A Tel Aviv Magistrate's Court ordered Igal Sarna to pay the couple some $32,500 in damages over what it said was his unproven account in a Facebook post last year.
Netanyahu testified at the trial that the alleged incident, which Sarna said he learned about from an acquaintance citing one of the prime minister's security guards, never took place.
"He crossed the line," Netanyahu said of Sarna, who writes for the mass circulation Yedioth Ahronoth, a newspaper often critical of the Israeli leader. "It's a gross lie, absurd."
Netanyahu and his wife have a stormy relationship with the Israeli media. In January, he described the media as "left-wing" and "Bolshevik" and said they were out to bring him down.
(Reporting by Jeffrey Heller; editing by Jason Neely)
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