The 47-year-old made the comments during arally in Lyon as she fought for the leadership of FN in 2010.
Speaking then, Le Pen said: “For those who like to talk about World War Two, to talk about occupation, we could talk about, for once, the occupation of our territory.
“It is an occupation of part of the territory, suburbs where religious law is applied. Sure, there are no armoured vehicles, no soldiers, but it is an occupation nonetheless and it weighs on residents.”
Marine Le Pen with her lawyer, David Dassa-Le Deist
Prosecution lawyer Bernard Reynaud said the 47-year-old should be acquitted because “her views did not target the whole Muslim community”.
Mr Reynaud agreed the comments were “shocking” but they were a matter of freedom of expression, and that “verbal violence is part and parcel of day to day politics, even if we deplore it”.
However, it will be up to judges to decide the verdict, and not the prosecutor.
Marine Le Pen
It was in the same south eastern city in 2010 that Le Pen had evoked the Nazi occupation.
Her comments were the main evidence against Le Pen as she was accused of “provocation through discrimination, showing violence or hate towards a group of people because of their religion”.
Islamic and anti-racism groups said the only reason Muslims were forced to pray outside was because there were not enough mosques in France.
They said that Le Pen deliberately compared them to Nazis because her party had an agenda against immigrants, and especially Muslim ones.
Le Pen said a ‘political trial’ had been launched against her so as to scupper her chances of winning elections.
She was charged in July 2014 after her immunity as a member of the European Parliament was lifted following a vote.
She believes her suspicions of Islam are shared by “a majority of French people”.
Jean Marie Le Pen, Marine Le Pen’s father, is a holocaust denier
Le Pen denied any wrongdoing, but faces a year in prison and a fine equivalent to £33,000.
FN is riding high in opinion polls, thanks partly to the economic disasters of the Socialist government, and the often ineffective opposition of Nicolas Sarkozy’s Republicans.
Another reason for its success has been the way Le Pen has so far distanced the party from its extremist past.
Her father, Jean-Marie Le Pen, founded the party and became its principal figurehead for decades, but he has been convicted numerous times of racism or inciting racial hatred.
There are some six million Muslims in France, and they argue that they are as entitled to worship as Catholics, Jews and other religions.
Le Pen spent an hour giving evidence in court in Lyon before returning to Paris.
Judges said a verdict would be handed down on a later date to be fixed.