In proposals submitted to parliament, MP Awwad Barad al-Inizi called on authorities to provide stateless persons, known as "bidoon", with free education and medical care, civil identification, marriage certificates and drivers' licences.
He also called for allowing their children to study in public schools and admitting the children of Kuwaiti women married to bidoons to Kuwait university.
The government launched a crackdown on bidoons in 2000, depriving them of their essential rights, and their legal status remains unresolved.
The bidoon, Arabic for without, are Arabs who have residency ties to the country, some going back generations, but who either lack or have failed to produce documentation of their nationality.
In April, Kuwaiti opposition MPs walked out of a parliament session, accusing the government of failing to resolve the longstanding issue of some 90,000 bidoons who claim to be Kuwaiti citizens.
Kuwait launched a crackdown on
bidoons in 2000
Officials, however, maintain that the bidoon came from neighbouring states after the discovery of oil.
Interior Minister Shaikh Nawaf al-Ahmad al-Sabah told the house that 20,000 of them had produced their original citizenship and were given residence permits like other foreigners.
'Belonging to other countries'
He said documented information shows that more than 37,000 of them belong to other countries and accordingly must stop claiming Kuwaiti citizenship.
The oil-rich emirate has decided not to grant citizenship to bidoons who came to Kuwait after 1965 and will only consider those who came before then.
The number of bidoon dwindled from about 250,000 before the Iraqi invasion in August 1990 to about 120,000 after Kuwait's liberation seven months later as most of them fled to Iraq.
Some are employed in the Kuwaiti army and police force but many others are not allowed to work, a situation for which Kuwait has repeatedly come under criticism by international human rights bodies.