These concerns intensified after Yossi Cohen gave a speech at the Herzliya Conference this week, in which he divulged that under his leadership, Mossad has set up a security-policy wing tasked with promoting peace in the Middle East.
"Mossad has a role in identifying opportunities for peace in order to maximize our influence in this area," Cohen told the conference on Monday.
For the diplomatic corps, the speech was an indication of the future of the ministry.
"Cohen's announcement is the final nail in the Foreign Ministry's coffin," said a source.
"Cohen made clear who is leading Israel's foreign policy in the region, and that is the Mossad and not the ministry."
Officials were also taken by surprise when Cohen announced the opening of a Foreign Ministry bureau in Oman, as a result of Mossad's efforts in the UAE. The speech in Herzliya was the first time anyone in the ministry had heard about the plan.
Prime Minister Benjamin Netanyahu visited the UAE last year, accompanied by the Mossad chief.
Cohen also told the audience at the conference that Israeli-Russian relations were improving, thanks to Mossad's efforts.
Senior Foreign Ministry officials also expressed concern that Cohen and National Security Advisor Meir Ben-Shabat were intending to take over more of the ministry's areas of operation and that they are motivated by instructions from above, alluding to the Prime Minister's Office.
The senior sources said Mossad officials do not inform the ministry of their actions in the Middle East and beyond.
The challenge to the ministry's authorities compounds their difficulties after their budget was slashed by the Netanyahu government, restricting its abilities to carry out its job.
The officials gave an example of instructions sent to Israeli embassies and consulates telling envoys to refrain from consular visits to the approximately 400 Israelis being held in prisons around the world.
Ministry employees have been taking industrial action for the past week and a half, and are refusing to issue passports in both the New York and Los Angeles consulates while threatening to disrupt official state visits to Israel and foreign trips by Israeli officials.