Khashoggi's killing was the first issue the crown prince raised after he strode on to the stage at the Future Investment Initiative conference in Riyadh.
The Turkish president didn't mention the audio recording that Turkish media said had recorded Khashoggi's murder.
"The incident took place in Istanbul. therefore the adjudication of these 18 [suspects] should be carried out in Istanbul", he said. He used the word "murder" 15 times in his speech to parliament.
Saudi Arabia's latest announcement follows news that Central Intelligence Agency director Gina Haspel has heard audio recordings believed to capture the journalist's murder.
The Saudi kingdom has provided conflicting accounts of what happened to Khashoggi, a U.S. resident and Washington Post contributor.
He described it as a "political murder" but stopped short of blaming the crown prince, saying: "Intelligence and security institutions have evidence showing the murder was planned". A Turkish official said the Washington Post report was accurate.
British PM Theresa May wants Saudi authorities to complete a swift and transparent investigation into the murder of Jamal Khashoggi.
On Wednesday, before Erdogan spoke with MBS he stated that anyone found responsible for ordering Khashoggi's death will not be able to "avoid justice".
"We are a looking at. suspending export permits, which is something we've done in the past", he said on his way into a Liberal caucus meeting Wednesday.
First, Saudi Arabia said Khashoggi had left the building alive, then that he had been killed in a "fist-fight" inside the consulate. The case has shocked people around the world.
But Trump's State Department was more specific.
Saudi Arabia's foreign minister said Tuesday the investigation into the killing of Khashoggi would produce the truth about what happened.
On Tuesday there were similar conflicting reports over whether Khashoggi's belongings had been found in suitcases in a Saudi diplomatic auto.
The Associated Press reported this story.
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