JERUSALEM (REUTERS) - Israeli police on Sunday (Dec 2) said their investigation had found sufficient evidence for bribery and fraud charges to be brought against Prime Minister Benjamin Netanyahu and his wife in a third corruption case against the Israeli leader.

The authorities allege Mr Netanyahu awarded regulatory favours to 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 denies 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.

In a joint statement with the Israel Securities Authority, police said they also found sufficient evidence to charge Bezeq's controlling shareholder Shaul Elovitch with bribery, as well as other officials at the company.

"The main suspicion is that the prime minister took bribes and acted in a conflict of interest by intervening and making regulatory decision(s) that favour Shaul Elovitch and Bezeq, and in parallel demanded directly and indirectly to interfere with content of the Walla website in a way that would benefit him," the statement said.

A spokesman for Mr Netanyahu said there was no legal basis for the police recommendations and that ultimately nothing would come of the investigation.

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