Chancellor Angela Merkel rebuffed on Tuesday the attacks from Turkish President Recep Tayyip Erdogan over the German parliament's resolution condemning as genocide the massacre a century ago of Armenians by the Ottoman Empire.
Erdogan last week lashed out at German lawmakers of Turkish origin in Germany's lower house of parliament, the Bundestag, who voted for the resolution, calling on them to take a "blood test" to check their Turkish identity.
"The lawmakers in the Bundestag are freely elected without exception and the accusations and the statements that have been made from the Turkish side are incomprehensible," Merkel.
The chancellor was speaking at a press conference in Berlin after holding talks with Azerbaijan's President Ilham Aliyev.
In her comments, Merkel also called for fresh efforts to end Azerbaijan's long-running conflict with Armenia over the breakaway region of Nagorno-Karabakh, with Aliyev saying the current ceasefire in a breakaway region was "unstable."
"I think we agree that the current situation is unfavourable because it makes a resurgence of the conflict possible at any time," German Chancellor Angela Merkel told reporters.
Aliyev echoed that sentiment, saying the current ceasefire is unstable and "the status quo must be changed."
"We do not want war. We want peace," Aliyev said. "It's enough to look at the map to see who is the aggressor and who is the victim."
In early April, violence erupted in the contested region of Nagorno-Karabakh in the bloodiest fighting since a truce ended a six-year war between the former Soviet republics in 1994.
Nagorno-Karabakh has a mostly Christian Armenian population but comprises about 4,500 square kilometers within predominantly Muslim Azerbaijan.
At least 120 people are believed to have been killed during the recent surge in violence. Both sides have traded blame for the fighting.
Merkel said Germany should use its current chairmanship of the Organization for Security and Cooperation in Europe (OSCE) to help mediate the conflict, with regional power Russia playing a crucial role in the peace process.
Tuesday was the second day of Aliyev's trip to Berlin to boost economic and diplomatic ties. He met Munich Security Conference head Wolfgang Ischinger, officials at aircraft maker Airbus and members of the German-Azerbaijani Business Forum.
Human Rights Watch called on the German government to use the opportunity to urge Aliyev to release political prisoners.
"German officials should encourage President Aliyev to end the country's human rights crackdown and stop muzzling dissenters," said Hugh Williamson, Europe and Central Asia director at HRW.
Last month, a prominent reporter who had investigated the finances of Azerbaijan's first family was released on probation after her detention came under fire from activists and rights groups.
Observers assessed the release as a gesture of goodwill towards the West before the oil-rich, former Soviet state hosts its first Formula 1 race in Baku on June 19.