"The Middle East peace process has failed. The whole process should now be sent back to the Security Council for a complete overhaul," said Arab League Secretary-General Amr Moussa.
"We are going to the Security Council — this is a unanimous position — to discuss the whole situation from scratch," he said.
"If the Security Council fails, nobody knows what might happen next," he added, pronouncing the whole Mideast peace process "dead."
But the group did not throw its support behind Hezbollah. Squabbles over the legitimacy of the rebel group's attacks on Israel — including the capture of two Israeli soldiers that sparked the 4-day battle — caused dissention in the ranks, delegates said.
The Saudi foreign minister appeared to be leading a camp of ministers criticizing the guerrilla group's actions, calling them "unexpected, inappropriate and irresponsible acts."
"These acts will pull the whole region back to years ago, and we cannot simply accept them," Saudi al-Faisal told his counterparts.
Supporting his stance were representatives of Egypt, Jordan, Kuwait, Iraq, the Palestinian Authority, the United Arab Emirates and Bahrain, delegates said on condition of anonymity because of the sensitivity of the talks.
Syrian Foreign Minister Walid Moallem lashed back al-Faisal, asking "How can we come here to discuss the burning situation in Lebanon while others are making statements criticizing the resistance?"
Moallem emerged as the leader of another camp of ministers defending Hezbollah as carrying out "legitimate acts in line with international resolutions and the U.N. charter, as acts of resistance," delegates said.
Earlier, Lebanese Foreign Minister Fawzi Salloukh presented his fellow Arab League members with a draft resolution condemning Israel's military offensive and supporting Lebanon's "right to resist occupation by all legitimate means" — language frequently used by Hezbollah to justify its guerrillas' presence in south Lebanon.
The draft, a copy of which obtained by The Associated Press, also demanded the release of Lebanese captives and detainees in Israeli prisons, and supported Lebanon's right to "liberate them by all legitimate means."
Salloukh, a Shiite close to the mainstream Amal faction as well as the militant Hezbollah, said Arab governments were not doing enough to protest Israel's assault on Lebanon.
"What our Arab brothers have called `involvement' has only resulted in frustration and bitterness among Arab people," Salloukh told participants at the meeting Saturday.
"If (Arab) governments are not serious and determined ... our people will sooner or later take things into their own hands," he said.
Israel launched its offensive after Hezbollah guerrillas crossed the Israel-Lebanon border on Wednesday and captured two Israeli soldiers. Israel hasand main roads and destroyed Hezbollah's headquarters in south Beirut. Hezbollah has responded by into Israel.
At least 79 Lebanese have died, mostly civilians.
In Kuwait, Saad Hariri, head of the anti-Syrian bloc in Lebanon's parliament, told reporters that his country "should not become a playground" for Mideast fighting.
"Israel has to understand that Lebanon is not a terrorist state but a state fighting for freedom, and the Lebanese have to unite and stay united," Hariri said.
"A clear Arab position on this (Israeli) aggression has to be issued (in the foreign ministers meeting)," he added.
Palestinian factions issued a statement Saturday calling on Arab foreign ministers to "overcome their differences, and take a united Arab position pressuring the American administration to amend its pro-Israel position, boycott Israel and support the steadfastness and resistance of the Lebanese and Palestinian people."
The groups, Islamic and secular, called on Arab governments to push for U.N.-sponsored negotiations to release Palestinian and Lebanese prisoners as well as the captured Israeli soldiers.
In Saudi Arabia, King Abdullah was to meet Saturday afternoon with Ali Larijani, Iran's top nuclear negotiator, whose country is a top backer of Hamas and Hezbollah.
The two would discuss "the situation after Israeli forces launched attacks on Lebanon, and search for way out," a Saudi diplomat said on condition of anonymity because he was not allowed to speak to the media.