The report released by the Biden administration says the prince approved a plan to either “capture or kill” Khashoggi.
The US announced sanctions on dozens of Saudis but not the prince himself.
Saudi Arabia rejected the report, calling it “negative, false and unacceptable”.
Crown Prince Mohammed, who is effectively the kingdom’s ruler, has denied any role in the murder.
Khashoggi was killed while visiting the Saudi consulate in Istanbul, Turkey, and his body cut up.
The 59-year-old journalist had once been an adviser to the Saudi government and close to the royal family but he fell out of favour and went into self-imposed exile in the US in 2017.
From there, he wrote a monthly column in the Washington Post in which he criticised the policies of Prince Mohammed.
“We assess that Saudi Arabia’s Crown Prince Muhammad bin Salman approved an operation in Istanbul to capture or kill Saudi journalist Jamal Khashoggi,” the report by the office of the US director of national intelligence says.
The crown prince is the son of Saudi King Salman bin Abdulaziz al-Saud and is considered to be the effective ruler of the kingdom.
The intelligence report lists three reasons for believing that the crown prince must have approved the operation:
The report goes on to name individuals allegedly complicit in, or responsible for, Khashoggi’s death. But it says “we do not know how far in advance” those involved planned to harm him.
Saudi authorities have blamed the killing on a “rogue operation” by a team of agents sent to return the journalist to the kingdom, and a Saudi court tried and sentenced five individuals to 20 years in prison last September, after initially sentencing them to death.
In 2019, UN special rapporteur Agnes Callamard accused the Saudi state of the “deliberate, premeditated execution” of Khashoggi and dismissed the Saudi trial as an “antithesis of justice”.
Shortly after the report was released, US Secretary of State Antony Blinken announced the travel restrictions, dubbed the “Khashoggi Ban”.
Those targeted are “believed to have been directly engaged in serious, extraterritorial counter-dissident activities”, he said.
“Perpetrators targeting perceived dissidents on behalf of any foreign government should not be permitted to reach American soil,” he warned.
In addition, the treasury department sanctioned some of those around the crown prince: one of his close aides, former deputy intelligence chief Ahmad Asiri, as well as his personal protective force, which was involved in the killing.
As far back as 2018, the CIA reportedly believed that the crown prince had ordered the murder but the allegation that he was involved has never been made publicly by US officials until now.
Saudi Arabia, the world’s biggest oil exporter, is a key American ally in the Middle East.
US President Joe Biden is expected to take a firmer line than his predecessor Donald Trump on human rights and the rule of law in Saudi Arabia. (Courtesy BBC)