m; £257m).
The allegations build on a separate case taken by South Africa in January, where judges in the Hague ordered Israel to take "every possible measure" to avoid genocidal acts.
Israel rejects accusations that it is engaging in genocidal acts in its campaign in Gaza, and has insisted it has the right to defend itself.
More than 33,000 have been killed in Israel's offensive in Gaza, the Hamas-run health ministry there says, the majority of them civilians. Gaza is on the brink of famine, with Oxfam reporting that 300,000 people trapped in the north have lived since January on an average of 245 calories a day.
Nicaragua says Germany's arms sales to Israel, which totalled $326.5m last year - a tenfold increase on 2022 - make it complicit in Israel's alleged war crimes. The Central American country had brought the case to the Hague to ask judges to issue emergency measures to stop Berlin from providing Israel with weapons and other assistance.
Firmly rejecting the accusations, Germany's representative argued on Tuesday that Nicaragua's case - which she said was rushed and based on the "flimsiest of evidence" - was aimed more toward Israel.
"Nicaragua insists [on] initiating proceedings against Germany before this court, [and] has taken a one-sided view of the conflict. It fails to properly appreciate both the facts and the law in this situation", lawyer Tania von Uslar-Gleichen said on Tuesday.
"Our history is the reason why Israel's security has been at the core of Germany's foreign policy," she told the court.
"Where Germany has provided support to Israel, including in a form of export of arms and other military equipment, the quality and purposes of these supplies have been grossly distorted by Nicaragua."
In her opening statement, she argued that Germany was doing its "utmost to live up to its responsibility" to both Palestinians and Israelis.
Germany had a duty to remind Israel of the rules of international humanitarian law, even as it exercised its "right to self defence", she added.
On the issue of ceasing its funding of the UN's aid agency, she argued that Germany was among the largest international donors to Gaza in 2024.
Another lawyer representing Germany, Christian Tams, said that Germany had resumed funding operations of the UN's Relief and Works Agency for Palestine Refugees (UNRWA), a fact "ignored by Nicaragua".
Germany was one of 15 Western nations which suspended funding for UNRWA over allegations that some of the agency's staff were involved in the 7 October attacks on Israel.
According to papers filed with the ICJ, Nicaragua wanted the UN's top court to resume funding of the aid agency, one of the few international bodies still operating in Gaza.
On Monday, the opening day of the trial, Nicaragua's lawyers had said Berlin was "pathetic" for supplying Israel with arms while at the same time giving humanitarian aid to Palestinians.
Alain Pellet, a lawyer for Nicaragua, said it was "urgent that Germany suspend continued sales.
"Germany was and is fully conscious of the risk that the arms it has furnished and continues to furnish to Israel" could be used to commit genocide, he told judges.
Nicaragua's case has raised broader questions about the accountability of countries supplying weapons to Israel since the Gaza conflict began.
Michael Becker, a law professor at Trinity College Dublin, told the OceanNewsUK on Monday that there was uncertainty about states' obligations to prevent genocide or ensure respect for humanitarian law. The case against Germany, he said, could potentially help clarify the issue.
"Under international law, states can also be held responsible for aiding or assisting in another state's violations of international law," he observed.
"But international law on aid or assistance in the commission of an unlawful act is full of uncertainty. For example, it may not be clear whether Nicaragua needs to demonstrate both that Germany knew its assistance to Israel risked contributing to violations of international law but that that Germany intended that result.
Critics of Nicaragua's case have highlighted the country's chequered human rights record. The government of President Daniel Ortega has jailed opponents and banned protests. In March, the UK's mission to the UN accused the government of a "relentless" crackdown on human rights.
