Israeli director Udi Aloni, who won the top audience at Berlin Film Festival on Saturday, has labelled the Israeli government "fascist" and urged Germany to cease its military support of the Jewish state.

At a Q&A session about his award-winning film Junction 48, hours before being presented with the Panorama Audience Award for best fiction film, Mr Aloni said Germany supported the “fascist regime of Israel”, according to a report by Channel 10 News.

The 56-year-old called Israel a "democracy of white people" and criticised German chancellor Angela Merkel’s support for Israel, saying: "Merkel does not mention the occupation and sells submarines to Netanyahu to continue such things."

But Mr Aloni later clarified to Channel 10 that his comments “were directed against the Israeli government and not against the country, which I love".

"In contrast to the prime minister who spreads hatred, my movie spreads love and co-existence," he said.

Mr Aloni expressed support and admiration for Tamer Nafar, the Palestinian rapper on whose life his film is based, and who has also previously claimed Israel is a terrorist country.

He said: "What makes Tamer such an amazing man is that he actually grew up in Lod, and from the beginning he sang about the fact that Israel is the real terrorist.”

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According to the report, Junction 48 received financial support from Israel’s culture ministry. Miri Regev, the hard-right Israeli minister of culture, said in response that Israel should not fund films that slander it.

Ms Regev said the statements were “clear proof that artists who subvert the state, defame it and hurt its legitimacy should not be funded by the taxpayer".

"A sane country should not assist slanderers and denouncers who malign it, immediately after drinking from its coffers," she said.