Canadian Prime Minister Justin Trudeau has said he wants to improve relations with Saudi Arabia, amid an escalating diplomatic dispute between the two countries.

After Riyadh ordered it students studying in Canada to come home and expelled Canada's ambassador for interfering in its domestic affairs, the Financial Times said the Saudi central bank had told companies managing its assets abroad to start selling Canadian stocks and bonds.

Mr Trudeau told reporters in Montreal that Canadian foreign minister Chrystia Freeland had held talks with her Saudi counterpart.

He said: "Diplomatic talks continue ... we don't want to have poor relations with Saudi Arabia. It is a country that has great significance in the world, that is making progress in the area of human rights.

"But we will continue underscoring challenges where and when they exist, in Saudi Arabia and elsewhere".


Saudi Arabian foreign minister Adel al-Jubeir, who had been angered by Canada's call for the release of a women's rights activist last week, said there was no room for mediation.

"There is nothing to mediate. A mistake has been made and a mistake should be corrected," Mr al-Jubeir told a news conference in Riyadh.

On Friday, Mrs Freeland called for the release of Samar Badawi, the sister of Raif Badawi - a prominent rights campaigner who has been sentenced to 10 years in prison for "insulting" Islam.

Samar Badawi and activist Nassima al Sadah, who had campaigned for women's right to drive, were arrested last month.

More than a dozen women's rights activists have been targeted since May.

A number of prominent journalists, religious leaders and activists have been arrested despite reforms introduced by Crown Prince Mohammed bin Salman to open up society and the economy.

Since rising to power in 2015, Prince Salman has blockaded Saudi Arabia's neighbour Qatar, led a military intervention in Yemen and increased tensions with Iran.

Despite ending new trade and investment with Ottawa, Saudi Arabia said it would continue to deliver oil.

Saudi energy minister Khalid al-Falih said: "The current diplomatic crisis between Saudi Arabia and Canada will not, in any way, impact Saudi Aramco's relations with its customers in Canada."

But the country's state-owned airline has suspended flights to Toronto.

According to Reuters, Saudi Arabia's main state wheat-buying agency told grains exporters it will no longer accept Canadian-origin grains in international tenders.

Saudi Arabia is Canada's biggest trade partner in the Gulf region. Bilateral trade between the two nations exceeded $4bn last year, with Canadian exports to Saudi Arabia totalling $1.2bn in 2017.