Former Israeli prime minister Benjamin Netanyahu on Monday denied reports he had reached a deal with prosecutors that would force him to quit politics, and vowed to remain leader of his Likud party.

Netanyahu, who served as prime minister from 2009 to until last year, is on trial for bribery, fraud and breach of trust, allegations he has denied.

His legal team has been negotiating a plea deal with Israel's attorney general that, according to Israeli media reports, included an admission to the offence of "moral turpitude," which would have carried a mandatory seven-year ban from politics.

"In recent days, false claims have been published in the media about things I allegedly agreed to, for instance the claim I agreed to moral turpitude. That is simply incorrect," Netanyahu said in a statement.

Former Israeli prime minister Benjamin Netanyahu (C) is flanked by lawyers before testimony by star witness Nir Hefetz, a former aide, during his corruption trial in east Jerusalem, on November 22, 2021
Former Israeli prime minister Benjamin Netanyahu (C) is flanked by lawyers before testimony by star witness Nir Hefetz, a former aide, during his corruption trial in east Jerusalem, on November 22, 2021 POOL via AFP / Maya Alleruzzo

"I will continue to lead Likud," he added in comments that may dampen speculation about his potential looming exit from the political stage.

Netanyahu, currently the opposition leader in parliament, is accused of accepting improper gifts and seeking to trade regulatory favours with media moguls in exchange for favourable coverage.

His trial is expected to last several more months. An appeal process, if necessary, could take years.

The coalition government that ousted him in June, led by Prime Minister Naftali Bennett, was largely forged through common antipathy towards Netanyahu among a group of ideologically disparate parties.

Political experts have said that Netanyahu's departure from politics, and right-wing Likud's election of a less controversial leader, could spell trouble for the coalition, as it would struggle to hold together in the absence of its main unifying force.