The Libyan leader's undiplomatic railing at the disarray of Arab nations has become almost a tradition at the annual gathering.
Al Jazeera's Middle East analyst, Lamis Andoni said: "Gaddafi says what many think, but do not say. His words reflect a prevailing sentiment in the Arab streets that is fed up with the failure of Arab leaders to rise up to challenges.
'Your turn is next'
Gaddafi asked: "How can we accept that a foreign power comes to topple an Arab leader while we stand watching?"
He said Saddam had once been an ally of Washington, "but they sold him out".
"Your turn is next," Gaddafi told the Arab officials gathered for the conference, some of whom looked stunned while others broke into laughter at his frankness.
In his speech, the Libyan leader also criticised Arab disunity and inaction on the region's multiple crises.
"Where is the Arabs' dignity, their future, their very existence? Everything has disappeared," he said.
"Our blood and our language may be one, but there is nothing that can unite us."
Gaddafi also mocked a plan by the Arab League to start Arab cooperation on a joint nuclear programme.
"How can we do that? We hate each other, we wish ill of each other and our intelligence services conspire against each other. We are our own enemy."
The deep divisions in the Arab League were already apparent after a number of Arab leaders chose to stay away from the summit in Damascus accusing Syria of "meddling" in Lebanon's domestic affairs.
Bashar al-Assad, Syria's president, used his opening address to deny that his country has been blocking the vote for a new Lebanese president.
|Damascus is close to Lebanon's |
Hezbollah-led opposition [AFP]
"I would like to make a point with regards to Syrian interference in Lebanon," he said.
"It is the contrary which is true because pressure has been exerted on Syria for over a year to interfere in Lebanon's affairs but we have refused to do so.
"The key to a solution is in the hands of the Lebanese. They have their country, constitution and institutions," he said.
The seat earmarked for Lebanon was left vacant after Fouad Siniora, Lebanon's prime minister, said his government had decided to boycott the two-day conference because the country should be represented by the president.
Lebanon has been without a president since Emile Lahoud's term ended in November as the government and Syrian-backed opposition have been unable to reach agreement.
The summit is due to re-endorse an Arab League initiative for Lebanon which calls for the election of Michel Sleiman, army chief general, as president.
In Beirut, university students tore up pictures of the Syrian president, branding him an "assassin" as he chaired the Arab summit boycotted by Lebanon.
The Saudi, Egyptian and Jordanian leaders stayed away after Washington urged its allies to think twice before attending.
But Syria trumpeted the absence of US allies as a triumph over Washington's influence.
Amr Moussa, the Arab league chief, spoke of how the summit had solidified the rift between Syria and US allies in the Middle East.
He also echoed words from in his speech from last year's summit, in which he declared that the Israeli-Palestinian peace process was dead.
Urging Arab foreign ministers to meet in mid-2008, Moussa asked for leaders attending the conference to reconsider their options on Israel and the current negotiations if no progress is seen in the next few weeks.
Assad also questioned how long Arab nations can keep offering Israel peace negotiations.
Mahmoud Abbas, Palestinian president, repeated his request for international peacekeepers to be sent to the Gaza Strip, but Saturday marked the first time he had urged Arab countries to send troops.
The summit came as Condoleezza Rice, US secretary of state arrived in the region this weekend for talks with Arab and Israeli leaders on the peace process.
In his speech, Abbas took a pessimistic tone over the Israeli-Palestinian peace negotiations which were renewed in December.
"The coming couple of months are decisive. If we don't reach a solution by the end of this year, it means the whole region will be on the verge of a new era of tension and loss of confidence in peace," he said.
|"If we don't reach a solution by the end of this year, it means the whole region will be on the verge of a new era of tension and loss of confidence |
Mahmoud Abbas, Palestinian president
He also criticised Israeli settlement expansion and the recent military assaults in the Gaza Strip aimed at stopping Palestinian rocket fire on Israeli towns.
The Palestinian president called on Arab leaders to renew the endorsement of the Arab peace initiative, pressuring Israel to stop settelement expansion, remove road blocks and lift the siege on Gaza.
Assad warned that Arab countries may have to seek alternatives to a 2002 Arab peace plan if Israel continues to refuse to accept it.
The proposal offers Israel full peace with Arab nations if it withdraws from Arab lands and allows the creation of a Palestinian state.
"The question is: Do we leave the peace process and initiatives hostage to the whims of successive Israeli governments, or do we search for choices and substitutes that can achieve a just and comprehensive peace?" Assad said.