The GCC, which groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, has called for dialogue to resolve the row.
 
'Confrontation and escalation'
 
Mahmoud Ahmadinejad, Iran's president, offered a security pact with the Gulf Arab leaders, saying: "We want peace and security ... based on justice and without foreign intervention.
 
Warning any security problem in one Gulf state would affect all the others, he said: "We are proposing the conclusion of a security agreement."
 
He also said he wanted to create an economic co-operation bloc for Gulf states and offered to share Iranian expertise in a range of areas including "energy and the new technologies".
 
Before the meeting, Abdulrahman al-Attiyah, the secretary-general of the GCC, urged all parties to shy away from "confrontation and escalation".
 
Saad al-Ajmi, a Gulf political analyst, told Al Jazeera that Ahmadinejad's presence at the meeting "is in line with the strategy of the GCC countries always postulating and arguing for negotiation and peaceful settlements for all disputes".
 
'Message of independence'
 
Asked how the invitation to Ahmadinejad might be interpreted by the US, a traditional Gulf ally, al-Ajmi said it was both a message to the US and to Iran.
 
"I don't think the United States is happy with the presence of Ahmadinejad at this summit but they [the GCC] are communicating a message of independence [to the US] on the one hand and communicating their own message of saying 'we really want to have a settlement for this [nuclear] problem'."
 
Abdul Rahman al-Attiya of the GCC
has called for dialogue on Iran [AFP]
"This latter message is sent to the Iranian president himself," he said.
 
Last month, Sheikh Salman bin Hamad al-Khalifa, Bahrain's crown prince, accused Tehran for the first time of seeking to acquire nuclear arms.
 
The GCC countries have already announced plans to acquire their own civilian nuclear programme.
 
A compromise GCC proposal for an internationally controlled consortium to provide Middle Eastern countries with enriched uranium has been greeted by Iran without enthusiasm.
 
Despite Iranian denials, the US and its allies are pressing for stronger UN sanctions against Tehran.
 
Currency concern
 
Leaders of the Gulf states will also address economic issues as they face mounting pressure either to end their currencies' peg to a sliding dollar or to revalue.
 
The UAE's state-run news agency has said it expected rulers to change currency policy, but retracted the report after ministers from other states said reform was not even on their agenda.
 
"We will not drop it. That's it," said Ibrahim al-Assaf, the Saudi finance minister, of the riyal's peg to the dollar, before the summit.
 
Saudi Arabia, the largest Arab economy, has not changed the riyal's rate since 1986.
 
With the Gulf's largest population, the kingdom fears a revaluation would cut the riyal value of dollar-denominated oil revenue with prices soaring.
 
Its smaller, wealthier neighbours are more concerned that the falling value of the dollar is stirring trouble among millions of expatriate workers and hampering their central banks in the fight against inflation, which is at its highest levels for a decade in the region.
 
The UAE's central bank governor said last month he was under mounting social and economic pressure to drop its peg and instead track a number of currencies.
 
The GCC leaders have already decided to stick to a self-imposed 2010 target date for the launch of a regional single currency, despite rising inflation, a delegate told the AFP news agency.