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Diplomat Christian Clages liked several of the tweets - including one involving notorious US anti-Semite and former Ku Klux Klan leader David Duke - on his verified Twitter account before "unliking" them, Bild said.
One of the liked tweets said "hats off" above a video of an attack on Israeli soldiers.
Another like involved a tweet by Duke about an alleged massacre by Jewish pre-state forces in 1948. Clages' Twitter account allegedly liked a response to Duke's tweet that read: "*Zionist".
A foreign ministry spokesman told Bild that the contents of the tweets were "unacceptable".
"We have immediately launched an internal investigation to determine how these 'likes' could occur," the spokesman said.