What is the right course of action now?

Your answer is correct because the police officer is signaling you to proceed carefully through the junction. In German traffic rules, traffic police directions always take precedence over traffic lights and signs. Although the traffic light is red and there is a "yield" sign, you must follow the police officer's signal. The police officer is standing with their arm extended horizontally, meaning traffic from the side (like the blue van) must stop, and you may carefully cross the junction. Waiting outside the junction or letting the blue vehicle move first is not required here because the officer is controlling the flow of traffic and allowing you to go. Remember, always obey the police officer’s signals first, even if other traffic rules appear to say otherwise.