State-run Israel radio and other stations and newspapers say the diplomatic mission itself will remain in Turkey.
A ministry spokesman would neither confirm nor deny Tuesday's reports.
At least four Turkish activists were among the nine killed by Israeli naval commandos in the raid Sunday on an international flotilla bringing aid to Gaza.
Turkish Prime Minister Recep Tayyip Erdogan accused Israel of a "bloody massacre" and thousands of Turks have protested across the country.
COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? email@example.com