Grand Ayatollah Mohammed Hussein also scoffed at divisions among rival Lebanese factions on whether Lebanon should or shouldn't attend the summit, due in Syria next week.
A Lebanese participation or boycott won't have any effect on the outcome of Arab leaders' talks, said Fadlallah, 72, the top religious authority for Lebanon's 1.2 million Shiites.
His remarks came as the Lebanese government has yet to decide on attending or boycotting the summit scheduled in the Syrian capital, Damascus, on March 29-30.
Fadlallah lamented inter-Arab differences, which he said were reflected by the fact several Arab leaders have questioned whether they would attend or send a low-level representation.
"This (comes) in addition to clear American instructions for an Arab boycott as a punishment for Damascus," Fadlallah told thousands of worshippers at a Beirut mosque in his Friday prayer sermon. He did not elaborate, but his comment appeared to refer to Washington's long-standing hostility to the Syrian regime, accused of backing Iraqi and Palestinian militants.
Given the "collapsing situation" within the 22-member Arab League, Fadlallah said: "this summit, like other Arab summits, cannot achieve any Arab objective in solving any Arab problem."
The meeting could also be an embarrassment to some pro-U.S. Arab nations who have failed to clearly condemn Israel's recent crackdown in the Gaza Strip, Fadlallah said.
Lebanese Prime Minister Fouad Siniora, whose Western-backed government is locked in a yearlong power struggle with the Syrian-backed opposition led by the militant Shiite Hezbollah group, is coming under heavy pressure from his allies in parliament to boycott the Damascus summit.
Some anti-Syrian politicians say Lebanon's participation would be tantamount to an "acquittal of the Syrian regime" over its interference in Lebanese affairs and alleged involvement in assassinations and bombings that have rocked Lebanon for the past three years.
Lebanon's anti-Syrian majority also accuses Damascus of pushing Lebanese opposition lawmakers to obstruct the election of a new president. Syria denies the accusations.
Anti-Syrian factions in Lebanon had been seeking a pan-Arab boycott of the summit for weeks, but apparently failed when Saudi Arabia and Egypt, which back the Siniora government, agreed to attend. However, it is still unclear if the leaders of the two regional heavyweights will show up at the meeting or send lower-level delegates.
Lebanon's Cabinet is expected to reach a final decision next Tuesday on whether it will attend the summit.
Sources: AP