Israeli police recommend indictment of Netanyahu on corruption charges

Israeli police recommended on Tuesday that Prime Minister Benjamin Netanyahu be indicted on bribery and breach of trust charges in a pair of corruption cases, dealing an embarrassing blow to the embattled leader that is likely to fuel calls for him to step down.

Netanyahu angrily rejected the accusations, which included accepting nearly $300,000 in gifts from a pair of billionaires. He accused police of being on a witch hunt, vowed to remain in office and even seek re-election.

"I will continue to lead the state of Israel responsibly and loyally as long as you, the citizens of Israel, choose me to lead you," an ashen-faced Netanyahu said in a televised address. "I am sure that the truth will come to light. And I am sure that also in the next election that will take place on time I will win your trust again with God's help."

The recommendations marked a dramatic ending to a months-long investigation into allegations that Netanyahu accepted gifts from Hollywood mogul Arnon Milchan and Australian billionaire James Packer, and suspicions that Netanyahu offered to give preferential treatment to a newspaper publisher in exchange for favourable coverage.

The recommendations now go to Attorney General Avihai Mendelblit, who will review the material before deciding whether to file charges.

Netanyahu can remain in office during that process, which could drag on for months.

But with a cloud hanging over his head, he could soon find himself facing calls to step aside. During similar circumstances a decade ago, Netanyahu, as opposition leader, urged then-prime minister Ehud Olmert to resign during a police investigation, saying a leader "sunk up to his neck in interrogations" could not govern properly.

Former prime minister Ehud Barak, a bitter rival of Netanyahu, called on him to suspend himself and for the coalition to appoint a replacement on Wednesday morning.

"The depth of corruption is horrifying," Barak said. "This does not look like nothing. This looks like bribery."

In a statement, police said there was sufficient evidence to indict Netanyahu in the first case, known as File 1000, for accepting bribes, fraud and breach of trust.

It said Netanyahu had accepted gifts valued at 750,000 shekels ($214,000) from Milchan, and 250,000 shekels ($71,000) from Packer. The gifts from Milchan reportedly included expensive cigars and champagne.

Police said that in return, Netanyahu had operated on Milchan's behalf on US visa matters, legislating a tax break and connecting him with an Indian businessman. It said he also helped Milchan, an Israeli producer whose credits include "Pretty Woman", "12 Years a Slave" and "JFK" in the Israeli media market.