Abd Allah is the current chairman of the 57-nation Organisation of the Islamic Conference (OIC), the world's biggest grouping of Muslim countries.
"Our view is that we'd like to encourage countries that can afford to do so, especially those countries around the region that are not too far away from Iraq - they are perhaps better placed (to send troops to Iraq)," he was quoted as saying by the official news agency Bernama on Monday.
Geographic proximity would facilitate the logistics of sending troops to the war-ravaged nation, he said, in an apparent indication that Malaysia itself was not considering contributing soldiers at the moment.
"Certainly we are not preventing others from doing so," he said.
A spokeswoman for the prime minister told reporters that Abd Allah had said Malaysia was "monitoring" the situation in Iraq and would consider any request for troops by the United Nations.
Abd Allah told Bernama that fellow OIC countries had not yet indicated to him whether they would like to participate in a US-led multinational force in Iraq, and suggested they would want to be assured that the security situation had improved first.
"Our view is that we'd like to encourage countries that can afford to do so, especially those countries around the region that are not too far away from Iraq"
Abd Allah Ahmad Badawi,
Malaysian Prime Minister
"If the situation remains very volatile and there is still a lot of violence and bombings, it is very, very difficult to get countries to participate in a multinational force," he said.
Abd Allah said Malaysia would like to participate in the reconstruction of Iraq, particularly in rebuilding the country's shattered infrastructure.
Malaysia was a strong opponent of the US-led invasion of Iraq. Abd Allah said after the handover of power last month that he believed the United Nations should play an important role in the transition and reconstruction of the country.