The initiative would "enable us to overcome the obstacles and bottlenecks that hinder the development of trade and investment between our countries," OIC secretary general Ekmeleddin Ihsanoglu said.

A number of Muslim nations are to sign a protocol on a preferential trading system in November, but that only represents "very modest progress", Ekmeleddin told the World Islamic Economic Forum in a speech read out by another official.

While the share of intra-OIC trade in Muslim countries' overall trade had improved in the last few years from 10 percent in 2000 to 13.5 percent in 2003, it remained low, he said.

"Such a situation is the result of a large number of major obstacles, which impeded the wide expansion of trade and investment, namely tariff, non-tariff and administrative obstacles and lack of communication and transport means and inappropriate financing schemes," he said.

Ekmeleddin warned that Muslim nations would be disadvantaged if they failed to forge multilateral trading alliances.

"The current world conjecture is marked by the increasing emergence of regional groupings where isolated countries cannot survive," he said.