The Egyptian-born preacher -- who is wanted in the United States on a terrorism indictment -- also said Israel was blackmailing western politicians in order to control their governments' policies.
"Jews know how to control people. This is how they know how to control our leaders," he said in a October 2000 sermon, watched on video by jurors.
The 47-year-old, who holds British citizenship, denies 15 charges including soliciting murder, inciting racial hatred and possessing documents likely to be useful in preparation for terrorist acts.
Jurors heard Hamza criticize "the dogs of the West" for not condemning Israeli policy.
Western governments "act like sugar daddy for Israel" even though "they hate them very much" because the Israelis keep files on every politician detailing their secrets, he claimed.
In the October 2000 sermon, Hamza said Muslims could not have a peace treaty with Jews.
"They are enemies to one another and Allah has cursed them," he said.
"This is why he send Hitler for them. Jews they have nowhere to go, they are going to be buried in Palestine all of them."
He then told his audience that there was no liquid loved more by Allah "than the liquid of blood."
"Whether you do it by the lamb, or you do it by a Serb, you do it by a Jew, you do it by any enemies of Allah," he said.
Hamza is also accused of possessing a "terrorism manual" -- the Encyclopedia of Afghani Jihad -- containing instructions for making explosives, identifying targets and operating terror cells.
He is wanted in the United States on an 11-count indictment from 2004 that charges him with conspiring to establish a terrorist training camp in Oregon; conspiring to take hostages in Yemen and facilitating terrorist training in Afghanistan. However, under British law, the domestic charges take precedence over the U.S. case.
The trial continues.