Foreign Minister Syed Hamid Albar, closing a four-day meeting of OIC foreign ministers, said the 31-year-old body must "strike out from our agenda all those items which are outdated, irrelevant, one-sided or which no longer reflect the current situation.
"The title and content of the resolution pertaining to Iraq is one important example to which Malaysia has its own reservations.
"It is sad to see that Muslims themselves knowingly allow the suffering of Muslim brothers, sisters and children to persist, by lending their consent not to lift the sanctions imposed on Iraq," he said in his closing speech.
Iraq had urged ministers to call for a lifting of the United Nations sanctions imposed after its 1990 invasion of Kuwait.
Instead a toughly-worded final communique called on Iraq "not to again use military force or any other forces in an aggressive or provocative manner to threaten its neighbours or UN operations in Iraq."
The communique expressed sympathy for the suffering of the Iraqi people but told Baghdad to resume cooperation with the UN weapons monitoring operation. Iraqi diplomat Sa'doon al-Zubaydi, in comments to AFP, termed the OIC "a corporation owned by Saudi Arabia."
Syed Hamid said the OIC was established to unite Muslim nations but "we seem to have not made any grounds in this respect."
He said it was time for the 56-member body to "emphasise more on issues of common interest rather than those that divide us."
The Malaysian minister urged it to translate all resolutions into practical undertakings.
"The problems of poverty, oppression and suppression in our community need to be overcome. The sufferings or marginalisation of Muslim minorities in non-Muslim countries in Europe, many parts of Asia and Africa still remain outstanding.
"These matters could not be resolved by rhetorical statements. We must work hard towards achieving a lasting solution in order to chart a more respected future and to further enhance our credibility and integrity."
Syed Hamid told a press conference later that disagreement on the resolution on Iraq did not mean the conference was a failure.
"The most important thing that has come out of this meeting is a feeling of unity and solidarity ... we may have some disagreements but the most part of it, the core and fundamental issues are agreed upon.
"We discussed seriously how we should move forward rather than just looking that the OIC cannot be successful."
Malaysia, which last hosted an OIC foreign ministers' meeting in 1974, had tried to focus the meeting on economic issues and the need to reform the OIC itself.
The theme of the conference was "Islam and globalisation." It opened Tuesday with a stark warning from Malaysian Prime Minister Mahathir Mohamad, that Islamic states could end up as "banana republics" unless they acquire the skills to meet the challenges of globalisation and the information revolution. The final OIC communique "stresses the need for effective measures to alleviate the negative impact of the international economic order on the economies of OIC members to guarantee they benefit from globalisation on an equal footing."
It urges a reversal of a trend to "marginalise developing nations" in international decision-making on globalisation and says trade liberalisation "has not been beneficial to the developing countries." It also touches on a host of political issues -- criticising Israeli settlement-building, rapping India for "flagrant" rights violations in Kashmir, attacking Armenian "aggression" against Azerbaijan and calling on Russia to reach a peaceful settlement in Chechnya.