The Spanish international has fallen down the pecking order at Real Madrid, after the summer arrivals of James Rodriguez and Toni Kroos.
The Daily Express have reported that both clubs switched their interests from Barcelona winger Pedro, who looks set to join Juventus.
But the Manchester City could reportedly make another bid for the in-demand 22-year-old too.
City had made an offer for the player in the summer of 2013, but he decided to join Real instead.
The Premier League champions manager, Manuel Pellegrini, had worked with Isco during his time at Malaga manager.
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