Reports say he was able to identify himself to police only after a rubber ball
had been removed from his mouth.
A foreign ministry official described Ambassador Tzuriel Refael's behaviour as
an unprecedented embarrassment.
The incident, which happened two weeks ago, has renewed calls for a radical
overhaul of the way Israel appoints and promotes its diplomats.
San Salvador was Mr Refael's first post as ambassador. He was promoted in 2006
from a technical position in the ministry which had involved several foreign
postings.
He was being recalled, although he had not broken any laws, foreign ministry
spokeswoman Zehavit Ben-Hillel told reporters.
She confirmed that lurid reports of the incident in the Israeli press were
accurate.
"We're talking about behaviour that is unbecoming of a diplomat," she said.
Israel has been rocked by a recent series of misconduct and corruption
scandals, shaking public confidence in the political leadership.
Haaretz website reports that police found Mr Refael in the Israeli embassy
compound where he had been found bound, gagged and naked apart from
sado-masochistic sex accessories.
In 2006, Israel's diplomatic service was criticised by the public watchdog for
its appointments system.
The state comptroller's report singled out the foreign ministry appointments
committee for its inadequate examination of candidates and lack of
transparency.