Jerusalem (AFP) - Israeli police revealed Tuesday that two close associates of Prime Minister Benjamin Netanyahu were among the suspects in a new corruption probe, with five others central figures in the Bezeq telecommunications group.

The seven were arrested on Sunday, just days after police said there were grounds to indict Netanyahu for bribery, fraud and breach of public trust, in the biggest challenge yet to the right-wing premier's long tenure in power.

Those arrested included Nir Hefetz, a former personal spokesman for Netanyahu's family, and Shlomo Filber, a Netanyahu confidant appointed as director of the communications ministry by the premier.

Others included Shaul Elovitch, the controlling shareholder of Bezeq, members of Elovitch's family and senior Bezeq executives.

Police suspect that Bezeq's controlling shareholder Shaul Elovitch was granted business concessions in return for Netanyahu receiving positive coverage on Elovitch's news website Walla.

"As part of the investigation, suspicions accumulated on felonies concerning ethics, fraud, money laundering and securities violations, conducted over extended periods of time, frequently and systematically as part of relationships between Bezeq executives and public servants and their associates," police said on Tuesday.

Elovitch has already been investigated over a deal merging Bezeq with cable company Yes which saw him pocketing dozens of millions of dollars.

Netanyahu has not been named as a suspect in the Bezeq affair, but a spokesman for his family had responded to media reports on the investigation, calling them "yet another empty probe" that would yield nothing.

Meanwhile, police believe Netanyahu sought a secret deal for favourable coverage with the publisher of top-selling newspaper Yediot Aharonot, whose publisher Arnon Moses could also face bribery charges.

The attorney general must now decide how to move forward with the police recommendations, a process that could take months.