The conference is seen as the interim government's best hope of securing peace and strengthening its legitimacy.
"The conference is now open, there were people who thought we could never meet, [but] we thank God"
Ali Mahdi Mohamed, chairman of the conference organisers
The administration has struggled to impose its authority on the impoverished country since ousting the Union of Islamic Courts (UIC) from Mogadishu in late December.
Government troops and their Ethiopian military allies ringed the venue - a former police headquarters in northern Mogadishu. Soldiers on tanks and trucks fitted with heavy guns looked on as troops searched everyone entering the compound.
UIC fighters and allied clan members opposed to the interim government are blamed for almost daily roadside blasts and suicide bombings, and vowed to attack the meeting.
Mahdi said: "The conference is now open. There were people who thought we could never meet, [but] we thank God."
Violence fuelled by clan rivalries has foiled 13 previous attempts to set up central rule in Somalia since Mohamed Siad Barre, the former ruler, was overthrown in 1991.
Envoys from several EU member states had planned to attend the opening ceremony, diplomats said, but were unable to when the United Nations cancelled their flight late on Friday.
When the talks get under way, they are expected to focus on clan reconciliation, disarmament and the sharing of natural resources. But many Somalis say the government should be talking to the UIC's remnants instead.
In the latest violence on Sunday, local media said three people including a district official died in a grenade attack in Afgooye, a town 30km southwest of the capital.