The Palestinian Authority on Tuesday accused Hamas of holding secret talks with Israel that would endorse the separation of Palestinian territories.
Arab and Turkish media have carried reports, picked up by Israeli media, claiming Israel and the Palestinian Islamist movement that rules the Gaza Strip were holding talks.
The talks were reportedly aimed at reaching an eight- or 10-year truce, with Israel removing its blockade on the coastal Palestinian territory.
Israel on Monday denied it was engaged in "any meetings with Hamas, neither directly, nor via other countries or intermediaries".
But the Authority weighed in on Tuesday, insisting there were talks that would cause Palestinian disunity.
"There have been negotiations and they are on the verge of reaching an agreement about a truce of eight to 10 years," Palestinian foreign minister Riad al-Malki said.
The agreement would see Israel lift its blockade of Gaza and "allow maritime passage" to nearby Cyprus, Malki told France 24 television.
"We don't know if it will happen tomorrow or in a month," he said, adding that "there are mediators who are doing their utmost to reach this agreement."
The Fatah party of Palestinian president Mahmud Abbas, Hamas's rival, said former British prime minister Tony Blair was acting as a mediator in the talks.
"The Hamas-Blair agreement ... paves the way for division and the isolation of the Gaza Strip," said Fatah spokesman Ahmed Assaf.
This, he added, would help "Israel to achieve its goal of preventing the creation of a Palestinian state based on the 1967 borders" and including Gaza, the West Bank and east Jerusalem, he told Palestinian radio on Monday night.
Since 2007, Gaza and the occupied West Bank have been under the control of the rival administrations of Hamas and Fatah, respectively.
In Gaza, Hamas number two Ismail Haniya once again rejected any possibility of a Palestinian state in Gaza alone.
Hamas sources recently admitted an "exchange of ideas" via third parties, but officials have told AFP on condition of anonymity that the topics discussed were "solely humanitarian, not political".