"I believe the greatest threat to Muslims today comes not from the outside world, but from within," he told the UN General Assembly.
Najib voiced outrage at violence between the Sunni and Shiite sects in Syria, Iraq and Pakistan, noting that nearly 5,000 Muslims died in conflict in the three countries in the holy month of Ramadan.
"It is time to end the killing and concentrate instead on building a common agenda for peace and prosperity," he said.
"Our task is to reclaim our faith by articulating clearly the true nature of Islam -- the religion of peace, of moderation, of tolerance," he added.
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Najib said he was committed to "mutual respect and inclusivity" in Malaysia, which is more than 60 per cent Muslim ethnic Malay with sizable Chinese and Indian minorities.
Malaysia is generally known for its moderate form of Islam, although conservatives have occasionally banned concerts by Western artists and tensions have risen over custody of children whose religion is disputed.
US President Barack Obama, who has been seeking greater ties with Southeast Asia, will travel to Malaysia next month on the first visit by a US leader to the country since 1966.