The UK Foreign Office has said it is considering its “next steps” after Saudi Arabia said the journalist Jamal Khashoggi was killed in a fight at its consulate in Turkey.

Saudi Arabia said Khashoggi, who disappeared after visiting the consulate in Istanbul on 2 October, died in a “fistfight” with Saudi officials. The announcement, which cited preliminary findings from an official investigation, was made on state television on Friday.

A Foreign Office spokesman said: “We send our condolences to Jamal Khashoggi’s family after this confirmation of his death. We are considering the Saudi report and our next steps. As the foreign secretary has said, this was a terrible act and those responsible must be held to account.”

Jamal Khashoggi, outside the Royal Courts of Justice in London. Photograph: Johnny Green/PA

Labour and the Liberal Democrats have urged Britain to take steps to suspend arms sales to the kingdom. The Lib Dem leader, Vince Cable, said Britain’s heavy reliance on the Saudis for arms sales was “embarrassingly compromising in these circumstances”.

The shadow international trade secretary, Barry Gardiner, told BBC Radio 4’s Today programme: “What we would do certainly at the moment, and I think the government should do this, is to suspend all arms sales to the kingdom.”

Gardiner acknowledged there were a “lot of jobs” in the UK linked to the defence trade but said: “This is about who we are as a country.”

He added: “We have a thriving defence industry and, of course, this would be a hit to that industry.”

Khashoggi, a critic of the Saudi crown prince, went missing after entering the consulate to obtain documents for his upcoming marriage. Days later, Turkish officials said they believed he had been killed in the building – an allegation that Saudi Arabia initially strenuously denied.

On Friday Donald Trump said Saudi Arabia’s account of the circumstances of Khashoggi’s death was credible and a “good first step” but said what had happened was “unacceptable”.