The United States has in response sanctioned some of those involved but spared the crown prince himself in an effort to preserve relations with the kingdom.

Khashoggi, a US resident who wrote opinion columns for the Washington Post critical of Crown Prince Mohammed bin Salman's policies, was killed and dismembered by a team of operatives linked to the prince in the kingdom's consulate in Istanbul.

The Saudi government, which has denied involvement by the crown prince, issued a statement on Friday rejecting the findings and repeating previous claims Khashoggi's killing was a heinous crime by a rogue group.

US President Joe Biden appeared to be trying to make clear that killings of political opponents were not acceptable to the United States while preserving ties to the crown prince, who may rule one of the world's top oil exporters for decades and be an important ally against common foe Iran.

Among the punitive steps the United States took on Friday, it imposed a visa ban on some Saudis believed involved in the killing and sanctioned others, including a former deputy intelligence chief.

US officials also said they were considering cancelling arms sales to Saudi Arabia that pose human rights concerns and limiting future sales to "defensive" weapons.

"We assess that Saudi Arabia's Crown Prince Muhammad bin Salman approved an operation in Istanbul, Turkey to capture or kill Saudi journalist Jamal Khashoggi," the US Office of the Director of National Intelligence said in the report.

The intelligence agency based its assessment on the crown prince's control of decision-making, the direct involvement of one of his key advisers and his own protective detail, and his "support for using violent measures to silence dissidents abroad, including Khashoggi".

"Since 2017, the Crown Prince has had absolute control of the Kingdom's security and intelligence organisations, making it highly unlikely Saudi officials would have carried out an operation of this nature without (his) authorization," the report said.

In declassifying the report, Biden reversed his predecessor Donald Trump's refusal to release it in defiance of a 2019 law, reflecting a new US willingness to challenge the kingdom on issues from human rights to Yemen.

However Biden is treading a fine line to preserve ties with the kingdom as he seeks to revive the 2015 nuclear deal with regional rival Iran and address other challenges including fighting Islamist extremism and advancing Arab-Israeli ties.

The Treasury Department imposed sanctions on Ahmed Hassan Mohammed al-Asiri, Saudi Arabia's former Deputy Head of General Intelligence Presidency, and Saudi Arabia's Rapid Intervention Force in connection with Khashoggi's murder.

The Treasury accused Asiri of being the ringleader of the Khashoggi operation and said several members of the hit squad sent to intercept the journalist were part of the RIF, a subset of the Saudi Royal Guard which answers only to the crown prince.

The US intelligence report judged that members of the force would not have participated in the operation without approval from the crown prince.

Australian Associated Press