A police spokeswoman said the suspected crimes included fraud, breach of trust and money laundering.
Police did not name the officials involved but Deputy Interior Minister Faina Kirshenbaum confirmed that she had been called in for questioning.
She denied any wrongdoing, telling Channel 2 TV that she had "no clue what the investigation is about".
Ms Kirshenbaum belongs to Foreign Minister Avigdor Lieberman's Yisrael Beteinu party.
In a statement, the party said it was being deliberately targeted ahead of the general election set for 17 March.
"We are certain of the innocence of those [suspected of wrongdoing]... and after the noise and media fervour dissipates, it will be found that there is nothing to support these publications apart from an effort to harm [the party], and it will fail," the statement said.
Police chief Yohanan Danino said the investigation had been going on for a year.
"The transition to an overt probe is a result of a consideration of the evidence and the readiness to make matters public," he said.
Police searched the homes and offices of suspects and confiscated computers and documents, Israeli newspaper Haaretz reported.
The March election - two years ahead of schedule - was announced this month after Prime Minister Benjamin Netanyahu sacked two senior coalition partners in his cabinet, accusing them of plotting against him.
The coalition has been fraught with tension, with ministers publically criticising Mr Netanyahu on a number of issues.
Israeli police say they are investigating at least 30 public officials over alleged corruption.