Speaking at a news conference in Riyadh, Prince Saud said his country was not breaking off relations, but was taking what he called limited measures despite the ''ugliness of what happened.''

The prince said the Libyan Embassy in Riyadh and the Saudi Embassy in Tripoli would remain open.

The Saudi action grew out of a bizarre series of events that started with Crown Prince Abdullah and the Libyan leader, Col. Moammar Gadhafi, flinging insults at each other during a tense summit meeting of Arab leaders in February 2003.

The meeting failed in its purpose of preventing the U.S. invasion of Iraq. But during the discussions, Gadhafi said Saudi Arabia had made ''a pact with the devil'' by inviting U.S. forces in 1990. The prince shot back that the colonel was a liar who should not speak on subjects he knew nothing about.

Gadhafi, insulted, returned home and soon thereafter began concocting a scheme to pay Saudi dissidents to try to eliminate the prince, according to a prominent Arab-American sentenced in October in the United States to 23 years in prison after confessing to his role in the plot. The plea deal by the dissident, Abdurahman Alamoudi, in federal court in Alexandria, Va., included the details of how he was recruited by Libyan intelligence officers to funnel hundreds of thousands of dollars to anti-Saudi dissidents in London and elsewhere. The plot came to light this year during the same period that Washington lifted sanctions against Libya, long vilified for its support of terrorism, as a reward for its giving up its unconventional weapons. Libya has denied the terrorism accusations.

The Saudis were particularly incensed over the matter because they had worked hard to extract Libya from the international sanctions.

The move Wednesday seemed to indicate that the Saudis concluded that the plot was serious. It will undoubtedly open another fissure in inter-Arab affairs, with each side expecting sympathy for its position.

''Expelling and withdrawing the ambassadors means that matters have reached the point of certainty in the kingdom that Libya is implicated,'' said Hassan Abu Taleb, an analyst of inter-Arab relations at Al Ahram Center for Political and Strategic Studies in Cairo.

That proof would contradict Libya's claims to have renounced terrorism, he said, adding, ''Withdrawing the ambassador, I think, is the least that can happen in such circumstances.''