Speaking at a Berlin press conference with his Israeli counterpart Gideon Saar, he said that "negotiations between Israel and the Palestinians must be concluded" first, before the recognition of a Palestinian state.
Spain, Ireland and Norway last year recognised a Palestinian state, and French President Emmanuel Macron has recently stepped up his support for the idea, leading Israel to accuse him of a "crusade against the Jewish state".
Last week Israeli Defence Minister Israel Katz vowed to build a "Jewish Israeli state" in the occupied West Bank, a day after the government announced the creation of 22 new settlements in the Palestinian territory.
Wadephul said Thursday that he was "concerned about the extremely tense situation in the West Bank" and that the German government "rejects" the creation of new Israel settlements there as illegal under international law.
He also said, on the Gaza war, that "too little" aid was reaching civilians in the war-torn territory, where the United Nations warned last month that the entire population was at risk of famine.
Wadephul said he had renewed his "urgent request to allow humanitarian aid to Gaza" without restrictions as required by international law.
He also stressed that Israel has a right to defend itself against Hamas and other enemies, and that "therefore Germany will of course continue to support Israel with arms deliveries, that was never in doubt".
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During his remarks on the topic at the Bundestag in Berlin on Wednesday, Wadephul was interrupted by an activist who yelled "Free Palestine" and "blood on your hands", in protest of Germany's continued support of Israel.
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