Qatar crisis is said to be deadlocked as Saudi bloc adds demands

[KUWAIT] Efforts to resolve the standoff between Qatar and a Saudi-led alliance have reached an impasse, according to a Gulf official with direct knowledge of the matter, amid signs the bloc wants to extract more concessions from Doha.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt have yet to respond to proposals by the US and the UK that aimed to start direct negotiations, the official said, speaking on condition of anonymity because of the sensitivity of the matter.

While mediation efforts are continuing, there are no fresh ideas at the moment on how to break the impasse, he said.

The four-nation bloc said over the weekend that Qatar was falling short in its efforts to counter terrorism, rebuffing an appeal by US Secretary of State Rex Tillerson and UK Foreign Secretary Boris Johnson to ease the boycott. The alliance added nine organisations based in Yemen and Libya as well as nine people from Qatar, Kuwait, Yemen and Libya to the list of alleged terrorist groups it accuses the Gulf nation of supporting.

Qatar's benchmark stock index dropped 0.5 per cent, the most in the Middle East, at 11.19am.

Kuwait, the US and the UK are leading efforts to end the standoff, which broke out on June 5 when the Saudi-led alliance severed its diplomatic and transport links with Qatar, accusing it of supporting extremist groups.

Qatar denies the charge and says the move was an attempt by Saudi Arabia to impose its will on smaller nations in the Gulf.

Qatar's ruler, Sheikh Tamim bin Hamad Al Thani, said on Friday that his country was ready to start dialogue provided that its sovereignty is respected.

Mr Tillerson has called on the group to end the campaign as "a sign of good faith" and said the US was satisfied with Qatar's efforts in implementing the anti-terrorism agreement signed during his Doha trip this month.

Britain later joined his call, with Mr Johnson on Sunday welcoming Qatar's "commitment to combat terrorism" and expressing hope for the start of "substantive discussions on remaining differences".

BLOOMBERG