Diplomatic sources in Jerusalem said that the reports come as a surprise, since Jerusalem had expected Morocco to join Egypt and Jordan in withstanding Arab pressure to curtail ties.
"We are saddened, disappointed, and surprised by this decision," one diplomatic source said.
Since the 1970s, Morocco has been a discreet broker of rapprochement between Israel and Arab countries, and established low-level diplomatic relations with Israel in 1994. Morocco has an interest section in Tel Aviv staffed by one diplomat, who is presently not in the country. Israel's Rabat bureau has a number of staffers.
Morocco is the latest of several Arab countries to curtail ties over this month's violence. Tunisia cut low-level ties Monday.
Earlier this month, Oman closed Israel's commercial office in Muscat and shut its mission in Tel Aviv to show its support for the Palestinians. Qatar was reported to be reviewing its low-level ties.