The three-day talks sponsored by the Arab League started on Saturday and are meant to prepare for a larger conference in Iraq after elections.
Officials hope they will provide an opportunity to start ironing out differences between the country's communities.
Iraqi Prime Minister Ibrahim al-Jaafari said the meeting was "part of steps aimed at promoting the political process in Iraq" and called on all sides to demonstrate "goodwill towards achieving positive results".
"We support any step which might contribute to stability," al-Jaafari told reporters on arrival in Cairo.
Joining the meeting alongside Iraq's prime minister will be Foreign Minister Hoshyar Zebari, Vice-President Ghazi al-Yawar, head of the influential Association of Muslim Scholars (AMS) Shaikh Harith al-Dari and head of the Islamic Party Tariq al-Hashimi.
President Jalal Talabani will take part in the opening session.
"We support any step which might contribute to stability"
Iraqi prime minister
Arab League sources have said former Iraqi Baathists will attend as members of some delegations, something that may irk top Shia leaders who have insisted that they are not ready to talk to those opposed to their new government.
There are, however, notable Shia absentees such as Abd al-Aziz al-Hakim, leader of the main Shia party SCIRI, and the influential Shia leader Muqtada al-Sadr, but both are sending delegations in their places.
Alongside the Iraqi leaders, Syrian Foreign Minister Faruq al-Shara, Iranian Foreign Minister Manouchehr Mottaki, Egyptian President Hosni Mubarak and Algerian President Abdelaziz Bouteflika are also to attend.
Arab League Secretary General Amr Musa has cautioned against exaggerated expectations.
Speaking to Aljazeera from Cairo, Husain al-Duri, an Arab League adviser on Iraq, said: "We first have to work to achieve unity of our homeland and attempt to bring everyone together.
"We should work toward building a solid foundation, based on the unity and sovereignty of our homeland, the occupation and other related issues.
Prime Minister Ibrahim al-Jaafari
(R) will attend the conference
"The most basic of which include the identity of Iraq, the unity of the country and its people, sovereignty and independence, not forgetting the departure of the occupiers."
All the participants have come to Cairo in search of common ground, he said.
He told Aljazeera that the conference was to build confidence and establish dialogue. "This conference represents a preparatory meeting for the main conference that will be held after the elections."