By Jeffrey Heller and Dan Williams
JERUSALEM (Reuters) - Prime Minister Benjamin Netanyahu was charged with bribery, breach of trust and fraud on Thursday, a criminal indictment that plunged Israel deeper into political disarray.
The decision announced by Attorney General Avichai Mandelblit was the first of its kind against a serving Israeli prime minister and represented the gravest crisis in the political career of the man popularly known as "Bibi".
Netanyahu, in power since 2009, has dominated Israeli politics for a generation and is the country's longest-serving leader. He has denied wrongdoing in three corruption cases, saying he is the victim of a political witch hunt.
The indictment posed no immediate threat to Netanyahu's decade-long hold on power, a grip loosened by elections in April and September in which neither the right-wing Likud leader nor centrist challenger Benny Gantz secured a governing majority.
Netanyahu remains caretaker prime minister and is under no legal obligation to resign once charged. The opening of a trial could be delayed for months by a possible new election and any moves by Netanyahu to secure parliamentary immunity from prosecution.
"This is a difficult and sad day," Mandelblit said, announcing the indictment in a televised statement.
Mandelblit, who was appointed to his post by Netanyahu, said he had a duty to Israel's citizens to ensure that no one was above the law.
Netanyahu, 70, was due to make a statement from his official residence at 1830 GMT.
CASES 1000, 2000 AND 4000
Police recommended in February that Mandelblit file criminal charges against Netanyahu in the long-running investigations dubbed Cases 1000, 2000 and 4000.
Netanyahu is suspected of wrongfully accepting $264,000 worth of gifts from tycoons and of allegedly dispensing favours in return for favourable stories about him in Israel's biggest selling newspaper, Yedioth Ahronoth, and the Walla website.
Case 4000, the most serious of the three, alleges that Netanyahu granted regulatory favours worth about 1.8 billion shekels (about $500 million) to Israel's leading telecommunications company, Bezeq Telecom Israel <BEZQ.TA>.
In return, Mandelblit said, Netanyahu and his wife often received positive coverage on the Walla site, which is owned by Bezeq's former chairman, Shaul Elovitch.
He indicted Netanyahu on charges of breach of trust and fraud in all three corruption cases against him, as well as bribery in Case 4000.
Netanyahu could face up to 10 years in prison if convicted of bribery and a maximum 3-year term for fraud and breach of trust.
Earlier, during one of the most unusual days in Israeli political history, the country's president told lawmakers to name a candidate to form a new government after Netanyahu and Gantz both failed, a development that probably sets the stage for a third election within a year.
ADVERTISEMENT"These are harsh dark days in the annals of the State of Israel," President Reuven Rivlin said as he announced that Gantz had not mustered enough support for a stable coalition.
The prolonged political stalemate comes at a tricky time for Israel and its most prominent statesman on the domestic and international fronts.
Its conflict with arch-foe Iran has deepened - Israeli warplanes hit Iranian targets in Syria on Wednesday after rockets were fired toward Israel - while fighting with Palestinian militants in Gaza flared last week.
The introduction of criminal charges could further complicate the eventual rollout of the U.S. administration's long-delayed Middle East peace plan by imperilling the political future of one of the key players whose support is needed.
And if a new Israeli election is in the cards, Netanyahu would be running as an indicted suspect, displaying a rare vulnerability that could entice potential challengers within his own party to make a move against a weakened prime minister.
ADVERTISEMENTPalestinians greeted the news with grim pleasure. Palestine Liberation Organization official Wasel Abu Youssef said that for years Netanyahu had sought to avoid this outcome by "launching wars against the Palestinian people" to boost his domestic popularity.
(Editing by Stephen Farrell and Giles Elgood)