UPDATE 1-Saudi Arabia says it believes Canada to go ahead with arms deal

Saudi Arabia said on Monday it believes Canada will go ahead with a multibillion-dollar arms deal with the kingdom despite remarks by the Canadian prime minister that Ottawa was looking for a way out of the agreement. "Regarding the Canada arms deal, we see the Canadian government going ahead with the deal, so the statements are for domestic consumption," Saudi Minister of State for Foreign Affairs Adel Jubeir told a news conference in Riyadh.

He did not elaborate. Prime Minister Justin Trudeau said in December he was looking for a way out of the $13 billion deal for armored vehicles made by the Canadian unit of General Dynamics Corp .

The firm warned later that month that the federal government would incur "billions of dollars of liability" by unilaterally scrapping the agreement. Political opponents, citing the killing of journalist Jamal Khashoggi and Saudi Arabia's involvement in the Yemen war, insist Trudeau should scrap the pact negotiated by the previous Conservative government.

Relations between Ottawa and Riyadh have been tense since a diplomatic dispute over human rights last year. Ottawa says it has been consulting allies on what steps to take after Khashoggi was killed inside the Saudi consulate in Istanbul in October. Germany, also concerned about Riyadh's role in the Yemen war and Khashoggi's killing, last year banned future arms sales to the Gulf Arab state.

The Saudi public prosecutor’s spokesman has said that 11 Saudis had been indicted and referred for trial over the murder, with authorities seeking the death penalty for five. (Reporting by Marwa Rashad, Editing by Peter Graff and Ed Osmond)