Egypt's president says Arab leaders have agreed to form a united military force to combat the "challenges" the region is facing at a conference dominated by a Saudi-led offensive on Houthi fighters in Yemen.

Abdel Fattah el-Sisi made the comment on Sunday at the closing session of a two-day Arab League summit held in the Egyptian resort city of Sharm el-Sheikh.

"Assuming the great responsibility imposed by the great challenges facing our Arab nation and threatening its capabilities, the Arab leaders had decided to agree on the principle of a joint Arab military force," he said.

Sisi has repeatedly called for concerted Arab and Western action against what he sees as an existential threat posed by groups operating in Libya and elsewhere.

In late Februray, he ordered airstrikes in Libya after fighters pledging allegiance to the Islamic State of Iraq and the Levant (ISIL) beheaded 21 Egyptian Christians there.

Sisi says a high-level panel will work under the supervision of Arab chiefs of staff to work out the structure and mechanism of the force.

Egyptian officials said the proposed force would be made up of roughly 40,000 elite troops and backed by jets, warships and light armour.

However, it is unlikely that all 21-member nations of the Arab League will join the proposed force, the Associated Press news agency reported.

Sameh Shukri, Egypt's Foreign Minister said the force would be voluntary and at least two countries were committed to the force.

Iraq, whose Shia government is closely allied with Iran, said more time was needed to discuss the proposed force.

The proposal came as a Saudi-led coalition is pressing ahead with airstrikes against positions of Houthi fighters and their allies in Yemen.