US President Donald Trump said he believes Saudi Arabia's explanation that journalist Jamal Khashoggi died during a fight inside the country's consulate in Turkey is credible.

Key points: Turkey questions Saudi consulate employees over Khashoggi disappearance

Turkey questions Saudi consulate employees over Khashoggi disappearance Trump and Turkey deny audio of alleged murder was shared with US

Trump and Turkey deny audio of alleged murder was shared with US King intervenes as case puts strain on international relations

The findings of a preliminary investigation by Saudi authorities represent the country's first admission that Khashoggi, a US resident and Washington Post columnist, is dead.

Investigators said a fight broke out between Khashoggi and people who met him inside the consulate, which led to his death.

Eighteen Saudis have been arrested in connection with the incident, according to a statement from the Saudi public prosecutor.

Speaking shortly after the report was released, Mr Trump said the Saudi admission that Khashoggi had died was a "good first step" but added that "what happened is unacceptable".

Describing Saudi Arabia as a "great ally", he said he would prefer the country to face "some form of sanction" but said he would prefer not to cancel arms deals worth more than $US100 billion, saying that to do so would threaten more than half a million jobs in the US.



Khashoggi was a critic of Saudi Arabia's Crown Prince Mohammed bin Salman.

He went missing more than two weeks ago after entering the consulate to get documentation for his wedding.

Crown Prince under scrutiny

The journalist was a critic of Saudi Crown Prince Mohammed bin Salman. ( Reuters: Hamad I Mohammed )

Saudi investigators said Saud Al-Qahtini, an adviser to the Saudi Royal court, had been sacked in the wake of Khashoggi's death.

Saudi Arabia's King Salman has also ordered the formation of a ministerial committee headed by the Crown Prince to restructure the general intelligence agency, state media said.

A Saudi official said the Crown Prince, also known as MbS, had no knowledge of the specific operation that resulted in Khashoggi's death.

"There were no orders for them to kill him or even specifically kidnap him," said the official, speaking to Reuters on condition of anonymity and adding that there was a standing order to bring critics of the kingdom back to the country.

"MbS had no knowledge of this specific operation and certainly did not order a kidnapping or murder of anybody. He will have been aware of the general instruction to tell people to come back," the official said.

The official said the whereabouts of Khashoggi's body was unclear after it was handed over to a "local cooperator" but there was no sign of it at the consulate.

The journalist's death has tarnished the Crown Prince's reputation and deepened questions about his leadership, prompting King Salman to intervene, five sources with links to the Saudi royal family told Reuters.

Prince Mohammed bin Salman has painted himself as the face of a vibrant new kingdom, diversifying its economy away from oil and introducing social changes including allowing women to drive.

Other moves have faced criticism, including involvement in Yemen's war, the arrest of women activists and a diplomatic dispute with Canada.

Khashoggi's disappearance has also strained relations between Saudi Arabia and Western allies including the US.

Mr Trump said he would speak to the Crown Prince, and added that the US needed the Saudis to counterbalance Iran.

The US President had previously said it "certainly looks" like Khashoggi was dead and that a US response would likely be "very severe".

United Nations secretary-general Antonio Guterres was "deeply troubled" by the confirmation of Khashoggi's death, a United Nations spokesman said.

The UN chief called for a "prompt, thorough, transparent" probe into the circumstances and urged full accountability for those who were involved.

US Republican Senator Lindsey Graham, who has been sharply critical of Saudi Arabia since the disappearance, said he was highly sceptical of the Saudi explanation for Khashoggi's death.

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Investigators search for traces of Khashoggi's DNA

Turkish officials believe Khashogghi was killed in the building, but Saudi Arabia has previously denied that allegation.

Turkish police searched a forest on Istanbul's outskirts and a city near the Sea of Marmara for Khashoggi's remains, two senior Turkish officials said, after tracking the routes of cars that left the consulate and the consul's residence on the day he vanished.

Investigators have recovered samples from searches of both buildings to analyse for traces of Khashoggi's DNA.

Turkey's state-run Anadolu news agency said 15 employees of the consulate were giving testimony at the Turkish prosecutor's office.

Consulate employees questioned as witnesses included accountants, technicians and a driver, Anadolu said.

Saudi Arabia previously denied allegations Khashoggi was killed in the building. ( AP: Lefteris Pitarakis )

Turkish authorities have reportedly said a 15-man Saudi hit squad travelled to Istanbul before Khashoggi's death.

Among the alleged members of the team was a doctor who trained in a Melbourne forensic institute after being sponsored by the Saudi Government.

A New York Times report, citing witnesses and other records, linked four of the suspects to Crown Prince Mohammed bin Salman's security detail.

A pro-Government newspaper in Turkey published what it said were details of an audio recording of what went on inside the consulate.

It said Khashoggi's fingers were chopped off during an interrogation, before he was beheaded and dismembered.

Sorry, this video has expired Turkish media publishes vision of alleged Saudi "assassination squad"

Australia joins boycott of Saudi economic forum

Meanwhile, Australia is boycotting a major economic forum to be held in Saudi Arabia in response to the killing of Khashoggi.

Australia was sending representatives to the Future Investment Initiative in Riyadh, otherwise known as Davos in the Desert.

But it is now joining the United Kingdom and the United States in pulling out of the event.

Foreign Minister Marise Payne said it was no longer appropriate for Australia to attend, and urged Saudi authorities to conduct a thorough investigation into Khashoggi's death.

ABC/Reuters