WASHINGTON — President Donald Trump said on Thursday he now believes journalist Jamal Khashoggi is dead and warned of "very severe" consequences should Saudi Arabia be proven responsible.

"It certainly looks that way to me. It’s very sad," Trump told journalists when asked if he believed that Khashoggi, who disappeared more than two weeks ago, is no longer alive.

Asked about the potential US response to Saudi Arabia, which is accused of murdering the Washington Post columnist and critic of the Saudi regime, Trump said: "It will have to be very severe. It’s bad, bad stuff."

This marked a hardening of tone from the Trump administration, which has been reluctant to blame ally Saudi Arabia, despite mounting evidence that the kingdom’s agents killed and dismembered Khashoggi inside its consulate in Istanbul more than two weeks ago.

A former regime insider, Khashoggi had become a critic of powerful Crown Prince Mohammed bin Salman, the point man in ever-tightening military and commercial relations between the petro-state and the Trump administration.

Just hours earlier, Secretary of State Mike Pompeo said he had told Trump the Saudis should be given "a few more days to complete" an investigation.

Only then, Pompeo said, "we can make decisions how or if the US should respond."

In a possible sign of how the Saudis will seek to defuse the diplomatic crisis, The New York Times reported that the country’s rulers could come out and blame General Ahmed al-Assiri, a top intelligence official close to the crown prince.

Market takes a hit

The furor has also blown a hole in next week’s Future Investment Initiative conference in Riyadh, which was meant to showcase Prince Mohammed’s plans for modernising the desert kingdom.

US Treasury Secretary Steven Mnuchin said he was pulling out, joining senior ministers from Britain, France and the Netherlands, as well as a string of corporate leaders.

Mnuchin’s announcement on Twitter helped push down stock prices on Wall Street.

His withdrawal "raises worry that the administration is being pushed to take a harder line against Saudi Arabia over the Khashoggi murder and there could be retaliation," said Karl Haeling of LBBW.

Responses from Saudi Arabia could include selling US Treasuries, or punishing US companies seeking business in the kingdom, Haeling said.

Most analysts don’t think Saudi Arabia would cut off oil supplies.

Russian President Vladimir Putin, meanwhile, took a dig at Washington, saying that "the US holds a certain responsibility over what happened to him."

But he said Moscow would not "start deteriorating relations" with Saudi Arabia as long as "it did not know what really happened."

Gory details

Neither Turkey nor the US has publicly confirmed that Khashoggi is dead or said officially that Riyadh is to blame.

But a steady stream of unconfirmed leaks from officials to Turkish media have painted a detailed and horrifying picture of Khashoggi’s last minutes, allegedly at the hands of 15 Saudi agents waiting for him when he came to the consulate for paperwork. — AFP