Two of the Interior Ministry commandos guarding the delegation were killed and six others wounded in the attack on Monday, Aljazeera has learned.
However, the head of the delegation, Arab League Assistant Secretary-General Ahmed bin Heli, has denied any such occurrence.
The Iraqi government rejected the initiative introduced by the delegation to forge a national reconciliation accord. The league is facing scepticism from Shia and Kurds in the government.
Many in the two communities, which now dominate Iraq, resent the organisation's perceived inaction in response to Saddam Hussein's government and distrust the mainly Sunni group's intentions, seeing it as biased in favour of Iraq's Sunnis.
Armed men hiding in nearby houses started shooting as the convoy of the 10-member Arab League delegation was driving on a highway in Baghdad under police guard, said police Major General Hussein Ali Kamal, head of intelligence at the Iraqi Interior Ministry.
No Arab League members were hurt, Ali Kamal said. It was not immediately clear who launched the attack.
A woman in Baghdad receives
booklets on the constitution
The league officials went on to Baghdad's Umm al-Qura mosque and met with the Association of Muslim Scholars, an Arab Sunni Muslim group that is calling on Sunnis to vote against the country's draft constitution in Saturday's referendum.
As the media on Monday publicised the ballot and urged people to exercise their right to vote in five days, there was little sign of many Sunni Arabs softening their hostility to the charter.
This resistance came despite entreaties from Shia and Kurdish leaders, the United Nations, and, in at least one case, an audience with the US ambassador.
"They should not think they will change the attitude of the Sunnis," said Saleh al-Mutlak of the Sunni National Dialogue after a meeting with Washington's envoy, Zalmay Khalilzad.
"The ambassador has been working with the three different groups, trying to get a wider buy-in on the constitution, working on the language," a US embassy official said.
A leading Shia member of parliament said representatives of all groups would meet again on Tuesday. But he said the prospects of consensus were dim.
Posters in Kirkuk urge Iraqis to
reject the draft constitution
UN Secretary-General Kofi Annan, whose officials are helping organise the vote, said the lack of an inclusive settlement could mean further violence and chided the Shia- and Kurdish -dominated legislature for its part in the stand-off.
"If we do not get a universal acceptance of the constitution the likelihood of the violence continuing is there," Annan told reporters in Geneva.
The Arab League delegation arrived in Iraq last weekend to lay the groundwork for an Iraqi "reconciliation conference" it hopes to hold after Iraq's constitutional referendum on Saturday.
It was the first time the pan-Arab organisation has tried to take a direct role in Iraq since the 2003 US-led invasion.
The head of the delegation, Bin Heli, met with Iraq's president - a Kurd - and its Shia vice-president, as well as other top officials, trying to lay the plans for a reconciliation conference.
"This is an Arab mission to help Iraq," he said. "We are here to talk about the building of Iraq. We have talks to our brothers in Iraq about the best ways to help them preserve the high interests of Iraq, not the interests of any specific group."
Although government officials gave a polite welcome, they chided the league over taking so long to get directly involved in Iraq and made clear the league had to prove its good faith.
Vehicles were destroyed in an
attack on a Baghdad checkpoint
"The visit is better than nothing, although it came late," said President Jalal Talabani after meeting Bin Heli's team.
Talabani questioned who would be invited to a reconciliation conference, suggesting moderate Sunnis were welcome, but not anyone involved in violence.
A US soldier was killed and three Iraqis were wounded when a car bomb targeted a checkpoint at one of the entrances to the Green Zone in Baghdad.
The wounded who were taken to hospital were all Iraqis, including a civilian, a soldier and an interpreter, the source said.