Police spokesman Thomas Neuendorf said the head of police in charge of stadium security ordered the flag to be taken down from a fence because he had regarded it as a politically fraught statement in a city with a large Palestinian community.
Fans took the flag down after being approached by stewards.
Cohen later said he inquired about the removal of the flag and was told by a steward that no political symbols were allowed.
"I then asked him if flags from other nations were also banned and he said, 'No, only Jewish flag.' I was shocked," he was quoted as saying.
Berlin's interior minister, Frank Henkel, said the police made "the wrong decision," the dpa report said.