Israel’s prime minister, Benjamin Netanyahu, has abruptly cancelled a meeting with the visiting German foreign minister, Sigmar Gabriel, in a high-profile diplomatic row over the German minister’s plan to meet two Israeli rights groups.

Netanyahu’s snub came after he issued an ultimatum to Gabriel to cancel meetings with military whistleblower group Breaking the Silence and human rights group B’Tselem.

Gabriel had responded by saying it would be “regrettable” if the meeting were cancelled and indicated his intention to go ahead with them. In comments to the German TV channel ZDF, he said it would be “inconceivable” for the German minister to cancel a meeting with the Israeli leader if the latter chose to meet figures critical of the German government.

“You never get the full picture of any state in the world if you just meet with figures in government ministries,” he told the channel.

A statement from the Israeli prime minister’s office said: “Netanyahu’s policy is not to meet foreign visitors who, on diplomatic trips to Israel, meet with groups that slander IDF [Israel Defence Forces] soldiers as war criminals.

“Diplomats are welcome to meet with representatives of civil society but Prime Minister Netanyahu will not meet with those who lend legitimacy to organisations that call for the criminalisation of Israeli soldiers. Our relations with Germany are very important and they will not be affected by this.”

Breaking the Silence is a group of former Israeli soldiers opposed to the country’s continued occupation of the West Bank. Israeli leaders oppose the group’s work, citing the anonymity of the claims and its efforts to reach foreign audiences.

The row is unusual in that Israel and Germany generally have excellent diplomatic relations. Gabriel was shunned last year in Tehran by Iran’s parliamentary speaker, Ali Larijani, after he said that Berlin could have friendly relations with Tehran if Iran recognised Israel.

It comes, however, amid a campaign by Netanyahu’s government to target groups it claims are critical of Israel.

The spat follows Netanyahu’s demand to Theresa May during an official visit to London that the British government cease funding Breaking the Silence, despite the fact it is not a recipient of direct British aid.

Justifying the Israeli move, an Israeli official said that Netanyahu’s position remained the same. “It’s a choice between Breaking the Silence and the prime minister,” said the official, speaking on condition of anonymity because he was discussing a diplomatic matter.

Such disputes have arisen in the past between visiting foreign officials and Israel’s government. In February, Israel reprimanded the Belgian ambassador after the country’s prime minister, Charles Michel, met B’Tselem and Breaking the Silence during a visit to Israel.

However, there was no public rebuke from the government when the British foreign secretary, Boris Johnson, met anti-settlement NGO Peace Now during a visit in March.

Netanyahu and his ministers have become increasingly preoccupied with Breaking the Silence. The group has been the principal target of a new funding law in the Knesset and there have been attempts to ban it from holding events in Israeli schools and public buildings.

Earlier this month, however, two former heads of Israel’s Shin Bet domestic intelligence agency publicly defended the group’s right to speak out.

The news came as Palestinian leaders said on Tuesday that Britain had rejected their request for an apology for the Balfour Declaration, a 1917 letter that helped pave the way for the creation of the state of Israel, and they would pursue international court action unless London backtracked.

The Palestinian president, Mahmoud Abbas, called for the apology in an address to the UN general assembly in September, but Britain plans to hold celebrations along with Israeli officials to mark the November centenary of the declaration.

“The answer came in a written letter to the (Palestinian) foreign ministry that the apology is refused,” Manuel Hassassian, the Palestinian ambassador to Britain, told Voice of Palestine Radio on Tuesday.