"Our Palestinian brothers have to stop fighting not just with each other," al-Saud told reporters at the Jordan-based World Economic forum.
"It is a shame that we point our wrath and anger at our fellow Arabs and Muslims in a more deadly manner than we do our enemies," said al-Saud on Saturday.
Arab League Secretary General Amr Moussa on Friday called for fighting between Palestinian factions Hamas and Fatah to stop, but blamed the battles on Israel and what he called its continuation of an economic siege on the Palestinian areas.
Israel carried out a series of strikes Friday in response to the barrage of Qassam rockets fired at Israel throughout the past week.
"The inter-Palestinian fighting cannot be averted because the Israeli troops surround the Palestinian fighters and besiege the Palestinian people to starvation limits at a time when the unemployment rate was exceeding 70 percent," Moussa said.
The siege of the Palestinians "has created a psychological atmosphere that degenerated into the present situation," he said, but added that the feuding between Hamas and Fatah "cannot be justified."
"This fighting should stop because it harms the Palestinian and Arab attitudes and benefits Israel," he said.
Moussa made the remarks to reporters on the fringes of the World Economic Forum (WEF) meeting that opened earlier in the day at the Dead Sea.
Moussa rejected anew Prime Minister Ehud Olmert's offer to open negotiations with Arab leaders, saying "we don't need formal visits and media propaganda."
"Israel has first to stop settlements and talk directly to the Palestinians and realize that the Arab peace plan is quite clear and represents an unequivocal message of peace," he said.
The Arab League chief said that the participants in a plenary session about peace, stability and international relations in the region had expressed worry over the situation and urged the U.S. to take a more neutral approach to the issues.
The members "came to the conclusion that the situation in the region is extremely bad and that the United States should change its pro-Israel policies," he said.