"Our reservations are about Iran's policy in the region, not about Iran as a country or people," the foreign minister said at a joint press conference in the Red Sea city of Jeddah with Germany's Frank-Walter Steinmeier.
"In many conflicts, Iran is part of the problem, not the solution," Prince Saud said, charging that Shiite-dominated Iran had forces in Syria "fighting Syrians."
"In this case, we can say that Iranian forces in Syria are occupying forces," aiding President Bashar al-Assad, whom he described as an "illegitimate" leader.
Assad receives financial and military aid from Iran, which denies having fighters on the ground.
He is also backed by fighters from Lebanon's pro-Iranian Shiite movement Hezbollah, according to the International Institute for Strategic Studies.
"If Iran wants to be part of the solution in Syria, it has to pull its forces from Syria. The same applies elsewhere, whether in Yemen or Iraq," the Saudi minister said.
Iran is accused of backing Shiite rebels in Yemen, who overran the capital Sanaa on September 21.
Among the many groups fighting Assad is the Islamic State group of extremists, which Saudi Arabia and four other Arab states are now battling under a US-led coalition.
The Arab nations have taken part in or given support to coalition air strikes against the IS militants in Syria.
The Sunni extremist IS has seized large parts of Syria and Iraq, declaring a "caliphate" where they have been accused of carrying out widespread atrocities, including mass executions, crucifixions and beheadings, and forcing women into slavery.
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