Donald Trump had previously suggested "rogue killers" could be behind Mr Khashoggi's disappearance. Trump's comments followed a phone call with King Salman in which Trump said he strongly denied any knowledge of what happened to the journalist.
The Kingdom is said to be preparing a report that would admit that Khashoggi was killed as the result of an interrogation that went wrong, CNN reported, citing two unnamed sources.
King Salman emphasised the importance of the Turkey-Saudi relationship and said no-one should be able to "undermine the strength of this relationship", Saudi's official media reported.
Khashoggi - a USA resident, Washington Post columnist, and leading critic of the powerful Saudi crown prince, Mohammed bin Salman - vanished after entering the Saudi consulate in Istanbul two weeks ago to get marriage documents.
CNN and the Wall Street Journal reported earlier Monday that Saudi officials were discussing such a plan.
Similar campaigns have been trending on social media in Saudi Arabia and the UAE, although there has been no official backing so far.
There are already calls, most notably on Monday by Bahrain's top diplomat and UAE businessmen to boycott USA companies like Uber whose chief executive pulled out of the upcoming Saudi investment conference.
The third individual said the US government still doesn't know precisely what explanation the Saudis plan to give, but that the Saudis intend to admit "culpability".
But he has also made clear he is reluctant to curb all-important arms sales to Saudi Arabia.
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Saudi officials and consulate workers denied murder allegations and claimed that Khashoggi left the consulate, but have failed to provide any evidence of his exit from the facility.
"Been hearing the ridiculous "rogue killers" theory was where the Saudis would go with this", Sen.
That frustrated US intelligence and diplomatic officials, who anxious that the Turks were citing the evidence as leverage to get loans from the Saudis. JPMorgan Chase CEO Jamie Dimon, KKR executive David Petraeus and Ford Motor Chairman Bill Ford have also said that they will not attend the Saudi event. "Determining what happened to Jamal Khashoggi is something of great importance to the president", she said.
The Saudis experts I speak to say what is not credible is the idea that 15 people would leave Saudi Arabia in two jets from Riyadh, fly to Istanbul, be associated or be around the Saudi Consulate in Istanbul without Mohammed bin Salman's knowledge.
But late yesterday evening - after Turkish authorities placed high iron barriers in front of the consulate - a motorcade of six cars drew up and Turkish police and prosecutors entered the premises.
A Turkish diplomatic source had earlier said a joint Turkish-Saudi team would search the building - the last place Khashoggi was seen before he vanished on October 2.
The search came after Turkish President Recep Tayyip Erdogan and King Salman also had their first telephone talks since the controversy erupted, in what appeared to be a conciliatory conversation according to official readouts.
Meanwhile, the United Nations human rights chief has called for Saudi diplomatic immunity at "relevant premises" to be waived "immediately" for anyone who could be involved in Mr Khashoggi's disappearance.