The Palestinian cabinet will meet later Tuesday and is expected to name a date for the first elections since 2006, government officials told AFP.
Speaking on condition of anonymity they said that mid-July was the most likely date for the local elections, which would probably be limited to the West Bank following the refusal of the Gaza Strip's Hamas rulers to take part.
Local polls were originally set for July 2010 but postponed after the militant Islamic Hamas said it would not participate.
Hamas last week restated its opposition after Prime Minister Salam Fayyad said local polls would be held "this year" and that it was also time to start preparing for a general election.
"The movement will not participate in this farce," Hamas said in a statement in response. "The movement will not recognise the result of this process."
Hamas has refused to recognise the authority of the West Bank-based government of president Mahmud Abbas since his four-year term expired in January 2009 and was then indefinitely extended by his supporters pending new elections.
The Gaza Strip and the West Bank are physically cut off from one another, with Israel lying between them, and are ruled by rival administrations.
Abbas's government called a general election for January 2010 then backed down in the face of refusal by Hamas, which won by a landslide in the 2006 parliamentary race, to organise polling in the Gaza Strip.
Hamas has said there can be no fresh vote without reconciliation with Abbas's Fatah, its bitter rival.
The Islamist movement took power in Gaza in June 2007 when it drove out forces loyal to Abbas in a week of bloody street battles, the culmination of years of struggle between the two main Palestinian movements.