The Saudi state news agency SPA said Riyadh had closed its borders, severing land, sea and air contact with the tiny peninsula of oil-rich Qatar.
Qatar called the decision “unjustified” and with “no basis in fact”.
The unprecedented move is seen as a major split between powerful Gulf countries, who are also close US allies.
It comes amid heightened tensions between Gulf countries and their near-neighbour Iran. The Saudi statement accused Qatar of collaborating with “Iranian-backed terrorist groups” in its restive Eastern region of Qatif and in Bahrain.
What has happened?
The diplomatic withdrawal was put into motion by Bahrain then Saudi Arabia early on Monday. The United Arab Emirates (UAE), Egypt, Yemen and Libya followed suit.
SPA cited officials as saying the decision was taken to “protect its national security from the dangers of terrorism and extremism”.
Saudi Arabia, the UAE and Bahrain have given all Qatari visitors and residents two weeks to leave their territory.
In the latest developments:
The UAE has given Qatari diplomats 48 hours to leave the country. UAE airlines Etihad Airways, Emirates and Flydubai said they would suspend all flights to and from the Qatari capital Doha from early Tuesday, local time
The Gulf allies said they had closed their airspace to Qatar Airways, which has suspended all its flights to Saudi Arabia
Bahrain’s state news agency said it was cutting its ties because Qatar was “shaking the security and stability of Bahrain and meddling in its affairs”
The Saudi-led Arab coalition fighting Yemen’s Houthi rebels also expelled Qatar from its alliance because of its “practices that strengthen terrorism” and its support of extremist groups.
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Why has this happened?