Presidents, kings and sheiks from across the world of Islam began gathering here today for a summit conference at which Saudi Arabia hopes to reassert its dominance in what is potentially one of the world's major power blocs.

Iran and Libya, one of Saudi Arabia's strongest rivals, are boycotting the 38-member summit conference, the largest ever held by the Islamic Conference Organization.

While pointing up the divisions within the Islamic world, this boycott also has given the Saudis the opportunity to put their policy imprint on an event they see as symbolizing hopes for greater solidarity among the world's 750 million Moslems and the resurgence of Islam as a political and moral force in international politics.

Saudi Foreign Minister Prince Saud already has indicated here that he views the Islamic Conference as more representative of Third World interests than the nonaligned bloc, presently under the chairmanship of Cuba. This may herald a Saudi attempt to parlay its oil and religious power into a drive to build the conference into a rival organization, a step that no doubt would please Washington.

But the conference, and the forces it represents, are somewhat of a mixed blessing for the West.

On the one hand, the organization has taken a very strong stand against the Soviet Invasion of Afghanistan and could serve in coming years as an important bulwark against Soviet expansionism in the Persian Gulf and Middle East.

On the other hand, the conference's two overriding concerns are a homeland for the Palestinians and the return of Jerusalem to Arab control. Its mobilization on behalf of these issues has placed the West under growing pressure to resolve them or face the economic consequences, including a possible reduction in its vital oil supplies.

The opening session is to be held in the Grand Mosque of Mecca, where the Islamic leaders will kneel Sunday to pray together.

As of now, 21 presidents, four kings and four ruling sheiks are expected to attend the summit. Eight other Islamic nations have sent high-ranking envoys and the Palestine Liberation Organization is a full participant, for total representation of 38 members.

Nigeria, which also has a very large Moslem population, is an observer as are U.N. Secretary General Kurt Waldheim, who is to address the conference Monday; Sheik Mojadidi, anAfghan rebel leader, and several Moslem nationalist groups.

Since the Soviet invasion of Afghanistan, which drew strong condemnation by the Islamic Conference a year ago, the Kabul government under the Soviet-backed leadership of Babrak Karmal has been suspended from the organization. So, too, has Egypt, as punishment for signing the Camp David accords and peace treaty with Israel.

The biggest disappointment to conference organizers is Iran's refusal to send a delegation because of the presence here of Iraqi President Saddam Hussein, whom Iran has branded an "infidel."

The absence of Iran, like that of Egypt and Afghanistan, will stand as a sore reminder of the political divisions afflicting the Islamic world despite the unifying force of religion.

Libya also will boycott the conference, possibly because host Saudi Arabia has broken relations with it. Significantly, although they sent a delegation to attempt to persuade Iran to attend the conference, no special effort has been made by the foreign ministers to get Libyan leader Muammar Qaddafi to attend.

A document approved by foreign ministers earlier in the week, known as the Mecca Declaration, is understood to outline a pan-Islamic strategy to deal with such thorny issues as self-determination for the Palestinians and the restoration of Arab control over Jerusalem, and little controversy is expected over its adoption by the summit.

The only real issue is what, if any, additional concrete steps the Islamic nations should to take against the supporters of Israel to press Moslem demands.

Saudi Crown Prince Fahd has renewed his call of last August for a jihad, or holy campaign, against Israel, suggesting that a tougher position might be taken here against Israel's Western allies.

Saudi leaders stress that what they mean is not primarily a war of arms against Israel or the use of the "oil weapon" against its supporters. But Fahd recently told the Saudi newspaper Al Riyadh, "We are for an all-out holy Islamic struggle in all aspects, with speech and all the resources of the media, with men, material, with knowledge and with weapons."

With Egypt, Iran and Libya absent, the only other potentially contentious issue facing the Islamic leaders appears to be Afghanistan and what further steps to take to end Soviet involvement there. Pro-Soviet Arab countries such as South Yemen and Syria as well as the PLO have broken with the Islamic Conference consensus by supporting or condoning the Soviet invasion, but they are a small minority.

The conference is expected to discuss a draft plan to neutralize Afghanistan, establish a government of national unity including all factions and organize elections. The plan has been passed to the Soviets for study but their reaction is said to have been negative.

The conference was founded in September 1969 when 25 Islamic leaders met in Rabat, Morocco, in response to the burning of the Al Aqsa Mosque in Jerusalem. Since then, it has grown steadily if slowly in size and importance, emerging today as a different kind of Third World forum from either the more radical nonaligned bloc or the faction-ridden Arab League.

Based on a rather vague notion of Islamic solidarity, it has been dedicated to three main causes: the revival of Islam and greater unity among Islamic nations; the return of Jerusalem to Arab Moslem control and promotion of the Palestinian cause.

The Islamic conference has spawned a number of subsidary organizations, including an Islamic Secretariat, a Foreign Ministers' Conference, an Islamic Solidarity Fund, the Islamic Development Bank and an Islamic News Agency.