A watchdog group asked Israel's top court on Sunday to order Prime Minister Benjamin Netanyahu to step aside after his indictment on corruption charges, adding to pressure he is facing from within his ruling party.

Netanyahu, a four-term conservative leader, has denied the charges of bribery, fraud and breach of trust and said he will stay in office and defend himself.

His indictment on Thursday came amid unprecedented political disarray in Israel, after elections in April and September in which neither Netanyahu nor his main challenger, centrist Benny Gantz, secured a governing majority in parliament.

In its petition to the Supreme Court, the Movement for Quality Government in Israel said the first-ever criminal charges against a sitting Israeli prime minister constituted "the crossing of a red line and a grave blow to public trust in ruling institutions."

The court should force Netanyahu to resign or temporarily recuse himself from prime ministerial duties, the movement said. It was not immediately clear when the court might rule on the petition.

Gantz's mandate to form a government - after an unsuccessful attempt by Netanyahu to do so - expired on Wednesday. The next day, Israel's president declared a three-week period in which lawmakers can nominate one of their own to try to put together a ruling coalition.

Should that fail, a new election – Israel's third in a year - will be triggered.

Netanyahu's hope of securing that parliamentary nomination was challenged by Gideon Saar, a rival within his Likud party.

Saar said on Saturday Netanyahu would not able to win a third election and called on Likud to hold a leadership ballot.

"There is only one way in which we can save the country, extricate it from the crisis and ensure the Likud's continued rule - and that is if we go to snap primaries today, within these 21 days," Saar told Israel's Channel 12 television. Saar has previously said he would consider running for the top Likud slot.

While voicing appreciation for Netanyahu's record-long term and noting he was innocent until proven otherwise, Saar criticized the premier's attempts to cast his criminal prosecution as a "coup attempt" involving police, prosecutors and the media.

"Not only is it wrong to say that, it's also irresponsible to say that. It's completely out of touch," Saar said.

The Likud party spokesman dismissed the challenge.

"It is sad to see that while Prime Minister Netanyahu keeps Israel safe on all fronts and works to preserve Likud rule, Gideon Saar, as is his wont, is displaying zero loyalty and maximum subversion," the spokesman said.

Opening the weekly cabinet meeting on Sunday, Netanyahu made no mention of the political crisis or his legal woes, speaking about Israeli security issues.