UAE President Sheikh Mohammed bin Zayed Al Nahyan greeted Britain's King Charles III, Indian Prime Minister Narendra Modi, French President Emanuel Macron and other leaders at the sprawling Expo City Dubai complex in the sun-soaked Gulf metropolis.

The COP28 conference kicked off on Thursday with an early victory as nations agreed to launch a "loss and damage" fund for vulnerable countries devastated by natural disasters.

But delegates face two weeks of tough negotiations on an array of issues that have long bedeviled climate talks, starting with the future of oil, gas and coal.

A first draft of the agreement being negotiated by nearly 200 countries includes language on a "phasedown/out" of fossil fuels, which account for the bulk of greenhouse gas emissions.  

The sense of urgency was heightened by a UN warning that 2023 is on track to become the hottest year on record, raising fears the world will not meet the goal of limiting warming to 1.5 degrees Celsius.

"Now the real work only begins," the oil-rich UAE's COP28 president Sultan Al Jaber said on Thursday.

"I will be rolling up my sleeves, engaging and helping address this challenge and delivering real, actionable results," Jaber said, though he claimed there was "positivity" and an "optimistic" vibe following the loss and damage announcement.

Jaber, who heads the UAE's national oil firm ADNOC, said the "role of fossil fuels" must be included at the UN's climate talks.

The draft text sets up a fight between those calling for a "phaseout" and those in favour of a less drastic "phasedown" of fossil fuels. But observers said the inclusion of such language was significant.

"It is more ambitious than anything ever tabled at COP27 [talks in Egypt last year], so even having it among the options is a big step up," said Lola Vallejo, an expert from French climate think tank IDDRI.

The spotlight now turns to more than 140 kings, presidents and prime ministers who will address delegates on Friday and Saturday.

Britain's King Charles III will kick off those addresses, followed by leaders from nations including the likes of Brazil, Kenya and Tonga.

But the climate crisis will share the agenda with the conflict in Gaza.

Israeli President Isaac Herzog met his UAE counterpart Sheikh Mohammed on Thursday and will be among the speakers addressing the COP28 conference on Friday.

Palestinian president Mahmud Abbas had also been scheduled to speak but his office told AFP that he was no longer going and his foreign minister would be in Dubai instead.

The conference began on Thursday with a moment of silence, at the request of the Egyptian head of last year's COP, for the civilians who have died in the conflict.

The war began on October 7 when Hamas and other militants from Gaza poured over the border into Israel, killing around 1,200 people, mostly civilians, and kidnapping about 240, according to Israeli authorities.

Aiming to destroy Hamas, Israel retaliated with an air and ground offensive that the Hamas government in Gaza says has killed more than 15,000 people, also mostly civilians, and reduced large parts of the north of the territory to rubble.

Herzog is using his COP28 visit for a diplomatic push to secure the release of hostages held by Hamas.

He "appealed" to his Emirati counterpart "to employ his full political weight to promote and speed up the return home of the hostages," the Israeli president's office said.

US Vice President Kamala Harris, who will represent the United States at COP28, will meet with regional officials on the Israel-Hamas conflict, according to the White House.

As part of a week-long pause in fighting, Hamas freed dozens of hostages taken during last month's attack on Israel in exchange for the release of more than 200 Palestinian prisoners being held in Israeli jails.