I was under the impression that he wanted to forcibly send the Jews to Palestine. Besides, the Catholics (and others) have had their share of Anti-Semites as well.
Luther and his final solution.....
What shall we Christians do with this rejected and condemned people, the Jews? Since they live among us, we dare not tolerate their conduct, now that we are aware of their lying and reviling and blaspheming. If we do, we become sharers in their lies, cursing and blasphemy. Thus we cannot extinguish the unquenchable fire of divine wrath, of which the prophets speak, nor can we convert the Jews. With prayer and the fear of God we must practice a sharp mercy to see whether we might save at least a few from the glowing flames. We dare not avenge ourselves. Vengeance a thousand times worse than we could wish them already has them by the throat. I shall give you my sincere advice:
First to set fire to their synagogues or schools and to bury and cover with dirt whatever will not burn, so that no man will ever again see a stone or cinder of them. This is to be done in honor of our Lord and of Christendom, so that God might see that we are Christians, and do not condone or knowingly tolerate such public lying, cursing, and blaspheming of his Son and of his Christians. For whatever we tolerated in the past unknowingly and I myself was unaware of it will be pardoned by God. But if we, now that we are informed, were to protect and shield such a house for the Jews, existing right before our very nose, in which they lie about, blaspheme, curse, vilify, and defame Christ and us (as was heard above), it would be the same as if we were doing all this and even worse ourselves, as we very well know.
Second, I advise that their houses also be razed and destroyed. For they pursue in them the same aims as in their synagogues. Instead they might be lodged under a roof or in a barn, like the gypsies. This will bring home to them that they are not masters in our country, as they boast, but that they are living in exile and in captivity, as they incessantly wail and lament about us before God.
Third, I advise that all their prayer books and Talmudic writings, in which such idolatry, lies, cursing and blasphemy are taught, be taken from them. (remainder omitted)
Fourth, I advise that their rabbis be forbidden to teach henceforth on pain of loss of life and limb. For they have justly forfeited the right to such an office by holding the poor Jews captive with the saying of Moses (Deuteronomy 17 [:10 ff.]) in which he commands them to obey their teachers on penalty of death, although Moses clearly adds: “what they teach you in accord with the law of the Lord.” Those villains ignore that. They wantonly employ the poor people’s obedience contrary to the law of the Lord and infuse them with this poison, cursing, and blasphemy. In the same way the pope also held us captive with the declaration in Matthew 16 {:18], “You are Peter,” etc, inducing us to believe all the lies and deceptions that issued from his devilish mind. He did not teach in accord with the word of God, and therefore he forfeited the right to teach.
Fifth, I advise that safeconduct on the highways be abolished completely for the Jews. For they have no business in the countryside, since they are not lords, officials, tradesmen, or the like. Let they stay at home. (...remainder omitted).
Sixth, I advise that usury be prohibited to them, and that all cash and treasure of silver and gold be taken from them and put aside for safekeeping. The reason for such a measure is that, as said above, they have no other means of earning a livelihood than usury, and by it they have stolen and robbed from us all they possess. Such money should now be used in no other way than the following: Whenever a Jew is sincerely converted, he should be handed one hundred, two hundred, or three hundred florins, as personal circumstances may suggest. With this he could set himself up in some occupation for the support of his poor wife and children, and the maintenance of the old or feeble. For such evil gains are cursed if they are not put to use with God’s blessing in a good and worthy cause.
Seventh, I commend putting a flail, an ax, a hoe, a spade, a distaff, or a spindle into the hands of young, strong Jews and Jewesses and letting them earn their bread in the sweat of their brow, as was imposed on the children of Adam (Gen 3[:19]}. For it is not fitting that they should let us accursed Goyim toil in the sweat of our faces while they, the holy people, idle away their time behind the stove, feasting and farting, and on top of all, boasting blasphemously of their lordship over the Christians by means of our sweat. No, one should toss out these lazy rogues by the seat of their pants.
While I argue about that Luther was not an anti-semite, there is no denying that his writings were taken as one of the defined roots of the nutzi philosophy (along with others) -- read William L Shirer's book. Note that Shirer was a Lutheran as well, so lets separate Luther's religion from his anti-Jewish writings
There were other anti-Jewish actions in Western Europe before the 1800s, like when the English kicked out the Jews in the 13th century or the Spanish in the 16th, but in both those cases the force of words was not as powerful as Luther's
Luther did have a forceful personality (after all, he had the will that after missing death he went into the priesthood) and he did create a grammar of standard German
Luther was taken up by northern Germans as a paragon of "Germanism" against the Catholic Latins
This became the case even in Catholic Austria where the feeling was to become German one had to not be Catholic and was exacerbated by Bismark's kulturkampf
But I digress. Luther's anti-Jewishness would have remained a footnote if Prussia had not been the one to unite the Germans into an Empire
The Prussians were a Calvinist state that expanded at the expense of Catholic Poland and felt an "racist" superiority to the Poles who, while heavily Catholic were also heavily Jewish(60% of world Jewry lived in Poland in 1772) and this influenced their idea of a master "race" which was then exacerbated by the Prussians creating the German nation. Germany was a multitude of many countries and the common "uniting" bond couldn't be Christianity as the Bavarians were Catholic and the northerners were Calvinist or Lutheran
So there was the subtle attempt for a reach to the Nordic past -- as witnessed in Wagner's Ring Cycle operas ("kill the wabbit :)") -- this, merged with other theories in Europe (incidently the nordic "super race" theory was spouted by a Frenchman who was in love with germany and became Wagner's son-in-law) and Neitsche's fevered writings (the Nazis skimmed over the fact that Neitsche also called the Germans a horrible race) mixed with later Victorian England's "superior race" theory -- yes, the English also had a key part to play when, after Company rule ended, they used their superior race theory to come up with British Israeliism etc.
This met up in the late 1800s with the Russian anti-semitism -- which had gone on in parallel since 1772 -- until that time, Russia had next to no Jews and there were no maltreatments of this small number. But then, the partitions of Poland happened and Russia grabbed the lion's share of poland and suddenly got a huge number of Jews.
It did not know what to do with these aliens and official persecution began, this was followed by pogroms etc. (which in a way was what prompted the first migrations to Israel) and culminated in concentration camps and the Russian Tsar's secret police
In WWI the Jews actually favored the Germans over the Russians as the Germans were more tolerant and had many Jews in their army and beureaucracy
Hitler learned from Wagner-Nietsche-English Victorian racial theories and Luther's writings but also from the Russian example including the horrible Protocols -- he also learned of concentration camps etc. from the Russians and later the Soviets