The Seventh Million by Tom Segev does some discussing of the relations and how they affected Israeli society, and how Ben-Gurion worked with Adenauer. It does this against the backdrop of the Eichmann trial and what followed, but a couple chapters do relate some of German-Israeli relations.

I haven't seen any other books that delve into it too specifically, but other scholarly works can be found on JSTOR, by searching "German Israel". You'll find articles dating as far back as 1954 discussing:

The Origins/Character of the Treaty and Reparations

German Reparations to Israel: The 1952 Treaty and Its Effects P. G. The World Today, Vol. 10, No. 6 (Jun., 1954), pp. 258-274

Images, Process and Feedback in Foreign Policy: Israel's Decisions on German Reparations Michael Brecher The American Political Science Review, Vol. 67, No. 1 (Mar., 1973), pp. 73-102

Amounts and Basic Information on the Reparations

Austro-German Compensation for Israel Journal of Palestine Studies, Vol. 2, No. 1 (Autumn, 1972), pp. 147-148

Comparison and Methods of Reconciliation

The Principle and Practice of 'Reconciliation' in German Foreign Policy: Relations with France, Israel, Poland and the Czech Republic Lily Gardner Feldman International Affairs (Royal Institute of International Affairs 1944-), Vol. 75, No. 2 (Apr., 1999), pp. 333-356

I recommend all of the above, but what you're looking for is probably most covered by Brecher, Segev (in small part), and P.G (the 1954 discussion).

Let me know if you have more questions :).