Israeli Prime Minister Benjamin Netanyahu indicted on corruption charges

Israel's attorney general formally charged Prime Minister Benjamin Netanyahu on Thursday in a series of corruption cases, throwing the country's paralyzed political system into further disarray and threatening the longtime leader's grip on power.

Move creates more uncertainty over who will lead country after 2 inconclusive elections this year

Israel's attorney general on Thursday indicted Prime Minister Benjamin Netanyahu on charges of fraud, breach of trust and bribery. (Gali Tibbon/AFP via Getty Images)

Israel's attorney general formally charged Prime Minister Benjamin Netanyahu on Thursday in a series of corruption cases, throwing the country's paralyzed political system into further disarray and threatening the longtime leader's grip on power.

Capping a three-year investigation, Attorney General Avichai Mandelblit charged Netanyahu with fraud, breach of trust and accepting bribes in three different scandals. It is the first time a sitting Israeli prime minister has been charged with a crime.

Netanyahu, in a nationally televised address, called his indictment an "attempted coup" and said the investigation was tainted and stemmed from "false accusations."

"They weren't after the truth, they were after me," Netanyahu said of investigators.

As the investigation gained steam in recent months, Netanyahu has repeatedly lashed out at the media, the police and the justice system, drawing accusations that he was undermining the country's democratic institutions.

"I will continue to lead the country, according to the letter of the law, with responsibility, devotion and concern for all of our futures," he said, standing at a podium against the backdrop of four Israeli flags in his official residence.

His main centre-left challenger in the two elections this year, Benny Gantz, tweeted in response: "There is no coup in Israel, just a bid [by Netanyahu] to hang onto power."

Mandelblit, who said Thursday was "a difficult and sad day," rejected accusations that his decision was politically motivated and said he had acted solely out of professional considerations.

"A day in which the attorney general decides to serve an indictment against a seated prime minister for serious crimes of corrupt governance is a heavy and sad day, for the Israeli public and for me personally," he told reporters.

According to the indictment, Netanyahu accepted hundreds of thousands of dollars of champagne and cigars from billionaire friends, offered to trade favours with a newspaper publisher and used his influence to help a wealthy telecom magnate in exchange for favourable coverage on a popular news site.

The indictment does not require Netanyahu to resign, but it significantly weakens him at a time when Israel's political system appears to be limping toward a third election in under a year.

Gantz's political party said the prime minister has "no public or moral mandate to make fateful decisions for the state of Israel."

Benny Gantz, Blue and White party leader, attends a news conference after failing to form a government on Wednesday in Tel Aviv. Israel may face third election after political rivals Gantz and Netanyahu struggled to form coalition. (Amir Levy/Getty Images)

Mandelblit criticized the often-heated pressure campaigns by Netanyahu's supporters and foes to sway his decision, which came after months of deliberations. Both sides had staged demonstrations outside or near his home.

"This is not a matter of right or left. This is not a matter of politics," he said. "This is an obligation placed on us, the people of law enforcement and upon me personally as the one at its head."

'Miserable political situation'

Earlier Thursday, Netanyahu's main party rival called for a leadership primary should the country, as expected, go into an unprecedented third election in less than a year.

Gideon Saar's remarks came as Israel's ceremonial president announced that for the first time in the country's history, no candidate has been able to form a government following recent elections, setting the country on a course for yet another vote after two inconclusive results.

Reuven Rivlin formally informed the Knesset that neither Netanyahu nor his chief challenger Gantz have completed the task of building a coalition in the time allotted to them. The expiration of the presidential mandate kicks off the final 21-day window before new elections must be called.

Rivlin called it a "miserable political situation" and pleaded with lawmakers to find some form of compromise.

"This is one of the most important times for soul-searching the state of Israel has known," he told the Knesset. "Let there be no illusions: this politics of disruption has to stop ... each one of you should look to their conscience and answer one question: 'What is my duty to the state of Israel?' "

Israeli President Reuven Rivlin formally informed the Knesset that neither Netanyahu nor Gantz had formed a coalition. (Gali Tibbon/AFP via Getty Images)

Netanyahu, Gantz or any other sitting lawmaker can hypothetically present the backing of a majority of the Knesset's 120 members in the coming three weeks. But given the prolonged stalemate and unsuccessful mediation efforts it increasingly appears the country is headed toward yet another vote. Opinion polls are already predicting a very similar deadlock, signalling additional months of horse-trading and uncertainty.

The only plausible way out of a third election — and the prolonged political paralysis that has gripped Israel for the past year — would be a unity government between Netanyahu's ruling Likud and Gantz's centrist Blue and White party.

Blue and White edged Likud by one seat in the previous election and together they could control a majority. Both Netanyahu and Gantz have expressed an overall openness to the concept but during weeks of talks they could not agree on the terms of a power-sharing agreement, including who would serve first as prime minister.

Netanyahu has refused to drop his alliance with smaller nationalist and ultra-Orthodox Jewish parties, which was a non-starter for kingmaker politician Avigdor Lieberman.

There don't appear to be unbridgeable gaps between Likud and Blue and White and the impasse has mostly revolved around personnel — but the main sticking point has revolved around Netanyahu himself.

"Israeli politics is very personalized and the partners of Benny Gantz are not willing to operate with Netanyahu personally and therefore there is no real future I believe in unity government if the parties will stay as they are now," said Yedidia Stern of the non-partisan Israel Democracy Institute. "Israel is entering now an unknown territory from a political point of view, a constitutional point of view ... nobody knows what will happen."

With files from Reuters