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The United States and Qatar on Tuesday signed an agreement on combating terror funding, but it was rejected as "insufficient" by the four Arab states that imposed sanctions on Qatar, reported AFP.

Secretary of State Rex Tillerson and Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani announced the signing of a memorandum of understanding at a joint news conference in Doha.

Tillerson said the agreement was built on decisions made at a Riyadh summit in May to "wipe terrorism from the face of the Earth".

"As a result of President Trump's very strong call, these commitments for action will begin immediately on a number of fronts," he added.

Sheikh Mohammed said Qatar was the first country in the region to sign an agreement with Washington to counter terror funding, calling on the four countries that imposed a "siege" on his country to follow suit and sign their own agreements with the U.S.

But Saudi Arabia, Bahrain, Egypt and the United Arab Emirates later rejected the memorandum of understanding, saying it is "the result of pressure and repeated calls over the past years by the four states and their partners upon Qatar to stop supporting terrorism.”

"This step is insufficient," said the statement carried by Saudi state news agency SPA, adding that the four states would "carefully monitor the seriousness of Qatari authorities in combating all forms of financing, supporting and harboring terrorism."

The statement said commitments made by Qatari authorities "cannot be trusted," citing previous agreements that have allegedly not been honored.

It called for "strict monitoring controls to ensure its (Doha's) seriousness in getting back to the natural and right path."

The four countries cut ties with Qatar last month over its support for terrorism and its alliance with regional foe Iran, charges Doha denies.

They later delivered 13 demands to ending the crisis, including shutting the Al-Jazeera network, downgrading diplomatic ties with Iran and closing a Turkish military base.

After the four countries extended a deadline for Qatar to respond to their demands, Qatar turned them down. As a result, the four countries threatened Qatar with new sanctions.

In addition to cutting ties with Qatar, the four countries placed dozens of figures linked to Qatar on blacklists, including members of the country’s royal family and one of the spiritual leaders of the Muslim Brotherhood, Yusuf al-Qaradawi.