The gathering got off to a rocky start, however, when Shi'ite and Kurdish delegates briefly stormed out on the first day after being accused by one participant of being "American stooges." They later returned after receiving an apology.
Iraqi Prime Minister Ibrahim Ja'fari called on all sides to demonstrate "goodwill towards achieving positive results."
Meanwhile, the Arab League, which is sponsoring the U.S.-backed session, warned against expecting a breakthrough.
The talks are aimed at laying groundwork for an Iraqi reconciliation conference in early 2006. Although expectations are not high, the three-day talks could provide an opportunity for Iraqi politicians to start talking with one another and to seek compromises among the country's feuding communities.
Egyptian President Hosni Mubarak opened the conference by calling national reconciliation the key to a successful transition in Iraq. He called for engaging all "sons of Iraq" in the process.
However, Iraqi President Jalal Talabani said that national unity cannot include "followers of the old regime" and religious extremists.
Arab League Involvement
Arab League Secretary-General Amr Musa invited about 100 Iraqi leaders to the gathering. Eight Arab foreign ministers, members of a special working group on Iraq, will attend the weekend meeting, along with envoys from the United States, Europe, Iran and the United Nations.
Yahia Said, a researcher on Iraq and other transitional nations at the London School of Economics, said it is important for the Arab League to appear to become more involved in building reconciliation in Iraq.
"It is a positive engagement of the Arab league after a period when it was reluctant to engage with Iraq and its is addressing the most important issues, which are issues of national reconciliation, of trying to bring at least some of the nationalists, insurgents back into the political process," Said said. "But, of course, any such reconciliation will entail concessions from those who are currently in power, from those who are currently in the lead."
Although leaders of Iraq's Sunni and Shi'ite Muslim and Kurdish factions gathered in Cairo, Abd al-Aziz al-Hakim, the leader of Iraq's largest Shi'ite political party, declined to attend the meeting. He sent a low-level delegation instead.
Said called that a clear indication that the current leaders of the country are not inclined to promise any compromises in Cairo.
"The ultimate outcome of a conference like that, if it is to be effective, are some concessions from those who are in power now but obviously they are not keen to make any concessions," Said said. "And therefore you see their lack of enthusiasm. Clearly there hasn't been sufficient pressure on them and they are not feeling that they should make any concessions. They feel that what they have achieved in the constitution and in the elections are gains that they have deserved."
Radical Shi'ite cleric Muqtada al-Sadr is not attending the event, but also sent a delegation.
The U.S. administration has lobbied Iraq's Arab neighbors to support the conference, which is aimed at persuading Iraq's Sunni Arab minority to join the political process and find accommodation with the country's Shi'ite Muslims and ethnic Kurds.
Shi'ites have been skeptical of the conference from the start and have strongly opposed participation by Sunni Arab officials from the regime of former leader Saddam Hussein or from pro-insurgency groups.
Musa traveled to Iraq in October -- his first visit since Saddam Hussein was ousted in early 2003 -- and encountered sharp criticism from Shi'ite leaders, who said the Arab League was acting too late to help in the Iraqi conflict and had failed to condemn attacks by Sunni-led insurgents.
On The Agenda
At the three-day conference, Sunni leaders were expected to press ahead with demands that the Shi'ite-dominated government agree to a timetable for the withdrawal of the foreign troops and amendments to the constitution, which was ratified in October.
Said said major compromises may come only through political process and elections.
"Maybe the situation will be different after the elections," Said said. "You keep in mind that this is a preparatory conference. This is not the main thing. This is about organizing a larger conference in January after the elections."
Participants were also expected to tackle the issue of who would take part in the full reconciliation conference in 2006.