Isco has played in all three of Real's La Liga fixtures so far this season, and started in Tuesday night's Champions League win over APOEL. As a result, the Spain worldwide will now remain under contract with Los Blancos until the summer of 2022.
Isco's previous deal was due to expire next summer but the new contract will keep the Spain worldwide at the Bernabeu stadium until June 2022.
With Real Madrid 2-0 down against Atletico, Isco scored the tie-killing goal that booked Real's place in the Champions League final in Cardiff.
Catalan radio station RAC 1 added more fuel to the saga after claiming that Barcelona offered the Spaniard a signing bonus of €20m to turn down a new deal at Real and move to the Nou Camp as a free agent once his contract expires.
Russian Military Exercise Sparks Information War
They are there to emphasise Nato's determination to defend its allies - and Russia's closest Western neighbours. Belarus has formally notified the OSCE that Zapad will be held on Belarusian territory from September 14-20.
Bale has been accused of playing below par since returning from injury at the tail end of last season, while AS reports that some in the crowd yelled "speak Spanish".
United manager Jose Mourinho revealed this summer that the English club is willing to sign Bale but the Spanish outfit declined any deal. "I will never forget it". My intention was to succeed here, in the team that put their trust in me when I was at Malaga.
"The truth is that I never thought about leaving". I've had bad times but that makes me savour the good moments.
"I have no regrets, I've won three Champions Leagues in four years, and the team is still hungry to keep going and to win more trophies". I am very happy and very proud to present the best team in the world. "It's the biggest club in the history of the game".