American lawmakers have threatened tough punitive action against the Saudis, and Germany, France and Britain jointly called for a "credible investigation".
The development came after Erdogan and King Salman had their first telephone talks since the controversy erupted, in what appeared to be a conciliatory conversation according to official readouts.
Other companies and high-profile businessmen have pulled out of the three-day conference known as "Davos in the desert", which is scheduled to begin on October 23 in Riyadh. The kingdom's Tadawul All-Shares Index later clawed back some losses to close down 3.5 percent.
"The kingdom affirms its total rejection of any threats and attempts to undermine it, whether through economic sanctions, political pressure or repeating false accusations", the kingdom's statement said.
Brent crude, the benchmark for more than half the world's oil, rose as much as 1.9 percent to $81.92 a barrel, before paring gains to trade at $81.24 by 6:58 a.m.in London.
Turkish government sources said police believed Khashoggi, a former Saudi government adviser, may have been killed by a 15-man team sent especially to Istanbul.
One person familiar with the Saudi plans said on Monday that the Saudi government was preparing to describe a scenario that would protect the prince from any blame.
"The kingdom also affirms that if it is [targeted by] any action, it will respond with greater action".
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 US economically.
A Gulf banker said the Khashoggi case, combined with other events, had become a significant factor for some potential investors.
The kingdom has called the allegations "baseless" but has offered no evidence the writer left the consulate.
Earlier this month, Trump suggested Saudi Arabia's king "might not be there for two weeks" without US military support. The CEOs of both corporations cited the uncertainty related to the recent disappearance of a Saudi dissident in Istanbul, Turkey, and concerns that the Trump administration may take diplomatic action against the kingdom.
Similar campaigns have been trending on social media in Saudi Arabia and the UAE, although there has been no official backing so far.
They include the CEO of Uber, a company in which Saudi Arabia has invested billions of dollars; billionaire Richard Branson; JPMorgan Chase & Co.
Those policies are all seen as initiatives of the crown prince, who has also presided over a roundup of activists and businessmen.
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