The IOC evaluation report said Tokyo, Istanbul and Madrid all offer "high quality" bids and present their own "unique approach" to hosting the Summer Games.
The report touched on the financial crisis in Spain, saying Madrid's Olympic project was feasible despite the recession. The report was finalized in April and did not address the anti-government protests that have swept across Turkey recently and raised questions about Istanbul's bid.
Overall, Tokyo received the most glowing marks from the report, which described the Japanese capital as "a modern, dynamic city that sets global trends" and praised its compact venue plans and "one of the most modern and efficient public transport systems in the world."
The 110-page report, which is designed as a risk analysis, does not rank or grade the cities. But the document lays out strengths and weaknesses with details closely watched by the candidate cities as they head into the final stages of the race.
All three can take positives from the report, which was prepared for International Olympic Committee members ahead of a briefing by the bid cities next week in Lausanne, Switzerland.
The IOC will select the host city by secret ballot on Sept. 7 in Buenos Aires, Argentina. Before the vote, the cities will make their final direct presentations to the members.
Istanbul is bidding for a fifth time. Tokyo, which hosted the 1964 Olympics, is back for a second consecutive effort, and Madrid is trying for a third straight time.
The evaluation commission was chaired by IOC Vice President Craig Reedie of Britain. His panel visited each of the three cities in March.
"The evaluation commission made sure to produce a report that we feel is an accurate, objective and fair assessment of each of the three candidate cities," Reedie said. "We are indeed very pleased with the quality of each bid and it is clear that the IOC members will have a difficult choice to make this September in Buenos Aires."
The report is packed with facts and figures and covers venue plans, budgets, hotels, security, transportation, environment, marketing, anti-doping programs and government and public support.
"The commission confirms that each of three candidate cities could host the 2020 Olympic Games though, by the very nature of their vision and concept, the risks associated with each project are different," it said.
The report's influence on the race is uncertain. Not all IOC members read the evaluation reports carefully—if at all—and host-city votes are often driven by personal and geopolitical reasons more than technical issues.
The presentations to IOC members on July 3-4 are likely to be more crucial. It was at a similar briefing in 2009 where Rio de Janeiro, which did not rank highly in the technical report, seized the momentum in the race for the 2016 Olympics by pushing the theme that it was time to take the games to South America.
Paris rated higher than London in the IOC technical report for the 2012 Olympics, but the British capital was awarded the games.
The report said Tokyo's bid seeks to lift the nation's spirits following the devastating earthquake and tsunami that hit Japan in 2011. It said Tokyo had "well thought-out proposals" for ensuring "safe and secure games" and cited its $4.5 billion reserve fund for financing Olympic construction.
"We are proud that the report confirms our bid's very strong technical excellence, which offers certainty in uncertain times for sport," Tokyo bid leader and Japanese IOC member Tsunekazu Takeda said. "We are also aware that we must deliver much more than just a strong report."
Istanbul, which straddles Europe and Asia, is seeking to take the Olympics to a predominantly Muslim country for the first time. Istanbul would require the most spending and infrastructure work of the three cities, and the IOC report cited potential challenges with construction, traffic and other issues.
"This report confirms that Istanbul's bid is firmly on track," Istanbul bid leader Hasan Arat said. "We particularly welcome the IOC's clear endorsement of Istanbul's unique strengths. We know that we are at least on an equal footing with others in this race."
The report was finalized on April 19 before the protests in Turkey.
"The situation is now largely peaceful," Arat said in a conference call. "The violence that hijacked the peaceful protests has subsided. The most important thing is that the people are staging their democratic right to stage peaceful protests.
"I'm very proud of our people for standing up for their beliefs. This will not be a big issue for the bid. We are open and ready to discuss with IOC members asking questions about this. We feel Istanbul is in a very good position."
Madrid's bid has a capital construction budget of only $1.9 billion, based on the use of 28 existing venues.
Spain has been in recession for most of the past four years and has a 27.2 percent unemployment rate.
"The commission believe that the degree of financial risk facing Madrid 2020 should be manageable over seven years within the Spanish economy and taking into account government guarantees," the IOC report said.
Istanbul ranked highest in the IOC's public opinion survey, which was carried out in January.
The Istanbul bid garnered 83 percent support among city residents and 76 percent across Turkey. Madrid was next with 76 percent in the city and 81 percent in Spain, with Tokyo trailing with 70 percent in the capital and 67 in Japan.