Some protestors were draped in Israeli flags, others wore Orthodox Jewish dress for the peaceful demonstration on Berlin's Bebelplatz, infamous as the site of book-burning ceremonies carried out by Adolf Hitler's Nazis.
One banner at the demonstration accused Germany of reverting to a "colonial power" while another read: "Foreskin? No thank you!"
Following the judgement from the court in Cologne saying circumcision was tantamount to grievous bodily harm, Jewish and Muslim groups joined forces for the protest in central Berlin as the foreign minister expressed his concern.
"I am very worried about this debate. It will not be understood in any way outside our country," Guido Westerwelle told Focus news magazine.
"It is completely incomprehensible that Jewish families in Germany might not be able to have their young boys circumcised," added the minister.
Diplomats admit the ruling has proved "disastrous" for Germany's international image, particularly in light of its Nazi past, following uproar from religious and political leaders in Israel as well as Muslim countries
I'm Jewish too... (Photo: Reuters)
The leader of Germany's Jewish community, Dieter Graumann, told the same publication it was "unbearable" that Jews were being portrayed as "child torturers" for carrying out the practice.
And he backed his predecessor as head of the Central Council of Jews in Germany, Charlotte Knobloch, who said last week that Jewish life in Germany was being questioned for the first time since 1945.
"I can well understand her feelings," said Graumann.
On Wednesday, the city of Berlin imposed new legal conditions on parents who have their boys circumcised.
Both parents must give written permission after being informed of the risks of the procedure, and provide proof of the "religious motivation and religious necessity of the circumcision" before the child is old enough to take the decision himself.
About four million Muslims and more than 200,000 Jews live in Germany.