War-crimes charges were dropped Thursday against a German World War II veteran after an Italian court learned he has died.

Ottmar Muhlhauser, who was an Army lieutenant in 1943, was the only known surviving officer from the German division that massacred Italian prisoners on the island of Kefalonia. The court said Muhlhauser died at his home in Munich at the age of 88, ANSA, the Italian news agency, reported.

Kefalonia, the largest of the Ionian islands off the northwest coast of Greece, was occupied by Italian and German soldiers during the war. After Italy signed an armistice in 1943 and changed sides, the commander of the Italian Acqui Division decided to fight the Germans.

After the division surrendered to the Germans, thousands of Italians were shot trying to give themselves up or summarily executed. Gen. Hubert Lanz, the German commander, was convicted of war crimes at Nuremburg and sentenced to 12 years, serving three.

Muhlhauser continued to defend the massacre in interviews during a German investigation in 1967 and again in 2004.

''They were traitors and there is only one response to betrayal: execution,'' he said in 1967.