[1] Which was the German army that took part in the siege of Leningrad?
The army most closely involved in the siege was von Küchler’s 18th Army, consisting of three Corps (1st, 26th and 38th).
Army Group North’s other army (Busch’s 16th Army) was deployed on the right flank of 18th Army, away from the city itself.
[2] Why the Germans failed to take the city?
By autumn 1941, the Axis did not have sufficient strength to take all three of its first-stage objectives (Ukraine, Moscow, Leningrad). At most, two of the three objectives might be winnable before winter set in. Choices had to be made.
There was never much argument about the Ukraine. Hitler and his generals agreed that they needed its rich agricultural resources, and such of its industry as still remained (although, in the event, the Germans never got around to restoring much of either resource). And the Ukraine lay on the way to a vital 2nd Stage objective, the Russian oil fields. So Army Group South got the precious panzers, etc. needed for capturing the Ukraine.
The real argument therefore lay between Moscow and Leningrad.
Hitler initially leaned toward choosing Leningrad, because it was the birthplace of Bolshevism and because it had much greater strategic value than Moscow. If the Soviets lost Leningrad, they would lose with it all access to the Baltic, which would then become a genuinely German lake. The Finns would be prepared to commit fully to the Axis cause, and with their support the Germans might well be able to seize Murmansk and Archangel (thus cutting off Russia from all Allied supply except via Siberia).
But the General Staff favored Moscow, and gradually persuaded Hitler to strip Army Group North of most of its panzers in order to add them into the drive on Moscow. The generals’ pro-Moscow arguments included: -
[a] the approaches to Leningrad were “bad tank country” – hilly and heavily forested.
[b] G̦ring and the generals between them assured Hitler that Leningrad could be smashed entirely by Luftwaffe bombing and artillery fire Рno need to take heavy losses in a house-to-house assault.
[c] the fall of Moscow might bring down the whole edifice of Communist rule in Russia.
Hitler reached his decision on September 5th, 1941. He summoned Halder and told him that: -
• The goal of encircling Leningrad had already been achieved; that sector would now become of "secondary importance."
• The attack against Moscow could begin within eight to ten days. Army Group North would aid this attack by sending panzer and motorized divisions to Army Group Center. Some help could also be provided by Army Group North's Sixteenth Army.
Obviously, Hitler was wrong. The “encirclement” of Leningrad was tenuous, and would not last through the winter. And the Finns had halted when they reached their 1939 border. Soviet records claim that, in the course of the siege, Leningrad was hit by 5000 bombs and 150,000 artillery shells. But the bombardments never came close to forcing the defenders to capitulate.
Despite strong protests from von Leeb, Army Group North was required to transfer almost all of its assault forces to Army Group Centre. The forces removed from the Leningrad front were five panzer and two motorized divisions, together with von Richthofen's 8 Air Corps. Army Group North retained just one panzer formation, 39th Pz Corps; and received some compensatory reinforcement in the form of an infantry division from France, the Spanish “Blue Division” and two parachute regiments.
But Army Group North no longer had the means to retain the initiative at Leningrad. In fact, it could not hold onto all of its positions when the Russians began to mount counter-offensives.
There was never any real chance that Leningrad would fall after Hitler emasculated Army Group North in September 1941.
Manstein’s mission to plan a fresh attack on the city in mid-1942 was also stillborn due to shortage of assault forces.