U.S. imposes sanctions for Khashoggi killing, Saudis seek death penalty

(Adds U.S. senators' bill that would suspend weapon sales)

By Patricia Zengerle and Stephen Kalin

WASHINGTON/RIYADH, Nov 15 (Reuters) - The United States imposed economic sanctions on 17 Saudi officials on Thursday for their role in the killing of Saudi journalist Jamal Khashoggi, as Saudi Arabia's public prosecutor sought the death penalty for five suspects in the murder.

The U.S. Treasury Department sanctions were the first concrete response by the Trump administration to Khashoggi's death in the Saudi consulate in Turkey in October.

Among those sanctioned were Saud al-Qahtani, who has been removed from his position as a top aide to the powerful Crown Prince Mohammed bin Salman, as well as the Saudi Consul General Mohammad al-Otaibi and members of a 15-person team Turkey has identified as being involved.

The measure was unusual for Washington, which rarely imposes sanctions on Saudi nationals. The sanctions do not target the Riyadh government, an important U.S. security and economic ally.

It also allows the administration to stop short of action that might affect lucrative U.S. arms deals with Saudi Arabia that President Donald Trump has vowed to preserve.

The sanctions limit access to the U.S. financial system and freeze people's assets. They will be implemented under an act which targets perpetrators of serious human rights abuses and corruption.

"These individuals who targeted and brutally killed a journalist who resided and worked in the United States must face consequences for their actions," Treasury Secretary Steve Mnuchin said in a statement.

Canada, which had a major diplomatic dispute with Saudi Arabia this year over human rights, welcomed the U.S. sanctions and said it was weighing similar action.

The U.S. government did not impose sanctions on Saudi officials over the Sept. 11, 2001, attacks on the United States, in which 15 of the 19 hijackers were from the kingdom.

A U.S. government commission found no evidence that Saudi Arabia directly funded al Qaeda, which carried out the attacks on New York and Washington. The panel, however, left open whether individual Saudi officials might have.

DEATH SENTENCE

Khashoggi, a royal insider turned critic of Saudi policy, was killed in the Saudi consulate in Istanbul on Oct. 2. He was a U.S. resident and columnist for The Washington Post and his killing has provoked a political crisis in Saudi Arabia as well as friction with Western allies.

Some members of the U.S. Congress said that even with the sanctions the administration has not been tough enough, specifically in regard to the Saudi crown prince.