The dispute with Grass has drawn new attention to strains in Germany's complicated relationship with the Zionist regime - and also focused light on Israel's own secretive nuclear program.
In a poem called What Must Be Said published last Wednesday, Grass, 84, criticized what he described as Western hypocrisy over Israel's nuclear program and labeled the country a threat to "already fragile world peace" over its belligerent stance on Iran.
The poem has touched a raw nerve and caused fear in Israel.
"Interior Minister Eli Yishai declared Gunter Grass persona non grata in Israel," a statement from Yishai's office said.
"Gunter's poem is an attempt to fan the flames of hate against the state of Israel and the Israeli people," it quoted Yishai as saying.
In his poem "What must be said," the 84-year-old longtime leftist activist wrote of his concern that Israel "could wipe out the Iranian people" with a "first strike" due to the threat it sees in Tehran's civilian nuclear program.
"Why do I only say now, aged and with my last ink: the atomic power Israel is endangering the already fragile world peace?" reads the poem, which was published on Wednesday in the daily Sueddeutsche Zeitung.
Israel, the sole if undeclared nuclear power in the Middle East, has recently intensified war rhetoric against Iran.
Iran has, in return, warned that it would target Israel and its worldwide interests in case it comes under attack by the Tel Aviv.