Prince Alwaleed bin Talal said on Twitter that Mr Trump
should give up his presidential ambitions because he would never win.
It follows Mr Trump's call for Muslims to be barred from
entering the US for security reasons.
Mr Trump tweeted back, calling the prince "dopey".
"You are a disgrace not only to
the GOP [Republican Party] but to all America," Prince Alwaleed tweeted.
"Withdraw from the US
presidential race as you will never win."
Mr Trump responded by accusing the
prince of wanting to use what he called "daddy's money" to control US
politicians.
That would not happen, Mr Trump
said, when he got elected.
Mr Trump, the frontrunner for the 2016 Republican Presidential
Nomination, has been widely criticised for his call for a ban on Muslims
entering the US.
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