"It was a mortar round that landed near the (Iranian) embassy. There are no casualties," though some of the windows of the embassy were broken, a police official said.
The blast was heard at around1:40 pm(1040 GMT) and took place in the Salhiyeh neighbourhood of centralBaghdad.
As smoke billowed into the sky, security forces members, military vehicles and firefighters were seen heading to the site of the blast.
Deputy National Security Adviser Safa Hussein told AFP before the summit that the most likely form of attack during the summit was "indirect fire," referring to mortars or rockets.
The blast came despite strict security measures by the Iraqi government, which had 100,000 security forces members on alert inBaghdad, and effectively locked down the city, closing swathes of roads, shutting down air space and cutting mobile phone networks.
It came as the the first Arab summit to be held in Iraq in 22 years opened in the former Republican Palace in Baghdad.