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The annealed Ising magnet on percolation clusters is studied by means of a mapping into a Potts-Ising model and with the Migdal-Kadanoff renormalization-group method. The phase diagram is determined in the three-dimensional parameter space of the Ising coupling K, the bond-occupation probability p, and the fugacity q, which controls the number of clusters. Three phases are identified: percolating ferromagnetic, percolating paramagnetic, and nonpercolating paramagnetic. For large q the phase diagram includes a multicritical point at the intersection of the Ising critical line and the percolation critical line. In the case of random bond percolation (q = 1) the Ising critical line is: p(1 - e-2K) = 1 - exp(- 2L(C)), where Lc is the pure-Ising-model critical coupling.