Two protesters died immediately, their blood leaving a red trail on Berlin's fresh snow. The third died in hospital shortly after arrival. Several of the injured were reported to be in a serious condition.
The Israelis - blamed by the Kurds for helping the Turks to capture their leader - said they acted in self-defence, while protecting their heavily fortified building in the suburb of Grunewald from demonstrators armed with sticks and stones.
The latest bloodshed threatens to provoke further waves of protests across Europe where many Kurds live in exile.
Turkish television yesterday showed the first footage of the rebel leader on the flight to Turkey. Handcuffed and tied up in an aircraft seat, he grimaced as masked Turkish special forces captors questioned him.
"Abdullah Ocalan, welcome home," said one. "You are our guest from now on." "Thank you," said Mr Ocalan. "I really love Turkey and the Turkish people." Pressing home their advantage against the PKK, the Turkish military sent tanks and 2,000 troops into neighbouring Iraq to destroy Kurdish bases.
In Berlin, the protest by about 200 Kurds was initially peaceful. But shortly before 2pm, a group of 30 smashed through the cordon of police, and appeared poised to storm the building. The Kurds also briefly took a woman employee hostage. In the scuffles, the Israelis say one demonstrator tried to snatch a gun from a guard whose colleagues then opened fire, allegedly without warning.
Israel's Prime Minister, Benjamin Netanyahu, said last night: "Our security guards have clear instructions to protect their own lives, to protect the lives of Israelis, and to prevent, if necessary by force, the taking of hostages." He denied Israel played any role in getting the PKK leader into Turkish hands.
In London, the Greek embassy remained in the hands of about 40 Kurdish protesters who announced a hunger strike and said they would set themselves on fire if the police attacked. Tension increased at one point as one man apparently doused himself in petrol before being restrained by the crowd and then dragged away by police. Elsewhere in Europe protests were dying down last night.
Violence flared in other parts of Germany, and rumours swept Berlin that Kurds were planning to stage a protest on the Ku'dam, the biggest shopping street. In Hamburg, about 30 PKK members occupied the offices of the governing Social Democrat Party, injuring a party worker they took hostage.
There are an estimated 600,000 Kurds living in Germany, and some 2 million Turks. Conflict between the two communities has in the past spilt over on to Germany's streets.