The move is believed to have been made as a warning to Iran of the Jewish state's capabilities and and to show that Israel and Egypt, are cooperating against a shared threat. The two countries share a peace agreement but have had cool relations for years, AP reported.
By using the Suez, an Israeli submarine could reach the Persian Gulf off Iran in a matter of days, compared wiith weeks to sail around the southern tip of Africa.
The submarine participated in naval maneuvers in the Red Sea last month, said Israeli defense officials who requested anonymity because of the sensitivity of the issue. They did not giive further details.
Israel owns three dolphin-grade submarines, which can carry nuclear warheads. Israeli defense officials do not discuss the type of missiles that can be fired from the submarines, nor their range.
Israeli officials have a long-standing policy of neither confirming nor denying its nuclear arsenal and would not comment on Saturday. It is believed, however, to have the world's sixth-largest stockpile of atomic arms, including hundreds of warheads.
The maneuvers took place before the Iranian presidential election that set off a wave of protest demonstrations. Israeli officials believe that Iran intends to acquire the ability to build nuclear weapons regardless of who leads the country.
Iran is under three sets of UN Security Council sanctions for refusing to freeze its uranium enrichment program - an activity that Tehran insists is meant to generate nuclear fuel but which can also be used to produce fissile material for nuclear warheads.
Iran's nuclear program is particularly worrying for Israel because of Tehran's belligerent stance toward the Jewish state. Egypt also has tense relations with Iran which it believes is trying to spread its radical brand of militant Islam through the region.
The Jerusalem Post reported this was the first time Israeli vessels had crossed the Egyptian canal since 2005.
Egypt's relations with Iran worsened after Egyptian officials arrested members of the Lebanese Shiite guerrilla group Hezbollah in Egypt, accusing them of operating in its territory. Hezbollah is bankrolled by Iran, and Egypt accuses it of being a proxy to obtain Mideast regional influence.