League chief Amr Musa travelled to Tunis on Wednesday to persuade President Zain al-Abidin Bin Ali to host the March meeting.
But widespread criticism of the 22-member group's inability to reform or deal with its almost total lack of political credibility have meant few countries are keen to host the event.
The Tunisian president first hinted the government might not welcome the summit last month, although he has now agreed.
He has asked for assurances that Arab leaders will refrain from the public bickering that has embarrassed previous occasions.
Should Musa have failed to persuade the Tunis government, Egypt is likely to host the venue.
The Sharm al-Shaikh summit last March turned into a complete disaster after Saudi Crown Prince Abd Allah bin Abd al-Aziz and Libyan leader Muammar al-Qadhafi had a televised row.
TV screens went blank as argument deteriorated into accusations. The Saudi delegation walked out, breaking off diplomatic relations with Libya.
The 22-member Arab League is
under pressure to reform
Even if the summit venue is agreed, the Arab League faces an even greater challenge of how to reform an organisation that has been accused of failing to stand up for Iraq and the Palestinians.
Reform was expected to top the agenda of the next summit, Arab diplomats say.
Chance for change?
Since he was appointed the organisation's secretary general in 2001, Musa has called for reform - saying the League should be "strong or not exist at all".
"The ambitious proposals to modernise the Arab League are born of the need to unify stands before the growing challenges the Arabs have faced since the 11 September attacks and the US occupation of Iraq."
Both Libya and Yemen have presented plans to create an Arab Union, modelled on the European Union or the African Union, which Libya sponsors.
Egypt has proposed banning the unanimous vote system in favour of a majority vote, while Libya, Saudi Arabia and Yemen have proposed a two-thirds vote of the 22 members.
All members have expressed interest in discussing the need for "reviving the joint Arab defence pact."
On the economic front, the League hopes for the creation of a free-trade zone and eventually an Arab Economic Union.