Israeli police want to question Australian billionaire James Packer in connection with a corruption probe into Prime Minister Benjamin Netanyahu, local media has reported.

The Australian Federal Police said they were aware of the Israeli media reports concerning Mr Packer.

The ABC understands that Israeli police have been in contact with the AFP in regards to the corruption investigation against Mr Netanyahu.

The AFP told the ABC they did not discuss assistance requests from other countries, but that the agency "works closely with its international counterparts to investigate and prosecute allegations of corruption".

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Mr Netanyahu has been questioned four times by police in relation to the corruption probe and allegedly receiving inappropriate and undeclared gifts.

He has described Mr Packer as a "good friend".

Israel's Interior Minister Arye Dery told the ABC Mr Packer's lawyer had asked him about arranging citizenship or residency in Israel for the businessman, a move that could bring Mr Packer significant tax benefits.

How did an Aussie businessman and Israel's PM meet?

The relationship between one of Australia's richest men and the Prime Minister of Israel can be traced back to a star-studded dinner held in Mr Netanyahu's honour in March, 2014.

The evening's host was Hollywood producer and Israeli billionaire businessman Arnon Milchan. There — but hiding from the cameras — was the party's co-host, Mr Packer.

"Mr Milchan was the guy who brought him to Israel, who introduced him to the Prime Minister," Raviv Drucker, one of Israel's most high-profile investigative journalists, told 7.30.

"Milchan knew Mr Packer's father, so they are very close."

Mr Milchan was already part of a close circle of billionaires Mr Netanyahu surrounded himself with. Mr Packer soon became part of the pack.

His relationship with Mr Netanyahu quickly developed.

James Packer became part of a close circle of billionaires that Benjamin Netanyahu surrounded himself with. ( AAP: Joe Castro )

Mr Packer purchased a million-dollar beachfront mansion in Israel right next door to the private home of Mr Netanyahu, and began making substantial investments in Israel's booming tech market.

In March 2015, Mr Packer was a surprise special guest in the audience when Mr Netanyahu addressed the US Congress in Washington.

Mr Packer then appeared at another speech Mr Netanyahu gave to the UN General Assembly in New York later that year, standing with senior Israeli officials and the Netanyahu family.

A recent TV report by Drucker on Mr Packer's relationship with the Prime Minister sent shockwaves across Israel.

The report alleged Mr Packer showered lavish treatment on the Prime Minister's family, particularly on his 25-year-old son, Yair.

The report claimed Mr Packer gave Yair numerous free luxurious holidays at properties he owns and rents around the world.

A spokesperson for Mr Netanyahu told Channel 10 Israel Mr Packer was "a friend of the family" and Yair, "has the right to be hosted by friends".