Burma's ruling generals have rejected a UN plan for three-way talks involving detained pro-democracy leader Aung San Suu Kyi, according to state media.
Mr Gambari has not yet met Than Shwe during this visit
Minister Kyaw Hsan told UN envoy Ibrahim Gambari that Burma would not accept interference in its sovereignty.
Mr Gambari arrived in Burma on Saturday for his second visit since protests in September were brutally suppressed.
BBC UN correspondent Laura Trevelyan says diplomats privately admit omens for Mr Gambari's mission are not good.
Publicly, UN officials are saying they cannot confirm the junta's decision to reject the talks proposal, according to our correspondent.
UN Secretary General Ban Ki-moon has expressed concern at the lack of progress being made with the junta.
On a previous visit, Mr Gambari held talks separately with junta head General Than Shwe and Ms Suu Kyi.
Although he is expected to meet Ms Suu Kyi again before concluding his visit on Thursday, Mr Ban said there had been no further meeting with General Than.
During a meeting with Information Minister Mr Kyaw, Mr Gambari reportedly offered to mediate in talks between Ms Suu Kyi and Aung Kyi - a junta official who was appointed to liaise with Ms Suu Kyi.
According to the state-run New Light of Myanmar newspaper, Mr Kyaw told him: "Currently, the tripartite meeting will not be possible."
The paper, which is a mouthpiece for the junta, carried a four-page article addressed to Mr Gambari from Mr Kyaw which it called a "clarification".
"We will welcome positive co-ordination and co-operation for Myanmar [Burma] affairs, but will never accept any interference that may harm our sovereignty," the article stated.
"I would like you to know that Myanmar is a small nation and if a big power bullies her with its influence by putting Myanmar's affairs on UNSC [UN Security Council], we will have no other way but to face and endure."
Widespread protests broke out across Burma during September. In response, the military regime detained at least 3,000 people and opened fire on crowds, with dozens feared dead.
On Wednesday, the Burmese authorities said all but 91 of those detained in the aftermath of the protests had now been freed.
Human rights groups say at least 600 are still in jail.