Saudi Threatens To Hit Back Against Sanctions Over Khashoggi Case

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US President Donald Trump has vowed "severe punishment" if proof of Saudi involvement in Khashoggi's disappearance is found.

The Saudi stock market fell as much as 7 percent in early trade on Sunday, one of the first signs of economic pain Riyadh could suffer over the affair.

Already, worldwide business leaders are pulling out of the kingdom's upcoming investment forum, a high-profile event known as "Davos in the Desert", and the sell-off on Riyadh's Tadawul stock exchange showed that investors are uneasy.

"Been hearing the ridiculous "rogue killers" theory was where the Saudis would go with this", Democratic U.S. Senator Chris Murphy said on Twitter.

Turkish officials suspect that Khashoggi, who hasn't been seen since entering the Saudi Consulate in Istanbul last week, was murdered by Saudi agents.

"The Kingdom affirms its total rejection of any threats and attempts to undermine it, whether by threatening to impose economic sanctions, using political pressures, or repeating false accusations that will not undermine the Kingdom and its staunch positions and Arab, Islamic and global status, the outcome of these weak endeavours, like their predecessors, is a demise", the country's press agency said, citing an "official source".

The statement did not elaborate.

Sheikh Abdullah reiterated the UAE's unequivocal stance with Saudi Arabia in whatever policies it sets and tremendous efforts it exerts to counter the various risks and threats besetting the worldwide community, particularly extremism and terrorism.

Rubio declined to rule out a halt to the arms sales, stressing that the USA must send a message to repressive governments worldwide, from Russian Federation to Syria and China. "The truth is that if Washington imposes sanctions on Riyadh, it will stab its own economy to death, even though it thinks that it is stabbing only Riyadh!" he wrote.

The Saudi Embassy in Washington later tweeted what it called a clarification, thanking countries including the United States "for refraining from jumping to conclusions" over the case.

The UAE has affirmed full solidarity with Saudi Arabia against all attempts to undermine its regional stature and fundamental role in establishing regional peace and security, said a senior UAE government official. Turkey said Erdogan "stressed forming a joint working group to probe the case".

But he has said repeatedly that he does not want to halt a proposed $110 billion arms sale to Saudi Arabia - as some in Congress have said he should - because it would harm the USA economically.

The crown prince, ambitious, aggressive and just 33 in a kingdom long ruled by aging monarchs, has considerable weight in Saudi government actions. Executivesincluding JPMorgan Chase (JPM) CEO Jamie Dimon have pulled out of an investment conference taking place in the kingdom later this month. Several business leaders and media outlets have backed out of the upcoming investment conference in Riyadh, called the Future Investment Initiative.

"It's cumulative - the Yemen war, the dispute with Qatar, the tensions with Canada and Germany, the arrests of women activists".

CNN reported that the Saudis were going to admit the killing had occurred but deny the king or crown prince had ordered it.