Following the announcement, royal court adviser Saud al-Qahtani and deputy intelligence chief Ahmed al-Assiri were relieved of their positions.
But US president Donald Trump said the Saudi admission was "a good first step, a big step", adding that what had happened was "unacceptable".
In Washington's first response to Saudi Arabia's confirmation that the US-based writer was dead, White House spokeswoman Sarah Sanders said merely that the United States "acknowledges the announcement". Based on press reporting, I'm asking for Congress to open an investigation of whether any US Intelligence was shared with Saudi Arabia that led to political persecution or killing of #Khashoggi, ' he posted.
After Iraqi dictator Saddam Hussein's invasion of Kuwait in August 1990, Riyadh allowed hundreds of thousands of USA troops to deploy in the kingdom.
The Saudi Public Prosecution has "investigated a number of suspects on the basis of information provided by the Turkish authorities to the Joint Investigation Team to determine whether any of them had any information or involvement regarding the incident noting that the information provided to the investigation team indicate that Jamal Khashoggi has left the consulate".
Speaking to reporters during a trip to Arizona on Friday, Trump said he was ready to "listen to what Congress has to say" about actions to be taken in the Khashoggi case, yet also made clear he wanted to continue to protect defense contracts, and United States jobs dependent on them.
It comes as the Saudi government comes under increasing worldwide pressure over the disappearance of Jamal Khashoggi - a journalist who was allegedly killed after entering the country's consulate in Turkey.
Activists, members of the Human Rights Association Istanbul branch, holding posters with photos of missing Saudi journalist Jamal Khashoggi, talk to members of the media, during a protest in his support near the Saudi Arabia consulate in Istanbul, October 9, 2018.
Turkey has vowed to reveal all details about the killing of journalist Jamal Khashoggi, after Saudi Arabia admitted for the first time he had been killed in its consulate in Istanbul. "There are plenty of other things we can do", he said, adding, "I might know a lot by Monday".
US Treasury Secretary Steven Mnuchin and senior ministers from France, Britain and the Netherlands have abandoned plans to attend an October 23-25 investor conference in Riyadh, joining a list of Western business executives and putting the high-profile event in question.
Fellow Republican Congressman Mike Coffman called on Mr Trump to recall the U.S. ambassador to the kingdom, "pending further consultation with congress".
Khashoggi also criticized Prince Mohammed's lack of "proper advisers". But the growing crisis prompted him to intervene, five sources with links to the Saudi royal family told Reuters. King Salman has ordered Crown Prince Mohammed bin Salman to lead the charge of revamping the country's intelligence services. "The Secretary-General stresses the need for a prompt thorough and transparent investigation into the circumstances of Mr Khashoggi's death and full accountability for those responsible".
Republican senator Rand Paul in a tweet on Saturday urged the U.S. to "halt all military sales, aid and cooperation immediately". There must be a severe price for these actions by Saudi Arabia.
"No way should the world wait 30 days for a Saudi whitewash or cover up".
Rep. Adam Schiff (D-Calif.), the ranking Democrat on the House Intelligence Committee, wondered why anyone would have a fist fight with the 15 people reportedly out to kill him.
"In an earlier rebuke to Riyadh, senior officials from several governments, including US Treasury Secretary Steven Mnuchin, executives from major companies, and global media commentators withdrew from a high-profile investment conference slated for later this month".
"To say that I am skeptical of the new Saudi narrative about Mr Khashoggi is an understatement", the Republican senator tweeted.
With 1.3 million Twitter followers, the firebrand official was known for aggressively targeting dissenters and rivals on the platform. "I am an employee and a faithful executor of the orders of my lord the king and my lord the faithful crown prince".
Crown Prince Salman has been given increasing authority to run the conservative kingdom.