China wants a bigger role in the Middle East. But not too big.

Chinese leader Xi Jinping hosted senior officials from Arab nations—including the leaders of Egypt and the United Arab Emirates—for a China-Arab states conference in Beijing on Thursday. With the Biden administration facing heavy domestic and international criticism over its handling of the Gaza war, China sees an opportunity to promote its brand of foreign policy to leaders in the region.

But, despite the blowback against the U.S. over its support for Israel, the Gaza conflict has shown that Washington remains the preeminent foreign power in the Middle East. A year after brokering a landmark deal between Iran and Saudi Arabia, Beijing has been on the outside of negotiations over a Gaza cease-fire and has stayed on the sidelines as a crucial trade route through the Red Sea comes under fire.

Its main tool for gaining clout has been a willingness to invest, particularly in the energy sector. And it has benefited from an Arab world eager to use its relations with China as leverage against Washington—often to regional leaders’ frustration.

In opening a Thursday conference between China and the 22-nation Arab League, Xi used his keynote speech to press home his position on the Gaza conflict. He also harked back to longstanding trade ties along the ancient Silk Road, promising to help his guests boost economic development and bring peace to the region.

“In this turbulent world, peaceful relations come from mutual respect, and lasting security is built on fairness and justice," Xi said, restating China’s support for an international peace conference to end the war in Gaza and the establishment of an independent Palestinian state alongside Israel.

“Justice should not be absent forever. Commitment to the two-state solution should not be wavered at will," he said.

China has increasingly positioned itself as a benevolent force in Middle Eastern affairs, one that acts responsibly in trying to calm regional tensions—in contrast with the U.S. and other Western powers that Beijing accuses of exacerbating local conflicts.

Chinese officials have leaned more heavily into this role since the Gaza war broke out last year, intensifying a diplomatic outreach to the Arab world.

Resentment in the Middle East over Washington’s backing of Israel provides an opening for China to deepen ties with traditional American partners in the region such as Egypt and the United Arab Emirates, analysts say. The question is how far China is willing to go, and what risks it is willing to take, to exert its influence.

Beijing has shown little interest in displacing Washington as a political and security force in the region, said Steven Wright, an associate professor of international relations at Qatar’s Hamad Bin Khalifa University.

“Instead, it is more about economics and a development-first agenda," Wright said.

The absence of a Chinese military response to attacks by Yemen’s Houthi rebels on ships in the Red Sea underscored the fact that Beijing won’t replace Washington as a security guarantor in the Middle East. The U.S., in contrast, has launched a series of airstrikes against the Houthis in response to the attacks.

China is “a different type of great power—than the U.S.—in the region," said Dawn Murphy, an associate professor at the National War College in Washington. “China sees one of its strongest features as a great power is the fact that it has positive relations with all countries" there.

That approach hasn’t played as well in Israel as Beijing might have hoped, according to Dr. Avner Golov, the vice president of Mind Israel, an organization that provides consultation to Israel’s national-security establishment and decision-makers.

While the U.S. response to the Red Sea attacks “showed its ability to back its allies and mobilize forces quickly and get results," the Chinese reaction revealed the constraints on Beijing’s clout, Golov said.

In his Thursday speech, Xi doubled down on promises of economic cooperation with Arab states, including investments in energy, finance, food security and artificial intelligence—channeled through his signature Belt and Road Initiative to develop global trade infrastructure.

Xi also pledged to donate 500 million yuan, or roughly $69 million, to support humanitarian efforts and postwar reconstruction in Gaza, in addition to a package of 100 million yuan that China committed earlier.

Arab nations collectively count China as their top trading partner, with two-way trade reaching $398 billion in 2023, up from $36.7 billion in 2004, according to Chinese state media. All 22 members of the Arab League have signed agreements to cooperate with Beijing on the Belt and Road Initiative.

Beijing’s ambitions in the Arab world have expanded beyond trade in recent years. In addition to brokering the surprise detente between Saudi Arabia and Iran in 2023, Chinese officials have courted Muslim-majority nations in the Middle East to temper international criticism of the Communist Party’s efforts to forcibly assimilate Muslim minorities in the northwestern region of Xinjiang.

More recently, in April, Beijing hosted representatives from rival Palestinian groups, the hard-line Islamist group Hamas and the largely secular Fatah, for talks on a possible reconciliation. At the time, a Chinese Foreign Ministry spokesman said the two groups expressed a desire to reconcile and continue their dialogue to achieve Palestinian unity.

The meeting didn’t yield progress, and China was the latest in a series of unsuccessful mediators on Palestinian reconciliation, including Russia.

Xi himself sat down with Egyptian President Abdel Fattah Al Sisi on Wednesday, with both leaders agreeing to work together to resolve the Gaza conflict. Sisi’s Beijing visit comes amid strained ties between Egypt and Israel over the latter’s military offensive against the southern Gaza city of Rafah. Cairo has been considering a downgrade of diplomatic ties with Israel, having signaled that it would join South Africa’s court case accusing Israel of genocide.

Following Thursday’s conference, China and the Arab League issued a joint declaration that called for a cease-fire in Gaza, advocated implementing the “two-state solution" to resolve the Palestinian issue, and criticized the U.S. for blocking attempts to give the Palestinians full membership in the United Nations.

Experts on Chinese foreign policy say Beijing’s diplomatic gestures on Gaza help boost its image as a responsible global power, though such efforts have done little to help resolve the decadeslong conflict between Israel and the Palestinians.

“With the Israel-Hamas war, I think China’s assessment is, even if they applied pressure to Israel or to Hamas or to Iran, they wouldn’t have the ability to actually impact events on the ground," said Murphy of the National War College.

Deng Li, a Chinese vice foreign minister, laid out Beijing’s hands-off approach at a Monday briefing ahead of this week’s conference.

Beijing believes that “the masters of the Middle East are the people of this region, and the problems of this region must be solved by the people of this region," Deng said.

Dov Lieber and Jared Malsin contributed to this article.

Write to Chun Han Wong at chunhan.wong@wsj.com