The brief answer to why some Israelis have german-sounding names would be “because of Ashkenazim” – Jewish people who settled in the lands of Germany, Austria, even Poland who kept the predominately Eastern European rites and traditions of Jewish practice.
In history, Jewish people settled into the Holy Roman Empire and were even invited to England by William the Conqueror, partly as a way to jump-start education and boost the local economies. They were physicians, translators, administrators, merchants, lenders, and more, even with religious and secular restrictions imposed on their communities.
Over time, the Jewish communities that had been based primarily in continental and eastern European lands became known as the Ashkenazim, and they primarily used the Yiddish language (a language which developed from Hebrew, German, as well as languages like Russian and Polish) as a method of communication.
They developed their own rites, traditions, literature, and customs. When naming laws were implemented throughout Europe, many Ashkenazim took on surnames that reflected the language of their location – most often, the German-speaking areas they were already based in. By the time of World War II, estimates place Ashkenazim at about 92% of the Jewish world population (and consequently as the vast majority of Jews in Europe) with Yiddish speakers worldwide at approximately 11 to 13 million, with Poland and Germany as major cultural centers.
With the advent of the Holocaust, many Ashkenazim (along with Jews practicing other rites such as Mizrahi and Sephardim), as well as ethnicities, other religions, and other people deemed a danger to the Nazi regime, perished. Jewish people sought refuge in other countries, such as the United States. With the end of World War II and the establishment of the State of Israel, and consequently the establishment of Israel’s Law of Return in 1950, the newly established Israel saw a flood of Ashkenazim.
Further Reading: Non-Jewish Victims of Persecution in Germany (Yad Vashem)