Benjamin Netanyahu's indictment on corruption charges prompted speculation Friday that the end of his decade-long tenure was nigh, though several key allies expressed support for the beleaguered Israeli premier.

The Jewish state woke up to an indicted sitting prime minister for the first time, after the attorney general announced late Thursday he had charged the 70-year-old with bribery, fraud and breach of trust.

After months of speculation Avichai Mandelblit's decision was the worst possible outcome for Netanyahu, hitting him with the most serious charges.

Israel's longest-serving premier swiftly hit back, vowing to fight on and accusing the police and legal system of bias against the right-wing in an often angry speech.

Any trial is likely to be months away, and -- if Netanyahu is found guilty -- a final conviction exhausting appeals could take years.

In a video statement posted online Friday Netanyahu said he would abide by any ruling.

"We will accept the decisions of the court, there is no doubt about that" and "we will act in accordance with the rule of law," he said.

Netanyahu's political authority is now under more intense scrutiny than ever.

Israel has been without a functioning government for nearly a year, with Netanyahu, nicknamed 'King Bibi', staying on as interim premier after two inconclusive elections in April and September.

Israeli Prime Minister Benjamin Netanyahu was hit with multiple charges late Thursday
Israeli Prime Minister Benjamin Netanyahu was hit with multiple charges late Thursday AFP / GALI TIBBON

Parliament now has less than three weeks to find a candidate who can gain the support of more than half of the 120 lawmakers, or a deeply unpopular third election will be called.

Columnist Amit Segal, writing in the Yediot Ahronot daily, said Mandelblit had ended any chance of Netanyahu reaching the threshold.

"The prime minister's political situation is painfully clear: his chances of reaching 61 seats are almost non-existent."

Netanyahu's centrist rival Benny Gantz will now seek to encourage defections either from within the PM's Likud party or from allied right-wing parties.

But a number of the PM's key allies said they would stand by him for now, stressing that he had not yet been convicted of anything.

Among them was Education Minister Rafi Peretz, whose Jewish Home party is an ally of Netanyahu's, as well as Foreign Minister Israel Katz and Culture Minister Miri Regev from inside Likud.

Gantz, leader of the Blue and White coalition, late Thursday called on Netanyahu to step down and focus on the corruption allegations -- a scenario that would see the premier out of power for the first time in ten years.

But he appeared primed to continue fighting the charges while clinging onto office.

"What is going on here is an attempt to stage a coup against the prime minister," Netanyahu declared in a televised response to the charges.

Supporters of Israeli Prime Minister Benjamin Netanyahu demonstrate their solidarity with him outside his official residency in Jerusalem late Thursday
Supporters of Israeli Prime Minister Benjamin Netanyahu demonstrate their solidarity with him outside his official residency in Jerusalem late Thursday AFP / GALI TIBBON

In Tel Aviv Friday, around 70 anti-Netanyahu campaigners demanded that he step down, an AFP journalist said.

"The corrupted, go home, Bibi, go home," signs read.

A smaller counter demonstration chanted slogans in favour of the PM.

Under Israeli law, while ministers cannot remain in place after being indicted, a premier is not legally required to resign unless convicted and with appeals processes exhausted.

In addition to the premiership, Netanyahu holds portfolios including agriculture and health, positions he will likely have to vacate in the coming days.

The charges against him range from receiving gifts worth thousands of dollars to a deal to change regulation in favour of a media group in exchange for positive coverage.

In the most serious case, known as Case 4,000, he is alleged to have negotiated with the controlling shareholder of Israeli telecommunications giant Bezeq to secure positive coverage on the Walla! news site in exchange for policies benefiting Bezeq.

Commentators said the perennial fighter could be entering his last bout but was likely to go down swinging.

"The end is clear. The question is how bad the route getting there is going to be," Yehuda Yifrah wrote in the right-wing Makor Rishon on Friday.

A fatal blow could even come from within Likud, which has to decide whether it will back him to the end or drop him in favour of another candidate for prime minister.

Former minister Gideon Saar, who commands significant support inside Likud, has been calling for a party leadership election before any third round of elections.

"I think I will be able to unite the country," he said.

A move to replace Netanyahu as Likud leader could open the way to a potential unity government with Gantz's Blue and White.

The two men have been stuck in deadlocked talks since the last election in September.

Ofer Zalzberg, senior Middle East analyst for the International Crisis Group, pointed to "a sizeable rebellion... emerging" within Likud.

"It seems the opposition to Netanyahu within the party's senior ranks will increase in the coming days and weeks," he told AFP.