In addition to the $2.2 billion in assistance Japan pledged for the Middle East two years ago, Abe said his government would provide another $2.5 billion in non-military assistance in fields such as humanitarian assistance and infrastructure.
"The Middle East ... that's the region endowed with great possibilities," said Abe, whose tour will also include Jordan, the Palestinian territories, Lebanon and Turkey.
"And yet now it appears to be no exaggeration to say that the region is exposed to a challenge that is among the most serious in its modern history."
The Japanese leader stressed the need for economic growth in the Middle East, where militants often try to exploit frustrations with issues such as unemployment and neglected schools to gain recruits.
Security crackdowns alone have failed to defeat militancy in Egypt, the most populous Arab country, and other states as well.
Japan will provide Egypt with $360 million in loans for projects including an airport and a power grid in a country suffering from an energy crisis, Abe said.
"These are intended to contribute to Egypt's development, and by extension, to widening the foundation for stability across the entire region," he added.
Aside from tackling Islamic State, the region and Western leaders also face the daunting task of securing serious progress on the Israeli and Palestinian front.
"Japan believes that the day will come in the near future when we can recognize Palestine as a state," said Abe.
"In order for that day to arrive sooner, we will appeal to both Israel and Palestine to resume negotiations to advance the so-called two-state solution."