Trump said he did not want to block military sales to Saudi Arabia, one option that has rattled United States defense contractors, saying, "I don't want to hurt jobs".
The Saudi stock market plunged seven percent before recovering to a five percent loss for the day after Trump told CBS there would be "severe punishment" if it is determined, as Turkey believes, that Saudi agents killed Khashoggi inside Riyadh's consulate in Istanbul two weeks ago.
Each chilling leak about the possible fate of journalist Jamal Khashoggi, and the resultant worldwide condemnation, makes a behind-the-scenes compromise that much harder.
The report about the video came as Saudi Arabia dismissed on Saturday accusations that Jamal Khashoggi was ordered murdered by a hit squad inside its Istanbul consulate as "lies and baseless allegations".
Khashoggi, a Saudi national and USA resident who became increasingly critical of powerful Crown Prince Mohammed bin Salman, has not been seen since he walked into the Saudi consulate in Istanbul to sort out marriage paperwork on October 2.
Even before Khashoggi's unexplained disappearance, Democratic lawmakers had "holds" for months on at least four military equipment deals, largely because of Saudi attacks that killed Yemeni civilians.
Larry Kudlow, a senior advisor to Donald Trump, said the USA expected "a swift and transparent investigation" to happen "this week". "We have a lot of very close relationships with a lot of countries". We have some incredible people and some incredible talent working on it.
There is no set date for how long the meetings will take, but "very quick results need to be seen", the source said.
A joint statement of condemnation, if it is confirmed that Khashoggi was killed by Saudi agents, was also being discussed by United States and European diplomats, the BBC said. We want to find out what happened.
U.S. PRESIDENT TRUMP, in an interview yesterday with Fox News' Fox & Friends programme.
"Is it possible there were no camera systems in a consulate, in an embassy?"
Meanwhile Prince Mohammed's big October conference - the Future Investment Initiative dubbed by media as the "Davos in the Desert" after the annual conference in the Swiss resort - has suffered a litany of cancellations over the controversy.
Riyadh has warmly welcomed the creation of the working group but Interior Minister Prince Abdel Aziz bin Saud bin Nayef slammed the claims that Khashoggi was killed inside the consulate.
Cleaners were seen going into the building around lunchtime, causing a minor flurry of excitement, an AFP reporter said. Bob Corker, who as chairman of the Senate Foreign Relations Committee has reviewed US intelligence on the case, said it was likely that Khashoggi was killed the day he walked into the consulate.
There is no evidence either to absolve or to implicate Riyadh in the matter, [and] it is hard to trust either Turkey's or Saudi Arabia's official version of accounts, given the former's penchant for disinformation and the latter's multiple explanations.
The statement went on to say that Saudi Arabia is "committed to its principles, rules and traditions and is in compliance with global laws and conventions".
Even now analysts are anxious that Saudi Arabia may tempt countries and political figures who are seeking answers about the fate of the journalist. The siege of the tiny state of Qatar shows that MBS is also a bully.
The defiance angered Prince Mohammed, who labelled Turkey part of a "triangle of evil", lumping it together with Shi'ite power Iran and Islamic extremist groups.
The Saudi foreign ministry said King Salman affirmed his country's "solid" relations with Turkey in the phone call with Erdogan, stressing that no one could undermine their relationship. "Investors do not feel solid in Saudi yet, so it's easy for them to take back their funds". "It can only be one thing".