The German government on Wednesday approved a draft law to crack down on the far right, three weeks after a deadly attack by an alleged neo-Nazi targeting a synagogue.
Chancellor Angela Merkel's cabinet signed off on a raft of measures that in particular target weapons sales and hate speech online.
The bill must still be approved by parliament.
"The threat from far-right extremism and far-right terrorism, and with them anti-Semitism, is high in Germany and we can't stress it often enough," Interior Minister Horst Seehofer told a news conference.
Germany had already in 2017 passed one of the most restrictive laws in the world to combat racist and incendiary speech online, requiring social media giants to remove illegal content or risk fines of up to €50 million.
It came after the arrival of more than one million asylum-seekers since 2015 fuelled far-right propaganda, and gives companies such as Twitter and Facebook 24 hours to remove posts that openly violate German law after they are flagged by users.
Detractors have criticised the law as curbing free speech and putting internet companies in the role of censors.
The new legislation goes further, compelling internet companies to flag problematic content including death threats and incitement of racial hatred to police.
Law enforcement authorities will have the power to order online platforms to provide them with user data in these cases for possible criminal prosecution.
Internet is not a 'lawless zone'
"It has to be clear that the internet is not a lawless zone and that while free speech reigns in the digital as well as the analogue world, it reaches its limits when it breaks the criminal code," Justice Minister Christine Lambrecht told reporters.
The measures will also make it more difficult for firearms to land in the hands of criminals.
The domestic intelligence watchdog will review arms purchases to make sure the buyer is not a known sympathiser with radical movements.
The measures come three weeks after a right-wing extremist who had posted a racist, misogynistic and anti-Semitic manifesto online tried and failed to storm a synagogue in the eastern city of Halle on the holiest day of the Jewish calendar.
When he was unable to blast open the locked door of the temple, he shot and killed two non-Jewish Germans -- one on the street outside and another at a Turkish snack shop.
Seehofer noted the fact that his weapons - reportedly built using a 3D printer - repeatedly failed to fire had prevented a potential "massacre".
"I don't even want to imagine what might have happened in Halle if we had American-style gun laws," Seehofer said, referring to the far less restrictive weapons legislation in the United States.