"We are all encouraged," UN chief Kofi Annan said after the meeting. "We reaffirmed our determination to work with the Palestinian leadership to support the election."
The election, due on 9 January, will choose a successor to Palestinian Authority president Yasir Arafat.
"We must give them all the necessary support. There is an opportunity to move ahead with the road map" he added.
Annan said he thought the Israeli government was also ready to act and referred to discussions with the Israelis on the release of frozen Palestinian funds.
"We will send election monitors, ensure international support to see they get the necessary budgetary support," he said.
It was the first such meeting since the 11 November death of Arafat and came a day after US Secretary of State Colin Powell held talks with Israeli and Palestinian leaders before heading to Egypt's resort area of Sharm al-Shaikh.
"It's an informal meeting. It's a chance to focus on the weeks and months ahead in terms of the things that need to be done," a US Department of State official said ahead of the talks.
The meeting grouped Powell, Russian Foreign Minister Sergei Lavrov, Annan, EU foreign policy chief Javier Solana, EU external affairs commissioner Benita Ferrero-Waldner and Dutch Foreign Minister Bernard Bot, whose country currently holds the European Union's rotating presidency.
A US diplomat said the quartet, which drew up last year's road map plan for peace between Israel and the Palestinians, was holding an informal session.
The road map blueprint set a 2005 target date for Palestinian statehood, but has made virtually no progress since its launch last year and the US is now aiming for a state by 2009.
Israel on Tuesday agreed to allow Palestinians living in occupied East Jerusalem to vote in the January election to find a successor to Arafat.
Palestinian sources have said they expect the Americans to guarantee that Israel would also pull out its troops from all the main West Bank towns and ease military activities during the election period.
The meeting is the first such
forum since Yasir Arafat's death
The main meeting of the Iraqi conference begins at 10am (0800 GMT). A final session will be held after lunch to approve the final draft declaration, Aljazeera's correspondent said.
Diplomatic sources among the participants say a slight amendment may be carried out on the draft, but its core subject will not be changed, that is the election date wanted by the US and interim Iraqi government will not be changed.
A possible postponement of the elections was not discussed on Monday, the correspondent said, as the interim government finalised the issue at the beginning of the meeting by announcing 30 January as the date set for the elections.
The issue of US-led forces pulling out of Iraq was also finalised by a reference to UN Resolution 1546, stating that the forces must leave the country if demanded by the Iraqi government, or after a UN inspection of their presence.
The final draft declaration gives the UN a major role in the upcoming elections phase.
The pullout of US-led forces from
Iraq was discussed
The world body may be asked to send troops and observers to Iraq to oversee the elections and the post-elections phase, sources said.
Other meetings on the sidelines that were scheduled to be held, such as one between the interim government and opposition groups have been cancelled due to pressure from the US and the interim government, Aljazeera's correspondent said.
However, the final draft urges the interim government to meet Iraqi opposition groups through the Iraqi National Council, indicating that their meetings will not be overseen by the UN or the Arab League, adding no credibility to the talks.
Meanwhile, hundreds of Egyptian university students staged protests against the situation in Iraq, particularly the onslaught in Falluja.
The students expressed their rejection of the Sharm al-Shaikh conference, saying it attempted to legitimise the US presence in Iraq.
The Egyptian Lawyers Association also held a conference to announce its rejection of the conference. Iraqi opposition groups, who have been expelled from the Sharm al-Shaikh forum, were present at the lawyers' conference.