A number of Arab countries including Saudi Arabia and Egypt 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 denies.
The Saudi state news agency SPA said Riyadh had closed its borders, severing land, sea and air contact with the tiny peninsula of oil-rich Qatar.
Qatar called the decision "unjustified" and with "no basis in fact".
The unprecedented move is seen as a major split between powerful Gulf countries, who are also close US allies.
It comes amid heightened tensions between Gulf countries and their near-neighbour, Iran. The Saudi statement accused Qatar of collaborating with "Iranian-backed terrorist groups" in its restive eastern region of Qatif and in Bahrain.
What has happened?
The diplomatic withdrawal was first put into motion by Bahrain, then Saudi Arabia, the United Arab Emirates (UAE), Egypt, Yemen, Libya's eastern-based government and the Maldives all followed suit.
SPA cited officials as saying the decision was taken to "protect its national security from the dangers of terrorism and extremism".
Saudi Arabia, the UAE and Bahrain have given all Qatari visitors and residents two weeks to leave their territory. The three countries have also banned their citizens from travelling to Qatar.
However, Saudi Arabia says it will still allow Qataris to take part in the annual Hajj pilgrimage to Mecca.
So far, there has been no sign of reciprocal moves by Qatar.
In the latest developments:
- The UAE and Egypt have given Qatari diplomats 48 hours to leave both countries
- Airlines from many of the affected countries, including EgyptAir, Etihad Airways and Emirates, said they are to cancel flights to and from the Qatari capital Doha
- The Gulf allies said they had closed their airspace to Qatar Airways, which has suspended all its flights to Saudi Arabia
- 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 its "practices that strengthen terrorism" and its support of extremist groups.
Why has this happened?
While the severing of ties was sudden, it has not come out of the blue, as tensions have been building for years, and particularly in recent weeks.
Two weeks ago, Egypt, Saudi Arabia, Bahrain and the UAE blocked Qatari news sites, including Al Jazeera. Comments purportedly by Qatari Emir Sheikh Tamim bin Hamad al-Thani criticising Saudi Arabia had appeared on Qatari state media.
The government in Doha dismissed the comments as fake, attributing the report to a "shameful cybercrime".
Back in 2014, Saudi Arabia, Bahrain and the UAE withdrew their ambassadors from Qatar for several months in protest over alleged interference in their affairs.
More broadly, two key factors drove Monday's decision: Qatar's ties to Islamist groups, and the role of Iran, Saudi Arabia's regional rival.
While Qatar has joined the US coalition against IS, the Qatari government has repeatedly denied accusations from Iraq's Shia leaders that it provided financial support to IS.
Wealthy individuals in the country are believed to have made donations and the government has given money and weapons to hardline Islamist groups in Syria. Qatar is also accused of having links to a group formerly known as the Nusra Front, an al-Qaeda affiliate.
The SPA statement accused Qatar of backing these groups, as well as the Islamist Muslim Brotherhood - banned in Gulf countries as a terrorist organisation - and that it "promotes the message and schemes of these groups through their media constantly".
Saudi Arabia itself is a key backer of Islamist rebels, including hardline jihadist groups, in Syria.
While on a visit to Riyadh two weeks ago, US President Donald Trump urged Muslim countries to take the lead in combating radicalisation, and blamed Iran for instability in the Middle East.
"It seems that the Saudis and Emiratis feel emboldened by the alignment of their regional interests - toward Iran and Islamism - with the Trump administration," Gulf analyst Kristian Ulrichsen told Reuters news agency.
"[They] have decided to deal with Qatar's alternative approach on the assumption that they will have the [Trump] administration's backing."
Saudi Arabia, too, has been accused of funding IS, either directly or by failing to prevent private donors from sending money to the group - allegations it denies.
In recent days, British Prime Minister Theresa May has also come under pressure from election rivals to publish a report thought to focus on the funding of UK extremist groups by Saudi Arabia.
What has been the reaction?
Qatar, which is due to host the football World Cup in 2022, was critical of the decision. The foreign ministry 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.
Iranian foreign ministry spokesman Bahram Qasemi said there was a need for "transparent dialogue and diplomacy", adding: "No country in the region will benefit from the heightened tension."
Qatar's stock market closed down 7.27%.
One of the likely knock-on effects is on food stability: about 40% of Qatar's food is believed to come by lorry from Saudi Arabia.
The Doha News newspaper reported that people had rushed to supermarkets to stock up on food and water.
Nearly 90% of Qatar's population are migrant workers, many of whom are working on the construction boom fuelled by the successful World Cup bid.
Why this decision now? - Alan Johnston, BBC Middle East analyst
There have long been tensions not far beneath the surface. Qatar has often seemed out of step with its neighbours.
It has tended, for example, to side with Islamist forces in the Middle East - like the Muslim Brotherhood, which is reviled by the Saudis and the current Egyptian leadership.
Past efforts by the neighbours to pull the Qataris into line have had limited impact. But now Doha has suddenly come under much greater and more co-ordinated pressure.
Emboldened by President Trump's trip two weeks ago, the Saudis and the Emiratis believe that this is the moment to make clear to Qatar that its divergent views will no longer be tolerated.
And right now this small country's rulers will probably be feeling very lonely indeed.