The United States, Kuwait's emir and Turkey worked to end a row, with U.S. President Donald Trump offering to help resolve the crisis, possibly in a meeting at the White House.
Central banks in Saudi Arabia, the UAE, and Bahrain were this week said to have asked lenders to provide details of their exposure to Qatari clients.
Meanwhile, Kuwaiti Emir Al-Ahmad Al-Sabah, who played a pivotal role in mediating a compromise in a 2014 diplomatic dispute between Saudi Arabia, Qatar and other Gulf states, flew to Qatar Wednesday night and met with Qatari Emir Sheikh Tamim bin Hamad Al-Thani.
He also rejected "a military solution as an option" to resolving the crisis, and said Qatar could survive "forever" despite the measures taken against it.
SPA, a Saudi state news agency, said the kingdom cut ties because Qatar "embraces multiple terrorist and sectarian groups aimed at disturbing stability in the region, including the Muslim Brotherhood, ISIS, and Al Qaeda, and promotes the message and schemes of these groups through their media constantly", according to Reuters.
Qatar hosts the Al-Udeid military base, the largest USA airbase in the Middle East. Erdoğan called Kuwait Sheikh Sabah late on June 7 following a meeting with Iranian Foreign Minister Javad Zarif, discussing developments in the Gulf.
A top Gulf official, speaking on condition of anonymity, told AFP a major concern was the influence of Sheikh Tamim's father, Sheikh Hamad, who had allowed the Taliban to open an office in Doha and helped arm Syrian rebels before abdicating in 2013.
Saudi Arabia's Foreign Minister Adel Al-Jubeir said that harming Qatar was not Riyadh's goal, but that it had to make a necessary choice. In an interview with BBC radio, UAE Ambassador to Russia Omar Saif Ghobash said Qatar had to choose between supporting extremism or supporting its neighbors. On Wednesday, Emirati officials shut down the airline's offices in the UAE.
Analysts have raised the prospect of a palace coup in Qatar, a hereditary monarchy with a history of such changes in leadership.
Bahrain on Thursday followed the UAE in announcing that expressing sympathy for Qatar over the sanctions was an offence punishable by jail.