Terrorism and a nuclear-free Middle East were among the stumbling blocks of a joint declaration to be issued in Paris on Sunday for the founding of the Union for the Mediterranean, dpa reported.
Heads of state and government from more than 40 countries were attending its launch in the French capital. Among them were Syria's Bashar al-Assad, Israel's Ehud Olmert and the president of the Palestinian Authority, Mahmoud Abbas.
Libya's Colonel Moamer Gaddafi is the only leader to have boycotted the ceremony, describing the French-inspired project as a new form of colonialism.
The union seeks to "revitalize efforts to transform the Mediterranean into an area of peace, democracy, cooperation and prosperity."
But a draft copy of the declaration, seen by Deutsche Presse-Agentur dpa, shows that several contentious issues still needed to be resolved.
One concerned a paragraph calling for the "condemnation of terrorism in all its form and manifestation and their (leaders) determination to eradicate it and combat its sponsors."
Another addressed a "common aspiration" to "pursue a mutually and effectively verifiable Middle East zone free of weapons of mass destruction, nuclear, chemical and biological."
Assad on Saturday reaffirmed his desire to rid the region of nuclear weapons. Israel is the only Middle Eastern country which is widely believed to have a nuclear arsenal.
Tough discussions were also expected on the exact scope and power structure of the union, which French President Nicolas Sarkozy devised as a means of strengthening relations between the EU and its southern neighbours around the Mediterranean basin.
"They are still working on the exact formulation," Benita Ferrero-Waldner, the EU's external affairs commissioner, said of plans for the project to have a rotating two-year presidency shared by EU and non-EU countries.
The exact location of its secretariat, which would identify and follow up projects that are of common interest to the region, was also unclear.
The Union for the Mediterranean is designed to revamp the EU's 13-year-old southern neighbourhood policy, which is known as the Barcelona Process.
The EU's executive, the European Commission, says it has already spent some 8 billion euros (12.7 billion dollars) on Barcelona between 1995 and 2007, and plans to invest a further 9 billion euros over the next six years.
But officials in Brussels acknowledge that the policy has not been delivering.
"We have done a lot, but the glass is half full. Now we want to see it completely full," Ferrero-Waldner said.
The new union hopes to attract private investors by focussing on concrete projects.
Among them plans for "motorways of the sea", a belt of solar power plants, a programme to help cope with natural disasters and the creation of an agency to promote medium-sized businesses.
Ahead of the launch in Paris, Sarkozy held joint talks with Olmert and Abbas, who spoke of their hopes of moving closer to peace.
The project scored its first diplomatic success on Saturday, when Assad and his Lebanese counterpart, Michel Suleiman, announced after a meeting in Paris that their two countries intended to normalize relations.
"We are learning to like, rather than hate, each other," Sarkozy said ahead of the launch.