The developing eight (D-8) summit is aimed at increasing economic ties between Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey.
Mahmoud Ahmadinejad, the Iranian president, handed over the group's leadership to Indonesia saying that the D-8 offered "a good model of cooperation and understanding based on justice."
"In this context the Islamic Republic of Iran feels obliged to mobilise all its means and possibilities to further strengthen D-8," he said
The Iranian president did not mention the high-profile dispute with Western nations over Iran's nuclear programme in his opening remarks at the summit - although nuclear energy featured on the meeting's agenda.
The Malaysian foreign minister, Syed Hamid Albar, said that diplomacy was the best solution to the crisis over Iran's nuclear programme.
"We always believe that dialogue is the best way," he said after talks with Ahmadinejad.
"A diplomatic solution is the best solution. We should not create another crisis."
Iran insists that its nuclear programme is a peaceful effort to generate power but Western nations including the US suspect Tehran is pursuing the capability to make nuclear weapons.
Susilo Bambang Yudhoyono, the Indonesian president, delivered the other opening speech.
"We must be able to embrace modernity by becoming forward looking, by becoming knowledge-driven, by advancing a culture of excellence," he said.
Yudhoyono said the D-8 nations wanted to achieve progress "through peace not war, dialogue not confrontation, cooperation not exploitation, justice not double standards, equality not discrimination, democracy not oppression."
The group held its first summit in 1997 and last met in Tehran in February 2004.