During a speech on Tuesday, the Israeli leader suggested Hitler was not planning to exterminate the Jews until he met Grand Mufti of Jerusalem Haj Amin al-Husseini, a Palestinian nationalist, in 1941.
"Hitler didn't want to exterminate the Jews at the time. He wanted to expel the Jews," Netanyahu told the World Zionist Congress.
"And Haj Amin al-Husseini went to Hitler and said: 'If you expel them, they'll all come here.' 'So what should I do with them?' he asked. He said: 'Burn them.'"
Online mockery also ensued, including one photo mock-up saying it was also the mufti "who really broke up The Beatles".
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On top of that, the controversy erupted just before Netanyahu left for a visit to Germany to meet Chancellor Angela Merkel and US Secretary of State John Kerry.
Netanyahu yesterday said accusations that his comments exonerated Hitler were "absurd" but stood by his claim that the Muslim leader who sympathised with the Nazis had an influence.
"I had no intention of exonerating Hitler from his diabolical responsibility for the extermination of European Jews," he said shortly before flew to Germany.
"(But) it is equally absurd to ignore the role played by the mufti... Who encouraged Hitler, Ribbentrop, Himmler and others to exterminate European Jewry."
The current German government was not spared the controversy, nor was Israeli President Reuven Rivlin as he visited the Czech Republic.
Speaking in Berlin, Netanyahu said "responsibility of Hitler and the Nazis for the extermination of six million Jews is clear to fair minded people".
At the same time, he insisted that the Grand Mufti's role should not be forgotten.
Merkel stressed her country's inherent "responsibility for the Holocaust".
"We don't see any reason to change our view of history," she said at a joint news conference with Netanyahu.
Rivlin, whose position as president is mainly ceremonial, criticised the mufti, but said that "in any case, it is Hitler who caused an endless suffering to our nation.