Mr Trump met with Saudi Arabia's Crown Prince Mohammed bin Salman in March. (Reuters: Jonathan Ernst)

Donald Trump promises 'severe punishment' for Saudi Arabia if it killed journalist Jamal Khashoggi

United States President Donald Trump has promised to inflict "severe punishment" on Saudi Arabia if it is found to have murdered missing journalist Jamal Khashoggi.

In an interview with US 60 Minutes, Mr Trump said the Saudis denied involvement "in every way you can imagine" when the crown prince spoke to his son-in-law Jared Kushner.

"Could it be them? Yes," Mr Trump said.

But Mr Trump told reporters at the White House the United States would be "punishing itself" by halting military sales to Saudi Arabia even if it is proven that Khashoggi was killed inside the country's consulate in Istanbul.

"I'll tell you what I don't want to do. I don't want to hurt jobs. I don't want to lose an order like that. And you know what, there are other ways of punishing," he said.

"There's a lot at stake. And, maybe especially so because this man was a reporter.

"There's something, you'll be surprised to hear me say that, there's something really terrible and disgusting about that if that was the case."

Khashoggi, a prominent critic of Riyadh and a US resident, disappeared on October 2 after visiting the Saudi consulate.

Turkey's Government believes he was deliberately killed inside the building and his body removed.

Mr Trump has forged closer ties with Saudi Arabia and is under international and domestic pressure to help determine what happened to Khashoggi and punish Saudi Arabia if investigations show its Government had him killed.

Republican and Democratic politicians alike have demanded firm action.

There was already mounting concern over civilian deaths caused by a Saudi-led military coalition in Yemen's civil war and some politicians have said Washington should block military sales to Riyadh if the allegations over Khashoggi are proven.

But Mr Trump is firmly opposed to such a step.

"I actually think we'd be punishing ourselves if we did that," he said.

"There are other things we can do that are very, very powerful, very strong and we'll do them," he added, without saying what those measures might be.

Under US law, major foreign military sales can be blocked by Congress.

An informal review process lets key politicians use a practice known as a "hold" to stall deals if they have concerns such as whether the weapons being supplied would be used to kill civilians.

Where is Jamal Khashoggi?

Major US defence contractors, including Lockheed Martin Corp and Raytheon Co, are among the beneficiaries of Washington's close ties to Riyadh and would be hurt by the halting of any major deal.

Mr Trump said his administration won a $155 billion military order from Saudi Arabia and that it was worth 450,000 US jobs.

"If they don't buy it from us, they're going to buy it from Russia or they're going to buy it from China," he said.

"Think of that, $US110 billion, all they're going to do is give it to other countries, and I think that would be very foolish."

It was unclear what measures Mr Trump might take against Saudi Arabia, which is the world's largest oil exporter, and one of his top allies.

The Trump administration plans to reimpose sanctions on oil exports from Iran on November 5 and Mr Trump has urged Saudi Arabia to boost oil output to help make up for the loss.

ABC/Reuters