The Syria crisis, in which monitors say almost 10,000 people have died in a bloody crackdown on a year-long uprising against President Bashar al-Assad, has loomed large as officials meet ahead of a summit of Arab leaders on Thursday.
The summit will be the first such gathering hosted by Iraq in more than 20 years.
The draft resolution, a copy of which was obtained by AFP, urges the "Syrian government and all opposition factions to deal positively with the (UN-Arab League) envoy (Kofi Annan) by starting serious national dialogue."
It also calls on the Syrian opposition "to unify its ranks and prepare... to enter into serious dialogue (with the regime) to achieve the democratic life which is demanded by the Syrian people."
And "the Syrian government should immediately stop all actions of violence and killing, protect Syrian civilians and guarantee the freedom of peaceful demonstrations for achieving demands of the Syrian people," the text says.
Arab League Secretary General Nabil al-Arabi told reporters on Tuesday that "the Syrian subject will have a significant place in discussions" between foreign ministers.
"I think that the ministers' meeting tomorrow and the Arab summit will support" a six-point plan put forward by ex-UN chief Annan and reportedly accepted by Damascus on Tuesday.
Arabi added that foreign ministers would also discuss the situation in the Palestinian territories, Somalia and Yemen, as well as "the dangers surrounding Israel's nuclear arms and the dangers weapons of mass destruction present to Arab national security."
Iraqi Foreign Minister Hoshyar Zebari has said he expects a resolution to address Syria, but added he did not think Arab leaders would call on Assad to step down.
Annan's plan includes calls for a daily two-hour humanitarian ceasefire and access to all areas affected by the fighting in Syria.
Annan was in Beijing on Tuesday on a trip aimed at shoring up support for his plan, after visiting Russia over the weekend and obtaining Moscow's backing for it.
Iraqi Deputy Foreign Minister Labid Abbawi said Annan's deputy Nasser al Qudwa was due in Baghdad on Wednesday to brief "the summit on the latest from Kofi Annan's deliberations."
The fallout from other Arab uprisings -- which toppled dictators in Tunisia, Egypt, Libya and Yemen, and put pressure for reform on other autocratic regimes in the region -- are also being discussed in the three days of talks in Iraq.
Iraqi Finance Minister Rafa al-Essawi, meanwhile, told journalists after Tuesday's meeting that Baghdad had requested that Saudi Arabia, Sudan, Qatar, Morocco and Libya cancel its bilateral debts.
Iraq ran up massive debts, some of which have been forgiven, during its 1980-88 war with Iran.
Tuesday's meetings of Arab economy, finance and trade ministers focused on ramping up regional tourism, tackling water security and putting in place a regional alert system for natural disasters.
More than 100,000 members of Iraq's forces are providing security in Baghdad, and Iraq has spent upwards of $500 million to refurbish major hotels, summit venues and infrastructure.
Despite the dramatically tighter measures, a suicide bomber at a police checkpoint in west Baghdad killed one policeman and wounded two others, officials said.
A week ago, al Qaeda attacks nationwide killed 50 people, including three in a car bombing opposite the foreign ministry.
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