The "Twelve Cities" are mentioned several times in the movie. The Book of Peace is needed to protect these cities, but which cities exactly are they? It's safe to say that Syracuse is one of them, but what are the other eleven?
Is "Twelve Cities" a reference to anything real or mythical?
At least one of the ambassadors is from Thrace, the largest city of which (in the ancient world) would be Constantinople.
Proteus: Sinbad, I would like to introduce you to my fiancee, the Lady Marina, Ambassador from Thrace.
The others aren't named at all. Based on how cosmopolitan the Council looks (Nordic, Asian, Chinese, etc) it's likely that they're intended to represent a grab-bag of unnamed famous historical world cities.
The film's concept art mentions that Syracuse regularly receives visits from ships found in the regions around Arabia, Malta, China, Spain, Egypt, India, Finland and Turkey (e.g. the Mediterranean, Red Sea, Arabian Sea, Adriatic Sea, South China Sea, Nile, Indian Ocean, Black Sea and Baltic Sea).
No specific mention of which cities these regions represent, but I think we can reasonably assume that the likes of Athens, Memphis, Mecca, Constantinople, Beijing, Damascus, etc would be among the 'twelve cities'.
I agree with @Valorum that these might not be real places and we aren't told where they are in the story.
However, the "original" Sinbad story mentions a number of places that he visits in the 7 voyages. I found a version (in THE WINDERMERE SERIES The Arabian Night Entertainments, published 1914 by Rand McNally) on Project Gutenberg (hyperlink directly to Sinbad stories), and used that to create this list of places mentioned:
Voyage 1
Baghdad -> Indies via Arabia Felix (present day Yemen) and Persia (Iran). Visits "Cassel" and returns to "Bussorah (probably Basra, in Iraq)
Voyage 2
Departs Baghdad (no destination mentioned). Visits island of "Roha" which has rhinoceros and elephants (maybe Sumatra or Java?, but could be anywhere in Africa or India/South Asia). Lands at Bussorah again and returns to Baghdad
Voyage 3
Departure location not mentioned. Visits island of "Salabut", which has sandalwood. This might be Indonesia somewhere as sandalwood is found there. Lands at Bussorah again, returns to Baghdad
Voyage 4
Departs Baghdad, travels via Persia. Visits "Serendib" (Sri Lanka), also islands of "Kela" and "Bells" (lead mines and camphor, so SE Asia).
Voyage 5
Travels to "Comari" (perhaps Comoros Islands), but this island has pearls as mentioned in the story, so perhaps somewhere in Persian gulf or Philippines.
Voyage 6
Travels via Persia and Indies. Visits island with "fountains of pitch or bitumen and wood of aloes". Wood of aloes is found all over SE and S Asia. Visits Serendib again and becomes ambassador between Serendib and Baghdad (as the capital city of the Caliphate under Harun al Rashid, during whose reign the story is set).
Voyage 7
Mentions imports from Cairo, Suez and Alexandria. Travels with monsoon winds, so likely near India - Sri Lanka being Serendib is most likely.
So locations list is:
This makes 13 locations that can be identified as distinct, though Basra and Baghdad are both in the same country in the time-line of the story, as are the last 3 in Egypt. These locations all seem to likely to be in Southern to South-Eastern Asia, Africa, or Arabia.
Most of these locations have a king/ruler who lives in a city at the location mentioned in the story, so these could be island kingdoms, which were common at the time of writing.
The list, if you remove Baghdad as that's where Sinbad comes from, totals 12 other locations, so perhaps that's where the Legend of the 7 Seas' writers got the idea.
I'm aware that none of this lines up with the answer from Valorum, just wanted to supply an answer based on (a version of) the "real" story.
@M.A.Golding has commented that at least half of these cities are in the Caliphate at the time of Harun al Rashid, but it is my belief that much of these were conquered cities (e.g. those in Egypt) and as such ruled by administrators from the Caliphate and paying tribute directly to the Caliph; which would have meant ambassadors to fill the role of offering this tribute.
