RIYADH, Saudi Arabia -

The Saudi king sharply criticized Arab leaders Wednesday for divisions and infighting and painted a bleak picture of the bloodshed and turmoil across the Middle East as he opened an Arab summit in the Saudi capital.

King Abdullah said in an address to the delegations that Arab nations are "further from unity than they were at the time of the founding of the Arab League," the 22-member body formed in 1945 to promote Arab unity.

Abdullah pointed to the bloodshed in Iraq, where he called the U.S military presence an "illegitimate occupation" and warned that "abhorrent sectarianism threatens a civil war."

"The real blame should be directed at us, the leaders of the Arab nation," he said. "Our constant disagreements and rejection of unity have made the Arab nation lose confidence in our sincerity and lose hope."

Abdullah also called for the lifting of the international financial embargo on the Palestinians, saying it was time to "end the oppressive blockade imposed on the Palestinians as soon as possible so the peace process will get to move."

The Riyadh summit comes amid a more assertive diplomatic role by Saudi Arabia in trying to resolve a string of crises in the Middle East, particularly the Lebanon crisis, the bloodshed in Iraq and Sunni Arab fears over the growing power of mainly Shiite Iran.

Abdullah met Tuesday night with Syrian President Bashar Assad, their first meeting since last summer's Israel-Hezbollah war, which raised tensions between the two leaders. Abdullah is a supporter of Lebanon's anti-Syrian Prime Minister Fuad Saniora, while Assad backs Lebanon's president, Emile Lahoud, and the Hezbollah militant group.

The Saudi monarch also was angered when Assad criticized Arab leaders as "half men" in a speech following the cease-fire in Lebanon, and Abdullah has since then turned down several attempts by Assad to meet and make up.

Last month, Saudi Arabia brokered a power-sharing agreement between the Palestinian factions Fatah and Hamas in an attempt to end international sanctions against the government.

At the summit, Arab leaders were expected to revive a plan for peace with Israel, with U.S. allies trying to enlist other Arabs in efforts to win Israeli and Western acceptance of the deal.

Saudi Foreign Minister Saud al-Faisal and other Arab officials said Israel must accept the Arab offer. "If Israel refuses, that means it doesn't want peace. Then (the conflict) goes back into the hands of the lords of war," al-Faisal said Tuesday.

The initiative, first launched by the Arab summit in 2002, offers Israel recognition and permanent peace with all Arab countries in return for Israeli withdrawal from lands captured in the 1967 Mideast war.

It also calls for setting up a Palestinian state with east Jerusalem as its capital and a "just solution" to the issue of Palestinian refugees forced out of lands in what is now Israel.

Israel rejects a full withdrawal from the West Bank and east Jerusalem, and it strongly opposes the influx of large numbers of Palestinian refugees into the Jewish state.

Israel rejected the Arab initiative in 2002, but Prime Minister Ehud Olmert said last week his country was willing to accept it with some changes, particularly if demands on Palestinian refugees were watered down.

The Arab summit plans to relaunch the peace plan without any changes. "They tell us to amend it, but we tell them to accept it first, then we can sit down at the negotiating table," Arab League Secretary-General Amr Moussa said in a speech at the summit opening.

The summit will create "working groups" to promote the offer in talks with the United States, United Nations and Europe -- and perhaps Israel. U.S. allies Saudi Arabia, Jordan and Egypt are hoping that the groups can work behind the scenes to make the initiative more palatable to Israel and the West and the basis for a relaunching of talks.

Jordanian Foreign Minister Abdul-Ilah al-Khatib said there was a possibility that the working groups could hold direct talks with Israel. "This has been discussed," he said in an interview published Wednesday in the Arab daily Al-Hayat.

But much depends on the makeup of the working groups, which could be the source of dispute at the summit. Some have spoken of restricting the membership to Saudi Arabia, Jordan, Egypt and the United Arab Emirates. But the more hard-line Syria -- which opposed changing the peace initiative -- also may seek to join the working groups, fearing it will be sidelined by the moderates.

UN Secretary-General Ban Ki-moon, a guest speaker, said he had urged Israel "to take a fresh look at this initiative" during a visit to Israel earlier this week.

"The Arab peace initiative is one of the pillars of the peace process," he said. "We must build on this."

European Union foreign policy chief Javier Solana urged Arab states to be flexible in their offer to Israel, calling the Arab initiative "a general concept that has to be developed." He also called for an end to Israel's occupation of lands seized in the 1967 Mideast war.

On the Iraq issue, the summit is expected to push the Shiite Muslim-led Iraqi government to include more Sunni Arabs. The summit's final resolutions call for Baghdad to rewrite the constitution and rebuild the armed forces to accommodate more Sunnis.

Iraqi Foreign Minister Hoshyar Zebari bristled at the resolutions, saying: "We do not need dictation from the Arab countries. Our national interest is our concern, not theirs."

"We want them to help fight terrorism and monitor (Iraq's) borders to prevent the influx of weapons," he said.

Iranian Foreign Minister Manouchehr Mottaki is attending the summit as a guest. The Arab League is dominated by Sunni Muslim-led nations that are deeply suspicious of Iran's influence in the region and see Iraq's Shiites as backing Iranian interests.