Hi Tuvya,
The best answer would be:
"My friends suggested to me that I talk with him"
Although in this sentence "me" is an indirect form, it normally takes the preposition 'to'. Simply adding 'to' before 'me' in the first sentence would also make it usable... albeit a bit clumsy.
Also, in most cases, we talk 'with' somebody. In the cases where we would talk 'to' somebody, it would imply we are giving information or are providing some kind of service. Generally when we are sharing information with a third party, we 'talk with them'.
Hope this helps.