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JERUSALEM — Israel is facing a political upheaval in the wake of a recommendation by police investigators that Prime Minister Benjamin Netanyahu be charged with fraud and breach of public trust in connection with the Bar-On Affair.

On Wednesday, Public Security Minister Avigdor Kahalani confirmed an Israel Television report that the police had made the recommendation in a 995-page document. It had been submitted a day earlier to State Prosecutor Edna Arbel.

Netanyahu's attorney, Ya'acov Weinroth, also confirmed the police action, but he maintained that the charge was "baseless."

Arbel was reviewing the police report and was expected to decide by the start of Passover Monday evening whether to charge Netanyahu or any other senior government officials, or only to issue a report critical of their behavior.

Even if Arbel decides not to seek prosecution, political observers were saying the police recommendations may well have dealt a death blow to the Netanyahu government.

They said not seeking prosecution would mean there was not enough evidence against Netanyahu to present in court. Nonetheless, the political reverberations from the police report would have a disastrous effect on the premier's ability to govern, they added.

Israeli media reported that Netanyahu's governing coalition could splinter as a result of the scandal.

It remained unclear, however, what effect the affair would have on the peace process, which for the past month has been marked by almost daily violence and little contact between the Israeli government and the Palestinian Authority.

Netanyahu aides, meanwhile, cautioned that it was important to wait for a decision from Arbel and Attorney General Elyakim Rubinstein.

"The one to decide on submission of indictments is the prosecution and not the police," Netanyahu spokesman Shai Bazak told Israel Television.

"These leaks from the police at every point in the past few months, including tonight, if it is true, raise suspicions that perhaps someone in the investigating team wants to influence the state attorney and attorney general's decision," Bazak added.

"I have no doubt that the prime minister will emerge clean from this."

Weinroth added: "This whole affair began with a storm and allegations of conspiracy. Now we are left with the crumbs and no proof of conspiracy."

Opposition members were quick to react to the police recommendation against Netanyahu.

Labor Party leader Shimon Peres said the possibility that criminal charges would be filed against the premier portends a "political earthquake."

Those developments, he added, put on hold any discussion on forming a national unity government — a matter that recently has drawn much speculation because of the deadlock on the Palestinian peace track.

Peres added that if the attorney general decided to issue indictments, early elections should be called. Peres has said he would refuse to join any unity government if Netanyahu were indicted.

Meretz leader Yossi Sarid said the reports only confirmed his previous statements that the prime minister would be ethically required to step down, whether or not charges were ever filed.

Under Israeli law, an indictment would not require Netanyahu — or any Knesset member — to step down.

Israeli police submitted their findings Tuesday after concluding a three-month investigation into possible influence-peddling in the January appointment of Jerusalem lawyer and Likud activist Roni Bar-On as attorney general.

Bar-On won Cabinet approval Jan. 10, but he stepped down two days later amid growing charges in political and legal spheres that he lacked the experience to hold Israel's top legal post.

Two weeks later, the Cabinet unanimously approved Rubinstein, then a district judge, to serve as Israel's attorney general.

The police investigation was launched after an Israel Television report alleged that Bar-On was appointed as part of a deal to provide a plea bargain to Shas leader Aryeh Deri, who is on trial for corruption.

In turn, Deri allegedly promised his party's support for the Hebron agreement, which was coming up for Cabinet approval at the time, the report said.

Netanyahu was among a long list of top Israeli officials who were interviewed by the police in connection with the Bar-On Affair.

Wednesday, Israel Television said that elements of Netanyahu's comments to police had led the investigators to recommend charges against him.

Arbel and Rubinstein remained in closed consultations on what action to take.

Israeli news reports earlier this week said police had recommended that charges also be filed against other top officials: Deri, for allegedly pushing for Bar-On's appointment; Justice Minister Tzachi Hanegbi, for misleading Cabinet members about Bar-On's qualifications for the job; and Avigdor Lieberman, the director-general of the Prime Minister's Office, for allegedly serving as a "pipeline" between Deri and Netanyahu.

U.S. officials, meanwhile, were hesitant to comment.

This is an "internal matter involving the Israeli government," said Samuel Berger, national security adviser. "I don't think it is appropriate for me to comment."

U.S.-led efforts to revive the stalled peace process went ahead midweek even as the Netanyahu government faced a downhill spiral. Mideast mediator Dennis Ross headed to the region, as Foreign Minister David Levy met with Arafat in Malta on Wednesday.

With Netanyahu signalling that he was willing to make new concessions to the Palestinians, Arafat said he welcomed more such meetings.