"We should tell our Arab friends that ... there is a process of political stabilisation guided by the UN and that we need a commitment on the ground from Muslim nations," Frattini said in an interview with a leading Italian newspaper.
"We have to seek a gradual transition from the present multinational force to majority Muslim multinational contingents," he told Corriere della Sera.
Frattini also said he favoured the inclusion of radical Iraqi Shiite cleric Moqtada Sadr in a US-proposed international conference on Iraqi elections scheduled to take place in Egypt next month.
"I believe it would be better to get him on board, as even by talking to non-terrorist radicals we bring about the isolation of terrorists," he said.
"I think that Sadr, despite the dreadful acts of his militia, is not a vulgar terrorist, but rather someone who lacks political legitimacy," he added.
US Secretary of State Colin Powell unveiled plans for the conference last week amid mounting expressions of skepticism among world leaders that the security situation in Iraq would permit nationwide elections to go ahead as planned by the end of January.
Frattini said that any future decision to withdraw Italian and other foreign troops from Iraq could only be weighed in the light of this commitment.
Frattini also said Rome would keep its forces in Iraq until their mission was complete.
But he did not rule out the possibility of a withdrawal at the end of 2005, when according to the UN timetable there will be a representative government and an elected parliament in place.
"It is impossible to set a date or to say that there will be automatic decisions. The important thing is to complete our mission," he said.
Deputy Minister Gianfranco Fini said Saturday that foreign troops would no longer be necessary in Iraq once elections had been held.
Italy, which currently has 3,000 soldiers and police serving in Iraq, said on Sunday that it supported the international conference on Iraq.