Abdullah opened the 22-member gathering stressing the need for a "two-state solution", - but King Salman went further, underscoring his nation's insistence on the establishment of a Palestinian state "with East Jerusalem as its capital".
The king also vowed to donate $150 million to the program of the Islamic Religious Endowments in Jerusalem, and another $50 million to UNRWA for Palestinian refugees relief.
The summit, which was attended by sixteen Arab leaders, comes one day after the US, France and the United Kingdom launched joint airstrikes on Syria in the wake of a suspected chemical attack by the Syrian regime forces.
The 29th session of the Arab Summit has a significant importance due to the hectic changes in the region following the US-led airstrike against the regime of Syrian President Bashar al-Assad, the December decision of US President Donald Trump to move the US Embassy to Jerusalem and the Houthi aggression against the Saudi national security.
"East Jerusalem is an integral part of the Palestinian territories", he added. The decision sparked outrageous protests in Palestine and across the world.
Israel occupied mainly Palestinian east Jerusalem in the 1967 Six-Day War and later annexed it in a move never recognised by the global community.
UNRWA, which provides aid to more than three million people, has been facing serious financial difficulties after the USA announced it was cutting its funding of the organisation.
The "Gulf Shield 1" was held over a month in the Eastern region of Saudi Arabia, with the participation of units from the Jordan Armed Forces- Arab Army and military forces from 24 Arab and friendly countries. The two regional titans back opposing sides in a range of hotspots across the Middle East, including Lebanon and Syria and in Saudi Arabia's southern neighbour Yemen.
In February, Russia vetoed a Security Council resolution that would have expressed concern over Iran's failure to block supplies of missiles to Yemen's Huthi rebels.
Among the leaders in attendance was Sudan's Omar al-Bashir, who walked the red carpet and was greeted by King Salman. Syria has been suspended from the pan-Arab body since 2011 over the regime's actions in the war.
His Majesty King Abdullah and Saudi King Salman Bin Abdulaziz, along with several Arab and foreign heads of state, on Monday attended the conclusion of the Joint Gulf Shield 1 drills.