Saudi Arabia had claimed ignorance of the incident before making this statement.
Trump said the death was "unacceptable" and there would be a response from the U.S., but that he would wait to speak to the crown prince before announcing the United States response.
According to Castro, this means there has to be an investigation into the potential sharing of intelligence between the US and Saudi Arabia.
U.S. Treasury Secretary Steven Mnuchin and senior ministers from France, Britain and the Netherlands have abandoned plans to attend an October 23-25 investor conference in Riyadh.
The United States warned Friday of a "wide range" of responses should it determine that Saudi Arabia was behind the disappearance of Khashoggi, as Turkey widened its investigation into the scandal.
Trump said he would be working with Congress on next moves, but "I would prefer that we don't use as retribution canceling $110 billion worth of work, which means 600,000 jobs. we need them as a counterbalance to Iran". Turkish officials have said Khashoggi was killed and dismembered.
"The investigations are still underway and 18 Saudi nationals have been arrested", the statement said.
Oct 8: Turkish authorities summon the Saudi ambassador and ask for proof that Mr Khashoggi left the consulate.
"The level of detail that is coming out from Turkish security sources is so clear that some form of tape must exist", he said, praising Turkish intelligence services' work on the case.More news: 'Orange Is the New Black' Canceled, Ending With Season 7 on Netflix
He says if Trump's Republican administration won't hold Saudi Arabia accountable for Khashoggi's death, Congress will.
But, the disappearance of Khashoggi has tarnished Prince Mohammed's reputation and deepened questions about his leadership. The other official let go, Saud al-Qahtani, managed the royal family's media relations.
"Now, a fight breaks out and he's killed in the consulate, all without knowledge of Crown Prince", said US Republican Senator Lindsey Graham, an ally of Mr Trump's.
The crown prince has painted himself as the face of a vibrant new kingdom, diversifying its economy away from oil and introducing some social changes.
Crown Prince Salman has been given increasing authority to run the conservative kingdom.
The kingdom also offered a far different version of events than those given by Turkish officials, who have said an "assassination squad" from the kingdom including an official from Prince Mohammed's entourage and an "autopsy expert" flew in ahead of time and laid in wait for Khashoggi at the consulate. According to the king's order, the committee is to report back to him within a month.
One of the story's sources also said that Kushner "took a list out of these people who had been trashing MBS in phone calls, and said 'these are the ones who are your enemies'". He did not disclose the whereabouts of his body. The Saudi official told Reuters, "We don't know for certain what happened to the body".
"It's not the simplest situation to be in", he said, and praised the speed of the Saudi investigation.
His disappearance had been shrouded in mystery and triggered an global crisis, with Turkish officials accusing Saudi Arabia of a state-sponsored killing and dismembering his body.