Authorities on Sunday alleged Netanyahu awarded regulatory favours to Bezeq, Israel's largest telecommunications group, in return for more positive coverage of him and his wife on Bezeq's subsidiary news website, Walla.
Elovitch's wife, Iris, and Netanyahu's wife, Sara, were also implicated in the case, known as Case 4000. The country's attorney general is now expected to decide the next step.
Netanyahu has said he wants his coalition to keep going until the end of its term, but politicians close to him say that given the coalition's shaky razor-thin majority, an early election is likely.
Investigators recommended that Netanyahu's wife, Sara, be indicted on bribery charges, too, but the prime minister said the couple would be cleared. "No Bibi, no investigation", he claimed was the motto of investigators, Netanyahu said, referring to himself by his nickname. "The police recommendations have no legal standing".
"I'm sure that in this case the relevant authorities, after examining the issue, will reach the same conclusion: that there was nothing because there is nothing".
Netanyahu reiterated a phrase he has used since all the investigations against him were launched more than two years ago - "that there was nothing because there is nothing".
It's up to the attorney general whether to indict.
It's the third such recommendation to hit the prime minister this year.
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Bezeq telecom company's controlling shareholder Shaul Elovitch, seen here in a Tel Aviv courtroom on February 22, 2018, is suspected of involvement in a scandal in which Israeli Prime Minister Benjamin Netanyahu allegedly advanced regulatory decisions as communications minister that benefited Bezeq, in exchange for positive coverage on the company's Walla news site.
The prime minister insists that he and his wife have done nothing wrong or illegal and that he intends to remain in office.
"Netanyahu and his associates intervened in a blatant and ongoing manner, sometimes even daily, in the content published by the Walla News website and sought to influence the appointment of senior employees (editors and reporters)", police said.
While Netanyahu was questioned as a witness and not a suspect in the submarine case, the accusations against his lawyer and others in the investigation have only added to the pressure the prime minister is facing.
The police's recommendation has triggered calls for Netanyahu to resign immediately. The people of Israel deserve a clean leadership. "Every day he continues in his position harm to the citizens of this country".
Police are also recommending charges be brought against Elovitch and members of his family.
Netanyahu is suspected of having received luxury gifts from businessmen overseas in Case 1000.