The police also recommended that charges of fraud and breach of trust be brought against Netanyahu and his wife.
Police said their investigation has established an evidentiary foundation to charge Mr Netanyahu and his wife Sara with accepting bribes, fraud and breach of trust.
The Israeli leader insisted that the claims against him were baseless, calling the recommendations and the case a "transparent, so petty, and contaminated process from the beginning".
The case involved suspicions that Netanyahu, in his role as communications minister from 2014 to 2017, while he was also the premier, made controversial decisions that benefited Shaul Elovitch, who controlled Israel's largest telecommunications company, Bezeq.
Journalists who previously worked for Walla have confirmed that they were pressured into exclusively covering Netanyahu in a positive light.
Police say there is enough evidence to charge Elovitch with bribery, interfering with an investigation, and financial crimes. Netanyahu, who just two weeks ago brought his coalition from the brink of collapse after a junior partner bolted, denied any wrongdoing.
"These recommendations were determined and leaked even before the investigations began", Netanyahu said in a statement on Sunday.
"There was nothing because there is nothing", he concluded.
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Talk of early elections has become a staple of Israel's political landscape in recent months, but polls have shown the cascade of allegations against Netanyahu wouldn't cost him a fifth term.
Mr Elovitch was chairman and controlling shareholder of Bezeq at the time of the allegations.
He is also suspected of negotiating favorable press coverage with the Yedioth Ahronoth publisher Arnon Mozes in Case 2000. His wife already faces trial in a separate case for allegedly misusing state funds.
According to messages exchanged that day between Elovitch and Yeshua, Hefetz had told Elovitch that the prime minister's staff believed the two investigations concerned Elovitch and Netanyahu's relationship with Australian billionaire James Packer. "Elections now!" she said.
Following the latest statement from police on Sunday, opposition politicians once again called on Netanyahu to resign.
"Netanyahu must go home before he destroys the law enforcement in order to save his own skin". The White House is trying to build a coalition of Middle Eastern leaders to deter Iran, to that end encouraging the warming of relations between Israel and Arab states that outwardly shun it and sidelining the Israeli-Palestinian conflict.
"A prime minister with so many criminal cases around him can not continue in his job and must resign", said Avi Gabbay, the head of the Labor party.
The other is Mr Shlomo Filber, a Netanyahu ally for more than 20 years and former director general of the communications ministry.