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Rudi Guiliani, who was mayor of the city at the time of the incident in 2001, alleged the high-ranking Saudi Prince Waleed bin Talal offered him a $10 million cheque after the two hijacked aircrafts crashed into the World Trade Centre buildings, killing more than 3,000 people.

But the offer - seen as an aid relief donation at the time - was rejected by Guiliani who allegedly tore up the cheque and gave it back to him, adding he can "burn it in hell", he repeated on Friday.

The implications were broadcast live on Fox and Friends where Guiliani was being interviewed on the controversial 9/11 draft bill that has caused tension between the US and its long-term ally, Saudi Arabia.

"I was given a cheque by a Saudi Arabian prince for $10million and he had the temerity to put out a press release blaming America and Israel for the attack on September 11th," Guiliani said during the television interview.

"I can't tell you what I said when I decided to tear up the check and give it back to him because I can't repeat it on television.

"His money, he can keep and go burn it in hell," he told the reporters, this time avoiding naming the prince whom he identified as Prince Waleed bin Talal in 2001.

"I don't only need to know but the American people need to know exactly what was the role of the Saudi Arabian government in the attacks" he said, adding the American people are "entitled to know who killed our loved ones and who almost killed all of us."

A tense time for the kingdom

The allegations add to Saudi Arabia's current discomfort as debates circulate around a controversial draft bill that could allow family members of the 9/11 attacks to take the kingdom to court for its alleged involvement.

Fifteen of the 19 hijackers involved in the 2001 attacks on New York and Washington were proven to be Saudi nationals, but the kingdom has never been formally implicated in the attacks.

Republicans supporting the motion have demanded the release of a top secret report that allegedly outlines Saudi Arabia's participation in the September 11 attacks.

The blacked-out pages were classified under the instruction of George W. Bush - a close ally of the Al Saud clan.

The bipartisan bill - the Justice Against Sponsors of Terrorism Act - is yet to reach the Senate floor where it is expected to be debated but has already caused anger in Riyadh.

Last month, Saudi Foreign Minister Adel al-Jubeir told lawmakers during a trip to Washington that the Kingdom would have to sell off $750 billion in assets if the bill is passed, in what is understood to be a stern warning to Washington.

The theory of Saudi Arabia's connection to the attacks was revisited last year when the only al-Qaeda plotter convicted told US lawyers that members of the Saudi royal family donated millions of dollars to the militant group in the 1990s.

The Saudi embassy denied the allegations, branding Zacarias Moussaoui "a deranged criminal whose own lawyers presented evidence that he was mentally incompetent".

Burying the hatchet

Obama attempted to soothe the tensions when he met with Gulf leaders in Riyadh this week in what is likely to be his final visit as president of the United States.

The president, who has categorically rejected the passing of bill previously, did not mention the topic with the GCC officials during the tense farewell visit but instead appeased his Gulf allies with assurances regarding the US commitment to holding Iran accountable for its actions in the region, the ongoing conflicts in Syria and Yemen, as well as the international fight against Islamic State militants.

"Despite all these differences, Saudi Arabia and America are not getting divorced," Bruce Riedel, director of the Intelligence Project at the Brookings Institution and a former CIA official told CNN. "We need each other."