REPORT: Trump intervenes in Gulf rift, pointing at Qatar over militant funding

U.S. President Donald Trump, wading into the worst split between powerful Arab states in decades, said on Tuesday his trip to the Middle East was "already paying off" with leaders there taking a hard new line in accusing Qatar of funding of militant groups.

His blunt remarks cast the anti-Islamist speech he gave at a Riyadh summit in May as the inspiration for a decision by leading Arab powers to sever ties and transport links to Qatar in protest at what they say is its support for terrorism.

In fact, U.S. officials were blindsided by Saudi Arabia's decision to sever diplomatic ties with Qatar in a coordinated move with Egypt, Bahrain and the United Arab Emirates, current and former officials in Washington told Reuters.

"So good to see the Saudi Arabia visit with the King and 50 countries already paying off. They said they would take a hard line on funding extremism, and all reference was pointing to Qatar. Perhaps this will be the beginning of the end to the horror of terrorism!" Trump on Twitter.

The comments -- Trump's first about the rift between Qatar and major Arab nations over its alleged support of Iran and Islamist groups -- emerged at a  delicate moment in the crisis as the leader of Kuwait was to meet in Saudi Arabia to try to mediate the dispute.

Qatar vehemently denies the accusations against it, calling them baseless. Ordinary Qataris, however, were to be found crowding into supermarkets to stock up on goods against the crisis.

Trump said, in apparent reference to top Gulf Arab powers Saudi Arabia and the UAE, that leaders he met on his trip had warned him Qatar was funding "radical ideology" after he had demanded they take action to stop financing militants.

It was not immediately clear what effect Trump's high profile intervention in the crisis would have.

U.S. officials had said on Monday that the United States would quietly try to calm the waters between Saudi Arabia and Qatar, arguing that the small Gulf state was too important to U.S. military and diplomatic interests to be isolated.

Qatar hosts 8,000 U.S. military personnel at al Udeid, the largest U.S. air base in the Middle East and a staging ground for U.S.-led strikes on the Islamic State militant group that has seized parts of Syria and Iraq.

There are also deep financial and business links between the two based on Qatar's leading world role in gas.

MEDIATION AND CONSEQUENCES

Gulf Arab officials said Kuwait's Emir Sheikh Sabah Al-Ahmad Al-Jaber al-Sabah will meet Saudi Arabia's King Salman hoping to heal the damaging rift which has affected global oil prices, hit travel plans and sown confusion among bankers and businesses in the region.

In a sign of the potential consequences for the Qatari economy, a number of banks in the region began stepping back from business dealings with Qatar. Saudi Arabia's central bank advised banks in the kingdom not to trade with Qatari banks in Qatari riyals, sources said.

Oil prices also fell on concern that the rift would undermine efforts by OPEC to tighten production.

Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani told Qatar-based Al Jazeera TV that Qatar will not retaliate, hoping Kuwait will help resolve the dispute. It wants to give Kuwait's ruler the ability to "proceed and communicate with the parties to the crisis and to try to contain the issue".

Qatar's leader, Sheikh Tamim bin Hamad Al-Thani, spoke by telephone overnight with his counterpart in Kuwait and, in order
to allow Kuwait to mediate, decided to put off a planned speech to the nation, the foreign minister said.

The split among the Sunni states erupted last month after the summit of Muslim leaders in Saudi Arabia where Trump denounced Shi'ite Iran's "establishing interventions" in Arab lands, where Tehran is locked in a tussle with Riyadh for influence.

Qatar has for years parlayed its enormous gas wealth and media influence into a broad influence in the region. But Gulf Arab neighbors and Egypt have long been irked by its maverick stances and support for the Muslim Brotherhood, which they regard as a political enemy.

BANKS SHUN QATAR, FLIGHTS DIVERTED

Tightening pressure, Saudi Arabia's aviation authority revoked the license of Qatar Airways and ordered its offices to be closed within 48 hours, a day after the kingdom, the UAE and Bahrain closed their airspace to Qatari commercial flights.

Flight tracker websites showed Qatar Airways flights taking a circuitous route mostly over Iran to avoid their neighbors.

Some Saudi Arabian and UAE commercial banks were also shunning Qatari banks, holding off on letters of credit, banking sources told Reuters on Tuesday.

With an estimated $335 billion of assets in its sovereign wealth fund and its gas exports earning billions of dollars every month, Qatar, however, has enough financial power to protect its banks.

Qatar's stock market rebounded in early trade on Tuesday after plunging the previous day but the Qatari riyal fell against the U.S. dollar.

Monday's decision forbids Saudi, UAE and Bahraini citizens from traveling to Qatar, residing in it or passing through it, instructing their citizens to leave Qatar within 14 days and Qatari nationals were given 14 days to leave those countries.

The measures are more severe than during a previous eight-month rift in 2014, when Saudi Arabia, Bahrain and the UAE withdrew their ambassadors from Doha, again alleging Qatari support for militant groups.