Diplomats and international officials are discussing a “New Deal” for Somalia, which should see hundreds of millions of dollars pledged for the country after two decades of conflict.
The European Union (EU)-backed conference is being held in Brussels.
Al-Qaeda-linked al-Shabab dismissed the meeting as “Belgian waffle”.
Al-Shabab is fighting to oust Somali President Hassan Sheikh Mohamud’s government, the first to be recognised by the US in more than 20 years.
The group controls most of southern Somalia, but it has been driven out of the main cities and towns, including the capital Mogadishu, by an African Union (AU) force backing the government.
Mr Mohamud told the BBC Somali service he welcomed the proposed New Deal.
“It’s a standard deal throughout the world in the post-conflict environment. This is a deal that is based on Somalia-led initiatives,” he said.
The UK’s ambassador to Somalia, Neil Wigan, said the conference was “a major milestone”, AFP news agency reports.
Diplomats were hoping to see more than $1bn (£600,000) in pledges to help rebuild Somalia, widely regarded as a failed state with little infrastructure, it reports.
“Our combined efforts will maintain momentum and deliver the change that the people of Somalia desperately need,” Mr Wigan is quoted as saying.
Al-Shabab said it expected donor pledges would remain mostly unfulfilled or the money would be lost in corruption.
“It’s a bit like Belgian Waffles: sweet on the outside but really has not much substance to it,” it said on its Twitter account.