Arab League secretary-general Nabil al-Arabi at the meeting.
CAIRO: Arab ministers gathered here Saturday to draw up sanctions against Syria to punish President Bashar al-Assad's regime for defying an ultimatum to allow in observers and pressing a deadly crackdown.
The finance ministers were to thrash out a package -- expected to include the suspension of flights and freezing of government assets -- which will then be put to foreign ministers on Sunday.
Turkish Foreign Minister Ahmet Davutoglu said he would join Sunday's meeting to harmonise his government's own measures with those of the Arab League, saying that Ankara's former ally had missed its last chance by failing to heed the Arab ultimatum.
But Iraqi Foreign Minister Hoshyar Zebari, whose country has close economic ties with Syria and a large refugee community in its western neighbour, said it was not possible to impose sanctions on the Assad regime.
The Arab League had set a Friday deadline for the regime to agree to the details of the observers' mission, part of a reform deal that Damascus had previously said it accepted.
Davutoglu, whose government has expressed outrage at the mounting bloodshed in its southern neighbour that saw at least 16 people killed just Friday, said the Damascus regime's refusal to allow in observers could only mean it had something to conceal.
"Syria was expected to say yes to the observers... unless there is a reality it hides about the situation in Syrian cities," Davutoglu said after the deadline's expiry.
"As it said no, it increased... the concerns on the humanitarian situation," he said, in the wake of UN estimates that the crackdown has cost more than 3,500 lives since March.
Ankara already has some measures in hand against Damascus, including a suspension of joint oil exploration and a threat to halt power exports.
"We are going to harmonise them with those prepared by the Arab League," Turkey's Anatolia news agency quoted Davutoglu as saying.
But Iraq, which abstained when the Arab League voted earlier this month to suspend Syria and threaten sanctions, expressed its strong reservations about the proposed package.
"It is not possible, in the opinion of Iraq, to impose economic sanctions on Syria," Zebari told a news conference in the Iraqi shrine city of Najaf.
"We announce our reservation on this issue," he said, although it was not immediately clear if he meant that Iraq would refuse to enforce any economic sanctions agreed by the Arab League.
Syria depends on its Arab neighbours for half of its exports and a quarter of its imports.
Were the 22-nation bloc to impose serious economic sanctions, the impact would be crippling for a country already a facing a raft of punitive measures from the European Union and the United States.
"If that is to happen, it will be very unfortunate because the damage will be to all sides," Syrian Economy Minister Mohammed Nidal al-Shaar told AFP in an exclusive interview.
But "we don't expect all Arab countries to yield or participate in sanctions," he added. "In fact, we are almost certain that some Arab countries will not participate."
Lebanon, which has a government dominated by Damascus ally Hezbollah, has already made clear that it will not enforce any economic sanctions against its larger neighbour.
In this month's vote at the Arab League, Lebanon joined Yemen and Syria itself in voting against the threat of sanctions.
The pan-Arab bloc now says that it wants UN help in its showdown with Assad after previously shying away from internationalising the crisis.
UN secretary-general Ban Ki-moon is extremely concerned at the escalating crisis and mounting death toll in Syria and is ready to help the Arab League, UN spokesman Martin Nesirky said.
Last month, European governments put a draft resolution to the UN Security Council that would have threatened targeted measures against Damascus but it was vetoed by Beijing and Moscow.
Russia, Cold War ally of Syria, made clear that it remains opposed to sanctions.
"At this stage, what we need is not resolutions, sanctions or pressure, but inter-Syrian dialogue," foreign ministry spokesman Alexander Lukashevich said.