"It is unacceptable," said Willi van Ooyen, a spokesman for a group that organizes the traditional peace marches held each year on Easter weekend in Germany since 1960.
"Threats and preparations for war poison the political climate," said Ooyen, referring to concerns that Israel might launch a strike against Iran's nuclear facilities to stop its civilian program.
The 84-year-old Grass last week published a poem titled "What must be said" in which he said he feared a nuclear-armed Israel "could wipe out the Iranian people" with a "first strike".
Israeli Prime Minister Benjamin Netanyahu expressed deep fury over the poem.
Grass, a Nobel literature prize winner, has said he found the personal accusations against him "hurtful", but he had no plans to back down.
German health minister Daniel Bahr also dismissed the Israeli decision to ban Grass "completely exaggerated", in an interview with daily Die Welt on Tuesday.
"I can hardly imagine that Mr. Grass has any interest in showing up in Israel," said Bahr, a member of the FDP liberal party, part of the ruling coalition, according to the newspaper.
Israel, the sole if undeclared nuclear power in the Middle East, has recently intensified war rhetoric against Iran.
Iran has warned that it would target Israel and its worldwide interests in case it comes under attack by the Tel Aviv.