Gulf leaders and senior officials arrived in the Bahraini capital Manama on Monday to discuss regional issues as well as closer economic and military ties during the 33rd summit of the Gulf Cooperation Council (GCC).
They will discuss calls made last year by Saudi Arabia's King Abdullah bin Abdul Aziz for a "transition from the stage of cooperation to the Union" to confront what he called growing threats facing the Middle East.
Gulf countries have been discussing a monetary and customs union as well as a common market between them to enhance integration.
The summit is held in Bahrain, where the majority Shiite population led protests last year against the Sunni regime.
In March 2011, Saudi-led GCC troops marched into Bahrain to help quell anti-government rallies. They left after three months.
The two countries have accused Shiite-led Iran of fomenting unrest. Tehran has denied interfering and has accused the Sunni rulers of discriminating against Shiites in their own countries.
Saudi Foreign Minister Saud al-Faisal reiterated his country's criticism of Iran ahead of the meeting. He told Tehran to stop interfering in internal Gulf affairs, in comments published by the regional, Saudi-owned al-Hayat daily.
"Interference to stir sedition is unacceptable from a neighbour," he said.
The GCC was formed in 1981 and comprises Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.