Deputy Foreign Minister Aziz Pahad told the International Court of Justice that the West Bank barrier was "not a security wall. It is a wall to enforce the occupation."
The barrier "eliminates the prospect of a two-state solution" to the Middle East conflict which is the aim of the internationally-backed road map peace plan, Pahad added.
The court has been asked by the UN General Assembly to rule on the legality of the barrier, although any verdict is advisory and non-binding.
The South Africans' chief counsel, RW Madlanga, told the court Israel was in clear violation of international law as laid down by the 4th Geneva Convention by building parts of the barrier across the Green Line, the 1949 armistice line separating the Jewish state from the Palestinian territories.
"The de facto consequences of construction of the separation wall which deviates from the Green Line ... is that that area will be annexed and incorporated in the state of Israel," he said.
"Attempts to create facts on the ground will be difficult to change. In international law, annexation of this kind is tantamount to conquest," Madlanga added.
Apartheid-era style boycott
The Palestinians have frequently referred to the barrier as an "apartheid wall", drawing a deliberate parallel with the regime in South Africa which was abolished a decade ago.
"Attempts to create facts on the ground will be difficult to change. In international law, annexation of this kind is tantamount to conquest"
Chief Counsel, South Africa
Israel's Justice Minister Tommy Lapid has also warned the country could face an apartheid-era style boycott over the barrier by the international community which imposed widespread sanctions against the former regime in Pretoria.
The Israeli government has boycotted the hearings at The Hague, arguing the case is beyond the court's competence.
South Africa is the first of a series of countries sympathetic to the Palestinian cause who are due to make presentations at the court before hearings end on Wednesday.
Apart from Israel, the United States and EU countries have also decided to boycott this week's proceedings.