Authorities allege Netanyahu awarded regulatory favors to Israel's leading telecommunications company, Bezeq Telecom Israel (BEZQ.TA), in return for more positive coverage of him and his wife on a news website, Walla, owned by the company.
Police in February recommended indicting Mr Netanyahu in two other corruption investigations.
Police recommended that charges also be brought against Elovitch and his wife.
He argued in a statement that "these recommendations were determined and leaked even before the investigations began".
"I am certain that the authorized officials, after considering the matters, will reach the same conclusion in this case as well - that there was nothing because there is nothing", Netanyahu further said on Sunday.
The police's recommendation has triggered calls for Netanyahu to resign immediately.
The prime minister has argued that he is the victim of a left-wing and media conspiracy to topple his conservative government.
Mr Netanyahu rejected the allegations in what is known as Case 4000.
In return, Bezeq's subsidiary news site, Walla, allegedly provided positive Netanyahu coverage.
Police said they have established an evidentiary foundation to charge the pair with accepting bribes, fraud and breach of trust.
Two senior advisers have turned state witnesses and have allegedly provided authorities with incriminating evidence.
Investigators say Netanyahu advanced regulatory benefits worth up to 1 billion shekels (approximately $280 million) to Shaul Elovitch, the controlling shareholder of Bezeq, and Netanyahu's friend. Netanyahu held the government's communications portfolio until past year and oversaw regulation in the field.
This is the third such police recommendation against Netanyahu in recent months.
The three cases involving the long-serving premier have led to speculation over whether he will eventually have to step down. Other former employees have accused her of mistreatment, charges the Netanyahus have vehemently denied, and of excessive spending and charging the state for her private, expensive tastes.
Mr Netanyahu did not mention the allegations in his comments at the start of a cabinet meeting later in the day.
Other opposition parties quickly joined in the call for Mr Netanyahu to resign.
Police are also recommending that charges be brought against Netanyahu's wife, Sara, who has been at the centre of much of the corruption allegations surrounding the longtime Israeli leader.