"The least I can say is that I am outraged when people think I can be connected to terrorists when all I wanted to do was to give some help to someone in need," Princess Haifa told the NY Times.

Following the Newsweek report, some lawmakers suggested that Saudi Arabia face punitive sanctions should a conclusive link be found.

Meanwhile, the Saudi daily Al-Madinah said Wednesday that "certain parties in Washington are trying to sabotage our historic relationship based on friendship and shared interests."

"Certain parties have relentlessly poisoned our ties by spreading rumors about alleged Saudi funding of the perpetrators of the September 11 attacks.

"They are seeking to blackmail us politically and realize U.S. plans to strike Iraq and remodel the whole Middle East," said the paper, which, like the rest of the Saudi media, largely reflects official thinking in Riyadh.

The commentary came after the Washington Post reported that a U.S. National Security Council task force was urging President George W. Bush to issue a 90-day ultimatum to Riyadh to crack down on terrorism financing or face unilateral action by Washington.

Senior officials also told the daily U.S. intelligence agencies have compiled a list of nine wealthy individuals, seven of them Saudis, claiming they are the core financiers of what they call Islamic terrorist groups, including Osama bin Laden's Al-Qaeda network.

The report drew a strong denial from the leading moderate in the administration, Powell, who leapt to the defense of Washington's historic ties with Riyadh.

"There is no substance to those reports, and I have no knowledge of any such study which results in the conclusion that we should issue such ultimatums or take unilateral action.

"We should not, in our concern and in our desire to protect ourselves, go to the point where we rupture relations with a country that has been a good friend of the United States for many, many years, and is a strategic partner," said Powell.

But his comments were undermined by those of White House spokesman Ari Fleischer, who confirmed the existence of the National Security Council task force and acknowledged that the administration believed the kingdom needed to do more to "exonerate" itself of charges of links to terrorism.

"Saudi Arabia is a good partner in the war on terrorism, but good partners can do more. The United States' job is to work with the government of Saudi Arabia to push them to do more."

Fleischer stressed that the views expressed in the Post were those of just one member of the NSC task force, but he added that all options were still under consideration.

Since the September 11 attacks, U.S. officials have publicly characterize Riyadh as a stalwart ally in the campaign.

But privately frustration has mounted, notably in response to Saudi Arabia's opposition to any military action against Iraq, and recent news reports have alleged Saudi ties to terrorist groups.

"It is clear that relations between Riyadh and Washington are going through the most serious crisis in their history," said a spokesman of the London-based Saudi opposition group, the Islamic Reform Movement.

"The implication of leading Saudi businessmen in terrorism funding threatens to sorely test the relationship between Riyadh and Washington as it could extend to members of the royal family, which will never accept its dirty linen being washed in public, least of all in the United States," Saad al-Faqih said.

While facing public accusations from the U.S. and going through a bitter phase in the two countries’ relations, Saudi Arabia's official media highlighted Wednesday an outspoken attack on the Muslim Brotherhood by Interior Minister Prince Nayef bin Abdul-Aziz, in which he accused the leading Islamic group of harming Muslim interests.

"All our problems come from the Muslim Brotherhood. We have given too much support to this group ... The Muslim Brotherhood has destroyed the Arab world," Prince Nayef said in an interview last week with the Kuwaiti daily Al-Siyasah carried by the Saudi Press Agency.

"Whenever they got into difficulty or found their freedom of maneuver restricted in their own countries, Muslim Brotherhood groups found refuge in the kingdom which protected their lives.

"The Brotherhood has done great damage to Saudi Arabia and caused too many problems."

Prince Nayef singled out the Sudanese wing of the Brotherhood led by ousted parliament speaker Hassan al-Turabi, accusing the now-jailed politician of turning his back on Saudi benefactors after an Islamic-backed coup by President Omar al-Beshir brought the Brotherhood to power in 1989.

"Hassan Turabi lived and studied in the kingdom. I personally consider him a friend ... But as soon as he came to power, he turned against the kingdom," Prince Nayef charged.