The wife of Israeli Prime Minister Benjamin Netanyahu asked a Jerusalem court on Sunday to approve a plea bargain convicting her of fraudulently using state funds for meals, an AFP reporter said.

Under the charges in an amended indictment, Sara Netanyahu would plead guilty to exploiting the mistake of another person and pay a fine along with compensation, but graft charges against her would be dropped.

In a small room at the Jerusalem magistrates' court, packed with journalists, Netanyahu told the judge she was aware of the charges. Her lawyer and a prosecutor asked justice Avital Chen to accept the deal.

"As in every plea bargain, each side makes concessions, sometimes hard concessions," prosecutor Erez Padan said.

"It is right and proper for the public interest to bring this case to an end."

The justice ministry said that under the deal, Netanyahu would be fined 10,000 shekels ($2,800) and reimburse the state a further 45,000 shekels.

Netanyahu's attorney Yossi Cohen told the court his client had already been heavily punished by the media.

"Four years of ugly leaks and denigrations" constituted "inhuman punishment", he said.

"No other person could have withstood this, this lady is made of steel," Cohen added.

The first lady was initially charged in June 2018 with fraud and breach of trust for allegedly misusing state funds to pay for catered meals costing $100,000, by falsely declaring there were no cooks available at the prime minister's official residence.

The 60-year-old has been a high-profile presence at her husband's side throughout his long tenure in office.

She has also faced accusations of mistreating staff. In 2016 a court awarded some $47,000 in damages to a former housekeeper who accused the couple of repeated workplace abuse.

Separately, Benjamin Netanyahu is facing possible indictment for bribery, fraud and breach of trust in the months ahead.

He is reportedly seeking legislation that would result in him being granted immunity.

He is up for re-election again in September 17 polls, the second to be held this year after he was unable to form a coalition following an April vote.