The omens were there before the race as Raikkonen had never finished a race at the Hockenheim circuit, but the Finn was left shocked after yet another mechanical failure cost him dear.
Engine failure in practice for the last two races in France and Britain cost him potential victories and the sight of the McLaren shuddering to a halt bought shivers to the team on pit wall.
But there was joy in the opposing camp as was there in the shadows to steal the win, ease home to his seventh career victory, and push himself 36 points clear of Raikkonen in the championship race.
It was little satisfaction for McLaren that Colombian Juan Pablo Montoya raced through from 20th on the grid to secure them second place, thanks to a different strategy and the teams clear race-winning pace.
But a podium finish was more of a delight for Briton Jenson Button as it was his team’s first classified top-three finish of the season and proved they are back on the pace after a tough year so far.
The German was followed home by his brother Ralf, of Toyota, in sixth with David Coulthard claiming his sixth points finish for Red Bull and Felipe Massa securing the final point for Sauber.
Raikkonen made the perfect getaway from pole to lead cleanly into the first corner but his fellow front-row starter Button, starting on the dirty side of the track, was not so lucky.
Button was easily passed by Alonso for second off the line then dropped down to fourth when world champion Schumacher got past in an aggressive manoeuvre on the outside of turn one.
Behind them the field jostled for position with German Nick Heidfeld making up two places to claim fifth in his Williams and Scot Coulthard stepping up from 11th to sixth with a stunning start.
Montoya, who started from the back after crashing out in qualifying, also managed to pick his way through the field into 11th by the end of the first lap and was quickly up another two places into ninth.
But Takuma Sato, Jarno Trulli and Mark Webber were all forced to pit at the end after minor collisions with Sato having a nose cone changed on his BAR-Honda and Webber climbing out of his Williams with apparent broken suspension.
Sauber driver Jacques Villeneuve collided with Grand Prix debutant Robert Doornbos’ Minardi on the fourth lap and both drivers were forced to pit but came out again after the incident damage had been checked over.
With 10 laps gone Raikkonen led Alonso by around four seconds with Schumacher more than ten seconds back in third and Button fourth and two laps later Webber returned to the track with his repairs complete.
Heidfeld was the first of the leaders to stop, coming in at the end of lap 15, then Button and Coulthard came in on lap 20 from fourth and fifth places respectively.
Doornbos was handed a 10-second stop-go penalty for changing tyre and refuelling at the same time and Red Bull driver Christian Klien had a trip through the gravel at turn 12 on the 23rd lap.
Alonso and Schumacher had made their first stops one lap previously, then Raikkonen set the fastest lap on lap 24 before peeling into the pits at the end of the 25th lap to make his stop.
He came out with the entire length of the pit straight between him and second-placed Alonso with Schumacher third, Button fourth and Montoya, who stopped on lap 27, climbing to fifth having fuelled up after his qualifying mistake.
Villeneuve crashed again on lap 28, when he was pushed onto the grass when trying to pass Tiago Monteiro and clattered into the back of the Jordan, smashing off the Sauber’s nosecone and handing Monteiro a 10-second stop-go.
But it all went disastrously wrong for Raikkonen on lap 36 when his car came to a sudden shuddering halt at turn five and he walked away despondently as his car was pushed away.
That put Alonso ahead with a 30-second advantage over Schumacher but Button had closed on the Ferrari and made a clean move to make it past for second at the hairpin on lap 45.
Montoya, now in fourth, stayed out later than the rest of the field through the second set of stops and, in doing so, was able to leap-frog both Schumacher and Button to move into second place, but it was little consolation for McLaren.
