The talks, to begin on Tuesday, will see five Muslim leaders and five Vatican representatives come together to discuss the plans for a larger meeting later on this year, to be joined by Pope Benedict.
"We have to bring the dialogue up to date following the great successes of the pontificate of John Paul II," said Yahya Sergio Yahe Pallavicini, vice-president of the Italian Islamic Religious Community.
Catholic-Muslim relations took a tumble in 2006 after Pope Benedict made an unpopular lecture in Regensburg, Germany, which caused huge offence to Muslims who interpreted it to mean that Islam was a violent and irrational religion. Although the Pope apologised for the offence he had caused, he held back from making a full apology.
The Pope extended an olive branch by visiting Turkey's Blue Mosque and prayed with its Imam in the direction of Mecca. In 2007, 138 Muslim scholars wrote a letter to the Pope and other Christian leaders in which they said world peace depended on the two faith communities being at peace with one another.
In "A Common Word Between Us and You", the Muslim leaders added, "Our common future is at stake. The very survival of the world itself is perhaps at stake."
"Now there is a need for deeper dialogue on doctrine, theology and the character of religions in today's world and the challenges we face," said Pallavicini.
"We must try, together with the Pope, to get on a path of dialogue on issues confronting humanity today," he said.
Pallavicini expects terrorism to be high on the agenda when the larger meeting takes place either at the Vatican before the summer or at the Pope's summer residence south of Rome in August.
"Terrorism is one thing that has to be discussed," he said. "All religious leaders must renew a message of peace in their faith. Then it will be easier to isolate extremists and avoid the wrong use of religion."
Among the Vatican officials joining Tuesday's talks is Cardinal Jean-Louis Tauran, head of the Vatican's Council for Interreligious Dialogue, the head of the Pontifical Institute of Arab and Islamic Studies in Rome and a professor from Rome's Gregorian University.