The tunnels are crucial for militant group Hamas, who keep hostages, food, fighters and munitions below ground level.
The flooding attempt, however, could contaminate Gaza's fresh water supply and take weeks to have any strategic effect, an unnamed US official told US media.
Israel is believed to be evaluating the strategy's effectiveness. Israel has not yet commented on the US reports.
Israel began its military operation in Gaza on October 7 in response to a Hamas terrorist attack, which killed 1,200 people. Around 240 people were also taken hostage by the militant group, which is recognized as a terrorist organization by the US, Germany, the EU and others.
