Islam is "religion of unity, fraternity and mutual support" but some people "lured in by false calls... Are confusing reform with terrorism", the monarch said, in comments carried by state news agency SPA.
"Their goal is to sow discord among Muslims," he said in an apparent reference to insurgents from the Islamic State of Iraq and the Levant (ISIL).
The powerful jihadist group has spearheaded an offensive by Sunni militants in Iraq since June 9, wresting control of northern cities and capturing vast swathes of territory.
The ultra-conservative Sunni Gulf kingdom -- home to Mecca and Medina, Islam's holiest sites -- shares an 814-kilometre border with Iraq.
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"We will not allow a handful of terrorists, using Islam for personal aims, to terrify Muslims or undermine our country and its inhabitants," Abdullah said.
"We are continuing, with God's help, to face and tackle this scourge," he said.
The Saudi monarch also wished Muslims "security, prosperity and stability" over Ramadan, which began in most countries today.