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(Reuters) - Prime Minister Benjamin Netanyahu, under police investigation for suspected corruption, was caught on tape negotiating mutual benefits with an arch-foe, the owner of one of Israel's largest- selling newspapers, Israeli media reported on Sunday.
The report, which Israeli media outlets described as "an earthquake" that could have implications for Netanyahu's political future, drew no immediate comment from the prime minister or Yedioth Ahronoth daily owner Noni Mozes.
Channel Two television said the right-wing leader had offered to limit the circulation of Israel Hayom, a free, pro-Netanyahu daily owned and published by U.S. billionaire and Republican party donor Sheldon Adelson, if Mozes' Yedioth Ahronoth gave the prime minister more favourable coverage.
Steps to cut Israel Hayom's market-leading circulation could have financial benefits for Mozes, whose newspaper's advertising revenues have been hit by its free competitor.
It was unclear exactly when the reported conversation took place. The Haaretz daily said it occurred several months ago.
Netanyahu last week was twice questioned by police in two different cases. The first involved receiving gifts, including expensive cigars and champagne from businessmen, police and the Justice Ministry said. Netanyahu's lawyer said such presents from friends were not illegal.
Authorities have not released any details publicly about the second case, reported by Channel 2.
That Netanyahu and Mozes would have a dialogue was greeted with close to astonishment by the Israeli media. Netanyahu has openly accused Mozes and Yedioth Ahronoth newspaper of trying to overthrow his leadership through skewed coverage, an allegation they deny.
On Sunday, Netanyahu again pointed the finger at the media and said he was being personally hounded.
"This is wrong, incessant pressure from the media on law enforcement. They release balloons and the hot air comes out of them time after time. That will be the case here too," Netanyahu told Likud ministers before Channel 2 broadcast its report.
Mozes could not be reached for comment by Reuters. Yedioth Ahronoth did not immediately respond to Reuters' requests for comment on the report. Netanyahu's spokesman did not respond to requests for comment.
In the past few weeks Netanyahu has lashed out at journalists who have published critical reports about his administration and his alleged ties with wealthy businessmen.
Israeli media have reported that in the first case, police questioned Netanyahu about receiving gifts from Israeli Hollywood producer Arnon Milchan over the past few years.
A spokeswoman for Milchan's lawyer in Israel did not immediately respond to requests for comment.
Netanyahu, 67, will become Israel's longest-serving leader if he stays in office until the end of next year.
He and his wife Sara have weathered several scandals over the years, including investigations into the misuse of state funds. They have denied any wrongdoing.
Israeli commentators have pointed out that previous Israeli leaders have also been investigated over suspected corruption, with indictments not always forthcoming.
Ehud Olmert, who held office from 2006 to 2009, is currently serving 18 months in prison after being convicted of breach of trust and bribery in 2014.
Editing by Jeffrey Heller and Stephen Powell