The 88 members, four from the parliaments or advisory councils of each Arab League member, met at the league's Cairo headquarters for a session on Tuesday addressed by Amr Moussa, the league's secretary-general and Hosni Mubarak, the Egyptian president.
The interim parliament has no binding legislative authority and can give its opinion only on matters referred to it by the Arab League council, which represents Arab governments.
Based in Syria, it will meet twice a year.
Mubarak called the inaugural session "a historical occasion which opens new horizons for joint Arab action".
Rawhi Fattuh, speaker of the Palestinian legislature, said the parliament would be valuable only if it kept an eye on the actions of Arab governments.
"It must be a monitor of Arab executive institutions, but if it is just a union of parliaments then it's not going to be important," he said at the meeting.
The interim parliament has no
binding legislative authority
Some Arab countries, such as Saudi Arabia and the United Arab Emirates, do not have elected parliaments, so their representatives in the Arab parliament are drawn from appointed advisory councils which have little power.
Some of the elected Arab parliaments are dominated by the executive or ruling party and rarely challenge the government.
The concept of the Arab parliament was part of a package of institutional changes promoted by Moussa as a way to make the Arab League strong and more effective.
But Arab heads of state have not approved other aspects of the package, including an Arab court of justice and an Arab security council to handle regional disputes.
The new interim parliament has five years to draft the arrangements for a permanent Arab parliament.
Post for liberal
In one of its first decisions on Tuesday, it chose liberal Kuwaiti Muhammad Jassim al-Saqr as its speaker, said Alaa Rushdi, an Arab League spokesman.
Al-Saqr, who has been head of the Kuwaiti parliament's foreign relations committee, has an initial term of one year, the Egyptian state news agency Mena said.
The forum has five years to draft
a permanent parliament plan
Arab League officials say they hope the permanent parliament will eventually have power, possibly through direct elections similar to those held for the European parliament.
Said one official: "It's only a start, but the European parliament started small too. It's part of a trend away from an Arab League which exclusively represents governments."
Under Moussa in recent years, the Arab League has increasingly brought civil society groups into discussions.
"We have several regional parliaments - the European Parliament and the African Parliament. The Arab Parliament will be looking at them and their experiences and what they can learn from them," said spokesman Rushdi.