The main Palestinian factions have opened talks in Cairo aimed at getting militants to agree a fully-fledged ceasefire with Israel.
Hamas insists Israel must release thousands of Palestinian prisoners
The Hamas group has so far resisted, but it may be willing to continue an informal lull in attacks, say analysts.
Palestinian leader Mahmoud Abbas said before the talks that Israel should not delay over its ceasefire commitments.
Israeli PM Ariel Sharon said earlier a truce was not a solution and called for the dismantling of militant groups.
The negotiations, which began on Tuesday evening, are part of a long-running dialogue in which Hamas is pressing for a greater say in Palestinian decision-making.
Another important area of debate will be questions regarding the management of the Gaza Strip after the planned withdrawal of Israeli troops and settlers this summer.
It is more than a month since Mr Abbas and Mr Sharon agreed on a ceasefire at the Egyptian resort of Sharm al-Sheikh - a vital first step towards a resumption of the peace process, says BBC correspondent Alan Johnston in Gaza.
But Hamas and other Palestinian factions have refused to endorse the truce, saying Israel has not done enough to warrant a full ceasefire.
Hamas insists Israel must free more than 7,000 Palestinian prisoners and end its policy of targeted killings of militants.
Speaking before Tuesday's meeting, Mr Abbas said Israel should honour its commitments and not expect any unilateral steps from the Palestinians.
"We reject implementing unilateral commitments and at a time when we are on the way of achieving calm and a truce, we warn against any Israeli dawdling in implementing their commitments," he said.
But Mr Sharon said a ceasefire being discussed in Cairo was not enough for Israel.
"The more Abu Mazen [Mr Abbas] delays the dismantling of the terrorist organisations, the more trouble he will have doing it in the future," he said on Monday.
Palestinian Information Minister Nabil Shaath called Mr Sharon's intervention an attempt to derail the Sharm al-Sheikh agreement.
"A ceasefire is produced by inter-Palestinian agreement, not inter-Palestinian fighting. Israel tried to achieve a ceasefire through shelling, killing and assassination, leading to huge losses on both sides," Mr Shaath told al-Jazeera television.
Israel has meanwhile said it will hand over the sleepy West Bank town of Jericho to Palestinian control on Wednesday - with Tulkarm following a few days later.
The announcement was made after talks between Israeli Defence Minister Shaul Mofaz and Palestinian Interior Minister Nasser Yousef.
Discussions have gone on for weeks over maps of Jericho
The handover has been delayed for weeks by disagreements about the exact size of the territory to be transferred to Palestinian control.
The compromise is said to have been achieved after Palestinians agreed that Israel could keep a roadblock at the entrance to Jericho for another month.
Israel has warned the Palestinians not to release militant leader Ahmed Saadat and former official Fuad Shobaki, who are both jailed in Jericho.
Mr Abbas was quoted earlier as saying he intended to free Saadat - accused of the ordering the killing of an Israeli minister in 2001 - and Shobaki - accused of arms smuggling - after the troops leave.
The security handover of five West Bank towns - the others being Ramallah, Bethlehem and Qalqilya - was a key plank of the agreement at Sharm al-Sheikh.