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An investigation by the Israeli police into Netanyahu revealed a conversation between the Israeli premier and media tycoon Arnon Mozes where the two can he heard hammering out a deal.

Police spokeswoman Luba Samri declined to comment, citing a police policy not to divulge information about ongoing questionings.

"We confirm that the prime minister was questioned today for several hours at his Jerusalem residence", the Hebrew language statement said adding, that the interrogation was carried out by detectives of national fraud and serious crimes squad.

"There won't be anything because there wasn't anything", he wrote on Twitter after Thursday's questioning.

The alleged deal, believed to have not been finalised, would have meant Netanyahu getting positive coverage in return for helping curb Yediot's competitor, the pro-Netanyahu freesheet Israel Hayom.

According to Army Radio, Netanyahu is expected to be confronted during the investigation with testimony from Ari Harrow, his former aide who has turned state's witness.

Netanyahu has consistently denied any wrongdoing and says he has been the target of a campaign by political opponents.

In a television interview on Thursday evening, Netanyahu's lawyer, Jacob Weinroth, insisted his client was honest but had a weakness for wealthy people. Milchan is a shareholder of Channel 10 News, Channel 2 reported.

In a step that seems a retaliation, Israeli legislators close to Netanyahu caused chaos as they announced their will to demand a salary raise for Netanyahu and a salary drop for head of Israeli police Roni Alsheikh who insists on interrogating Netanyahu. Previous year the Israeli primer was dogged by a similar scandal.