The top UN court has ruled against Nicaragua’s request for an emergency order to stop Germany sending aid to Israel.
Nicaragua is a long-time ally of the Palestinians and wanted the court to tell Germany to halt military exports and other aid.
It claims their help to Israel is enabling genocide in Gaza and breaking humanitarian laws – something Germany denies.
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Tuesday’s ruling by the International Court of Justice (ICJ) is about preliminary orders and the case could take years to resolve.
However, the court did say it remained “deeply concerned about the catastrophic living conditions of the Palestinians in Gaza” and denied a request by Germany to throw out the case completely.
Israel denies claims of genocide and says it is acting in self defence to destroy Hamas after its October attack killed about 1,200 people and took several hundred hostages.
The head of Germany’s legal team, Tania von Uslar-Gleichen, said Nicaragua’s claims “have no basis in fact or law”.
The small Central American country also wants Germany to reinstate direct funding to the UN aid agency in Gaza.
Germany has been a strong supporter of Israel for decades but its tone has shifted gradually as the humanitarian situation has worsened.
South Africa also accused Israel of genocide at the same court late last year.
It led the ICJ to order Israel to do all it can to prevent death, destruction and acts of genocide.
In March, it issued new provisional measures ordering it to improve Gaza’s humanitarian situation.
The UN and other agencies say it is on the brink of famine and there are deep concerns about the Israeli military’s planned ground assault on Rafah, where more than a million people have fled.
More than 34,000 people have died in Gaza since Israel began its offensive, according to the Hamas-run health agency.
Israeli legal adviser Tal Becker told the court earlier this year that the country was fighting a “war it did not start and did not want”.