The coordinated move dramatically escalates a dispute over Qatar's support of the Muslim Brotherhood, the world's oldest Islamist movement, and adds accusations that Doha even backs the agenda of regional arch-rival Iran, Reuters said.
Announcing the closure of transport ties with Qatar, the three Gulf states gave Qatari visitors and residents two weeks to leave their countries. Qatar was also expelled from a Saudi-led coalition fighting in Yemen.
Economic disturbances loomed immediately, as Abu Dhabi's state-owned Etihad Airways said it would suspend all flights to and from Doha from Tuesday morning until further notice.
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"(Qatar) embraces multiple terrorist and sectarian groups aimed at disturbing stability in the region, including the Muslim Brotherhood, ISIS (Islamic State) and al-Qaeda, and promotes the message and schemes of these groups through their media constantly," the Saudi state news agency SPA said.
The statement accused Qatar of supporting what it described as Iranian-backed militants in its restive and largely Shi'ite Muslim-populated Eastern region of Qatif and in Bahrain.
Qatar had no immediate reaction to the announcements, and Qatari officials could not be reached for comment, but it has denied supporting terrorism or Iran in the past.
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. At that time, travel links were maintained and Qataris were not expelled.
A split between Doha and its closest allies can have repercussions around the Middle East, where Gulf states have used their financial and political power to influence events in Libya, Egypt, Syria, Iraq and Yemen.
The diplomatic broadside threatens the international prestige of Qatar, which hosts a large U.S. military base and is set to host the 2022 World Cup. It has for years presented itself as a mediator and power broker for the region's many disputes.
Kristian Ulrichsen, a Gulf expert at the U.S-based Baker Institute, said if Qatar's land borders and air space were closed for any length of time "it would wreak havoc on the timeline and delivery" of the World Cup.
U.S. Secretary of State Rex Tillerson told reporters in Sydney on Monday that the spat would not affect the fight against Islamist militants and that Washington has encouraged its Gulf allies to resolve their differences.
The announcements come 10 days after President Donald Trump visited Riyadh to call on Muslim countries to stand united against Islamists extremists, and singling out Iran as a key source of funding and support for militant groups.