JERUSALEM (AP) _ Israel's parliament on Wednesday rejected opposition demands for a state inquiry into the influence peddling scandal that has shaken Prime Minister Benjamin Netanyahu's government.

The Labor Party called for a parliamentary investigation after the state prosecutor decided to reject police recommendations that Netanyahu and two top aides be indicted in the scandal.

Attorney General Elyakim Rubinstein announced April 20 he was not indicting Netanyahu because of insufficient evidence, although he said Netanyahu's actions raised disturbing questions.

Rubinstein's decision drew widespread criticism, especially from Sephardic Jews, most of whom originally hail from the Middle East. They claimed that the only politician charged in the case, Aryeh Deri, was being singled out because of his Morrocan background.

Others maintained the prosecutor was too easy on Netanyahu and noted the cases against Deri and Netanyahu were based on the same testimony _ from Deri's former attorney, Dan Avi-Yitzhak.

After Wednesday's parliamentary vote, one deputy minister in Netanyahu's government handed in his resignation to protest the scandal.

Deputy Finance Minister David Magen said he would try to convince other members of Netanyahu's coalition to bring down the government and call early elections. ``I care what happens in this country,'' Magen told Channel 2 TV.

The scandal revolved around Netanyahu's appointment in January of a political ally, Roni Bar-On, as attorney general. In a deal reported by Israel TV, Deri demanded the appointment in return for political support: Bar-On would end Deri's ongoing trial on corruption charges, and Netanyahu would get crucial Cabinet votes for a troop withdrawal from the West Bank city of Hebron. Bar-On, widely seen as unqualified, resigned after one day.

During parliamentary debate Wednesday, Labor Party lawmaker Moshe Shahal argued the prime minister ``is not an ordinary citizen. He cannot be found innocent due to doubt.''

Lawmaker Yossi Sarid of the dovish Meretz Party said the Bar-On appointment ``was part of a big plan to turn the Justice Ministry into a rubber stamp.''

Replying for the government, Communications Minister Limor Livnat accused the opposition of being motivated by a desire to topple the government.

``The moment the conclusions of the attorney general and the state attorney did not please the opposition for political reasons, they began to propose all sorts of devices such as a state commission of inquiry.''

The Meretz Party has petitioned the Supreme Court to force Rubinstein to prosecute Netanyahu and Justice Minister Tsahi Hanegbi. The petition is to be considered by next week.