Saudi Arabia, Egypt, Bahrain, the United Arab Emirates and Yemen have cut diplomatic ties with Qatar, accusing it of destabilising the region.
They say Qatar backs militant groups including so-called Islamic State (IS) and al-Qaeda, which Qatar has denied.
The Saudi state news agency SPA said Riyadh had closed its borders, severing land, sea and air contact with the tiny peninsula of Qatar.
Qatar called the move "unjustified" with "no basis in fact".
The unprecedented move is being seen as a significant split between powerful Gulf countries, who are also close US allies.
It comes in the context of increased tensions between Gulf countries and their near-neighbour Iran. The Saudi statement accused Qatar of collaborating with Iranian-backed militias.
What has happened?
The diplomatic withdrawal was put into motion by Bahrain then Saudi Arabia early on Monday. Their allies swiftly followed.
SPA cited officials as saying the decision was taken to "protect its national security from the dangers of terrorism and extremism".
The three Gulf countries have given Qatari nationals two weeks to leave their territory.
In the latest developments:
- The UAE has given Qatari diplomats 48 hours to leave the country. Abu Dhabi accuses Qatar of "supporting, funding and embracing terrorism, extremism and sectarian organisations," state news agency WAM said
- The UAE state airline Etihad Airways said it would suspend all flights to and from Qatari capital Doha from 02:45 local time on Tuesday
- Bahrain's state news agency said it was cutting its ties because Qatar was "shaking the security and stability of Bahrain and meddling in its affairs"
- The Saudi-led Arab coalition fighting Yemen's Houthi rebels also expelled Qatar from its alliance because of Doha's "practices that strengthen terrorism" and its support to groups "including al-Qaeda and Daesh [IS], as well as dealing with the rebel militias", according to SPA.
What has been the reaction?
Qatar, which is due to host the football World Cup in 2022, was critical of the decision, in comments broadcast on Al Jazeera.
"The measures are unjustified and are based on claims and allegations that have no basis in fact," Al Jazeera quoted the foreign ministry as saying. It said the decisions would "not affect the normal lives of citizens and residents".
US Secretary of State Rex Tillerson, speaking in Sydney, urged the countries to resolve their differences through dialogue.
"I do not expect that this will have any significant impact, if any impact at all, on the unified fight against terrorism in the region or globally," he added.
Qatar's stock market plunged in early trading on Monday,