Iraq is hosting its first Arab League summit in 22 years, with talks expected to be dominated by the crisis in Syria.
Nine heads of state and UN chief Ban Ki-moon were among those attending the opening of the summit in the former Republican Palace on Thursday.
Despite rigorous security arrangements, a mortar round landed on the edge of the fortified Green Zone as the summit got under way.
"It was a mortar round that landed near the [Iranian] embassy. There are no casualties," though some of the windows of the embassy were broken, a police official said.
The city has been effectively locked down for the occasion, with 100,000 security forces on alert. Swathes of roads, air space and mobile networks have been shut down.
The talks are expected to be dominated by the crisis in Syria.
Arab leaders will call for talks between the Syrian government and opposition based on a six-point peace plan proposed by UN-Arab League peace envoy Kofi Annan, according to a draft copy of the Baghdad Declaration obtained by AFP.
The region's leaders "denounce the violence, murder and bloodshed, and are in favour of a political solution via national dialogue," said the document, to be issued after the summit.
Arab leaders have said, however, that the summit will not call for President Bashar al-Assad to quit, and will not consider arming the opposition seeking to overthrow him.
Arab states have been divided in two camps in regards to Syria, with countries such as Qatar and Saudi Arabia advocating sending arms to the opposition and others, such as Iraq, pushing for political reconciliation.
Al Jazeera's Jane Arraf, reporting from the summit, said Arab nations worried that Syria could devolve into civil war and that the international community would be forced to respond.
"Arab states certainly don't want to get in the middle of this, with Iran on one side, and the whole Arab world on the other," she said.
The emir of Kuwait was the lone head of state to attend from the six Gulf Arab nations.
The UN chief said Assad must turn his acceptance of Annan's plan to divert his country from a "dangerous trajectory" with risks for the entire region.
"It is essential that President Assad put those commitments into immediate effect. The world is waiting for commitments to be translated into action. The key here is implementation, there is no time to waste," Ban told the summit.