Manchester City has been linked to a January transfer for Isco.
Manuel Pellegrini said City already has a "complete squad."
Isco played for Pellegrini with Malaga.
"I don't talk about rumors," Pellegrini said in a news conference. "I am telling you what I am thinking about for our squad in this moment."
Pellegrini has appeared to rule out any major moves.
"Really I think the squad is complete. As always, I said that we are not going to close the window [now] but we are not really thinking of any special players to bring in."