The six-nation gulf co-operation council has designated Lebanon’s Hezbollah movement a terrorist group.
The GCC’s secretary-general accused the Iran-backed Shia group of recruiting youths from gulf states for attacks.
Hezbollah is a key political and military force in Lebanon, and is involved in the conflict in Syria.
The GCC decision appears to be the latest measure by Saudi Arabia and its allies aimed at countering Hezbollah’s power over Lebanon’s government.
Two weeks ago, Saudi Arabia halted a $3bn military aid package after the Lebanese government failed to condemn attacks on Saudi diplomatic missions in Iran by protesters angered by the execution of a prominent Saudi shia cleric