Israeli police have recommended indicting Prime Minister Benjamin Netanyahu and his wife Sara on bribery charges involving Israel's telecom giant Bezeq.

Key points: Authorities say the PM exchanged regulatory favours for positive news coverage

Authorities say the PM exchanged regulatory favours for positive news coverage Mr Netanyahu is also under two investigations, which Israel's attorney-general is weighing up

Mr Netanyahu is also under two investigations, which Israel's attorney-general is weighing up His government holds a one seat advantage, and pundits say the allegations could trigger a snap vote

Authorities said Mr Netanyahu awarded regulatory favours to Israel's leading telecommunications company, Bezeq Telecom Israel, in return for more positive coverage of him and his wife on a news website, Walla, owned by the company.

Mr Netanyahu has denied any wrongdoing.

If indicted, the four-term Prime Minister would be facing one of the greatest challenges to his political survival.

Despite his dominance of Israeli politics, the newest police recommendation comes just after his right-wing coalition's majority was reduced to a precarious one seat in parliament.

The final decision on whether to indict rests with Israel's attorney-general, who is still weighing whether to charge Mr Netanyahu in the other two cases.

Most of Netanyahu's coalition partners have said they will wait for a decision by the attorney-general before making any decisions about how to react to the allegations.

Some analysts have said Mr Netanyahu could call a snap vote in light of the legal proceedings against him.

The next national election is not due until November 2019, but Mr Netanyahu may want to seek a renewed mandate from the people, forcing a prosecutor to think twice before indicting him.

Shortly after the police recommendations were made public, Mr Netanyahu issued a statement saying that the allegations had no legal basis and that ultimately nothing would come of the investigation.

"I am sure that also in this case the relevant authorities, after examining the matter, will reach the same conclusion — that there was nothing because there is nothing," he said.

Allegations have claimed Bezeq chair and chief executive

Stella Handler, former chief executive of Bezeq, was detained earlier in 2018 amid fraud allegations. ( Reuters: Ronen Zvulun )

In a joint statement with the Israel Securities Authority, police said they also found sufficient evidence to charge Shaul Elovitch, a family friend of Mr Netanyahu, with bribery.

At the time Mr Elovitch was chairman and controlling shareholder of Bezeq. The authorities said there was also evidence to charge the company's then-chief executive Stella Handler with fraud.

Mr Elovitch and Ms Handler have denied wrongdoing.

They were both arrested and detained briefly earlier this year and have resigned from Bezeq.

Reuters/AP