Trump said in a CBS interview on Saturday that there would be "severe punishment" for Saudi Arabia if it turns out that Khashoggi was killed in the Saudi consulate in Istanbul. That prompted a pugnacious Saudi response on Sunday: "The kingdom also affirms that if it is [targeted by] any action, it will respond with greater action".
News reports about orders to kill Khashoggi "are lies and baseless allegations", the minister said in a statement carried by the Saudi Press Agency (SPA).
Jamal Khashoggi, a well-known journalist and critic of the Saudi government, has not been seen since he attended Saudi Arabia's consulate in Istanbul last week.
The Saudi stock market lost $US33 billion of its value on Sunday amid investor worries about deteriorating worldwide relations, one of the first signs of the economic pain that Riyadh could suffer over the affair.
On Tuesday, Turkish Foreign Ministry spokesman Hami Aksoy said Saudi authorities notified Ankara that they were "open to cooperation" and would allow the consulate building to be searched. "It felt very insensitive and it's something that we shouldn't really be getting involved with, so we thought we're going to stay away from that".
The UK and USA are considering boycotting a Saudi-backed conference set to take place later this month in Riyadh as a result of the disappearence and alleged murder of journalist Jamal Khashoggi, the BBC has reported.
He warned that that if it turns out that Saudi authorities are behind all this, the U.S. would inflict "severe punishment" on them.
The young crown prince is behind a massive $110 arms agreement with the USA under Trump, which will bring jobs and money into the country as the president seeks job growth and a boost for the economy.
A growing number of business figures and companies have said they will boycott an important investor conference in Saudi Arabia later this month in reaction to Khashoggi's disappearance.
The index had already dropped 3.0 percent on Thursday, following a rout on world stock markets fuelled by worries about higher interest rates and US President Donald Trump's attacks on the Federal Reserve.
Reports say that the U.S. and Britain are considering boycotting a major global conference in Saudi Arabia after the disappearance.
CCTV VIA HURRIYET / ASSOCIATED PRESS A surveillance video obtained by the Turkish newspaper Hurriyet and made available on October 9 shows a man believed to be Khashoggi entering the Saudi Consulate in Istanbul on October 2.
Khashoggi was last seen October 2 entering the Saudi consulate in Istanbul to handle paperwork needed for his planned marriage.
"If they don't buy it from us, they're going to buy it from Russian Federation or they're going to buy it from China", he said. This time, however, it acknowledged for the first time that Saudi Arabia was accused of killing Khashoggi.
"Our first hope was that he was not killed but maybe that's not looking too good from what we hear but there's a lot to learn, there really is", Trump said at the White House while welcoming back American pastor Andrew Brunson, freed after almost two years of detention in Turkey. That treaty includes a Saudi intent to purchase $110 billion in arms from the U.S. American lawmakers have threated sanctions against the Saudis, and Germany, France and Britain jointly called today for a "credible investigation" into Mr Khashoggi's disappearance.