After 18 days in which it insisted it had no involvement in the journalist's disappearance, Riyadh conceded that Khashoggi died as a result of the altercation after he had come to the consulate to obtain paperwork needed for his upcoming wedding.
An announcement carried on Saudi state TV said discussions between Khashoggi and officials at the consulate quickly turned violent, and ended in his death. Those responsible then tried to cover up the death, state TV said.
Five high-ranking officials have been removed from their posts, including the deputy head of the Saudi intelligence service, and 18 Saudis have been detained, state TV said.
Long silence
The statement was the first official confirmation of Khashoggi's death in Turkey 18 days ago, and the first acknowledgment by Saudi Arabia of its role in it.
"The Kingdom of Saudi Arabia expresses deep regret at the painful developments that have taken place in this case and affirms the commitment of the authorities in the Kingdom to bring the facts to the attention of the public and to hold accountable all those involved," the statement said.
Khashoggi disappeared after going to the Saudi Arabian consulate in Istanbul at about 1:15 p.m. on October 2 to obtain paperwork to marry his Turkish fiancée, Hatice Cengiz. She raised the alarm just before 5 p.m, while she was still waiting outside.
According to Saudi state media, citing official sources, the public prosecutor's office investigated a number of suspects based on the information they received from Turkish authorities. Preliminary investigations showed a suspect went to Istanbul to meet with Khashoggi with the possible intention of bringing the journalist to the Kingdom.
The Saudis have set up a commission, led by Crown Prince Mohammed bin Salman, that will restructure the Saudi general intelligence directorate and will have one month to release a report, state TV said.
The commission will consist of national security officials, the foreign ministry and the interior ministry.
Trump: Saudi story credible
When asked if he found the Saudi explanation credible, US President Donald Trump said he did.
He called the official statement from Riyadh a "good first step" and said talks with Saudi officials would continue, including raising some questions about their account of events.
He added that Saudi Arabia has been a "great ally in the Middle East," but that "what happened is unacceptable."
Trump said he would work with Congress to develop a response to Khashoggi's death, but said that he didn't want sanctions to affect US arms sales to the kingdom.
"I would prefer if there is going to be some form of sanctions -- this was a lot of people they're talking about .... I would prefer we don't use as retribution canceled $110 billion worth of work," he told reporters after a roundtable at Luke Air Force Base in Arizona.
Trump said he would withhold fuller comment until he speaks with Crown Prince Mohammed bin Salman.
Intense pressure
Saudi Arabia has been under intense pressure since Khashoggi's disappearance.
Turkish officials, mostly speaking privately, have released a steady stream of gory details about what happened to the journalist at the consulate. They said he was killed soon after he entered the embassy, and his body dismembered.
None of the Saudi statements give any clue as to what happened to Khashoggi's remains.
As many as 20 people who work at the Saudi Arabian consulate, including a driver, technician, accountant, and concierge personnel have given statements to Turkish investigators in their probe of Khashoggi's death, according to semi-official Turkish media outlet Anadolu.
US officials have told CNN that the operation could not have been carried out without the knowledge of Prince bin Salman, Saudi Arabia's de facto ruler.
Ahead of the Saudi statement, Bin Salman repeatedly denied knowledge of Khashoggi's fate.
Widespread condemnation
The apparent circumstances of Khashoggi's disappearance caused worldwide revulsion. Businesses pulled out of an investment conference due to be held in Saudi Arabia next week, and Trump came under pressure to issue an unequivocal condemnation. On Thursday -- before the Saudi statement -- US Treasury Secretary Steven Mnuchin announced he would not participate in the conference.
White House press secretary Sarah Sanders said in a statement, "The United States acknowledges the announcement from the Kingdom of Saudi Arabia that its investigation into the fate of Jamal Khashoggi is progressing and that it has taken action against the suspects it has identified thus far."
"We will continue to closely follow the international investigations into this tragic incident and advocate for justice that is timely, transparent, and in accordance with all due process. We are saddened to hear confirmation of Mr. Khashoggi's death, and we offer our deepest condolences to his family, fiancée, and friends."
Members of Congress could put pressure on the White House to act. South Carolina Sen. Lindsey Graham said on Twitter, "To say that I am skeptical of the new Saudi narrative about Mr. Khashoggi is an understatement."
His colleague Sen. Richard Blumenthal accused the Saudis of "buying time and buying cover," calling for an investigation that included US involvement and Turkish audio and visual records of the event.
"The Saudis very clearly seem to be buying time and buying cover, but this action raises more questions than it answers, the Connecticut Democrat told CNN's Wold Blitzer on "The Situation Room" Friday night.
A spokesman for UN Secretary-General Antonio Guterres said he was "deeply troubled" by the news.
"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," the spokesman said.
Key ally canned
In Saudi Arabia, all eyes will be on what happens next. In dispatching Ahmed al-Assiri, the deputy intelligence chief, Prince bin Salman has lost a key ally.
Assiri is believed to have been chief architect of the war with Yemen, and was previously the Saudi-led coalition spokesman in the kingdom's war against Yemen's Houthi rebels.
The two-star general's position as spokesman made him a household name and he was soon part of the crown prince's inner circle.
According to several sources, he chose the team involved in Khashoggi's disappearance.
Also dismissed were Royal Court Consultant Saud al-Qahtani, Rashad bin Hamed Al-Mohammady, the head of the General Department for Security and Protection at the agency, along with Mohamed bin Saleh Al-Ramih and Abdullah bin Khalifa Al-Shayee, two high-ranking intelligence officers.
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