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.
We're talking about behaviour that is unbecoming of a diplomat
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.