"The kingdom does not accept the situation in Syria, because the developments cannot be justified," the Saudi monarch said, urging Damascus to introduce "comprehensive and quick reforms."
"The future of Syria lies between two options: either Syria chooses willingly to resort to reason, or face being swept into deep chaos, God forbid," he said.
He branded the crackdown on protests as immoral and being in breach of Islamic teaching.
"Large numbers of martyrs have fallen, their blood has been shed, and many others have been wounded... This is not in accord with religion, values and morals," he said.
He reminded the Syrian government of Saudi support "in the past" but said that the Gulf kingdom, which is the Middle East's Sunni Muslim heavyweight, had to take an "historic" decision.
"Today, the kingdom stands facing a historic responsibility towards its brothers, and demands a stop to the killing machine and bloodshed."
He urged the "use of reason, before it gets too late, and the introduction and activation of reforms that are not just promises, but real, so that our brothers in Syria could feel their effect in their lives," he said.
Syrian security forces killed more than 50 people on Sunday, activists there said, as the regime defended its crackdown on "outlaws".
The US envoy to Damascus, Robert Ford, who returned to Syria on Thursday, also said in a US television interview on Sunday that Washington will "try to ratchet up the pressure" on President Bashar al-Assad's regime.
The Saudi king's statement came the day after the Gulf Cooperation Council urged Syria to "end the bloodshed" as the international pressure mounts.
The Arab League on Sunday called on the Syrian authorities to "immediately" stop the violence that has rocked the country since mid-March, in the pan-Arab body's first official statement on the unrest.
League Secretary General Nabil al-Arabi called on the "Syrian authorities to bring an end immediately to acts of violence and campaigns by the security forces against civilians," the statement said.
Neighbouring Jordan, a staunch US ally like Saudi Arabia, on Sunday said Syria's crackdown on protests was "worrisome, unfortunate and sad" urging dialogue and reforms.
Arab states had been shying away from directly criticising Assad's regime for its deadly clampdown on protests across several Syrian cities in which activists said at least 2,059 people have been killed, including 391 members of the security forces.
"The recall of the Saudi ambassador from Damascus could be followed by similar measures by other Gulf countries," Saudi columnist Jamal Khashogji told AFP.
He said that Riyadh, which is known for adopting discrete diplomacy, "will act openly along with other countries in the region and internationally in order to put pressure on the regime of Damascus to end the bloodshed."
Khashogji said he had information that a "meeting bringing together Saudis, Americans and Turks will be held soon in a capital in the region."
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