A key Palestine Liberation Organisation body began talks on Saturday after Israel pulled out of US-sponsored peace negotiations in response to a Palestinian reconciliation deal with Hamas.
The meeting of the PLO's Central Council at its West Bank headquarters in Ramallah started shortly after 0800 GMT.
A member of the Islamist movement Hamas was attending the meeting and Palestinian Authority president Mahmud Abbas was expected to deliver a speech during the opening session.
The council had called the meeting over the crisis in negotiations, but will also discuss the deal struck Wednesday between Hamas, which rules the Gaza Strip, and Fatah, a key PLO faction.
Israel suspended the peace talks over the deal, saying it would have no dealings with a Palestinian government backed by Hamas, which is pledged to the destruction of the Jewish state.
Israel and the United States had been hoping to extend the faltering peace talks beyond their April 29 deadline, but the efforts hit a wall last month when Israel refused to release a final batch of Palestinian prisoners.
The Palestinians retaliated by applying to adhere to 15 international treaties and then Abbas, who also heads the PLO and Fatah, listed conditions for extending the talks beyond the deadline.
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Abbas said he would agree to an extension if Israel freezes settlement construction in the occupied West Bank and annexed east Jerusalem, frees the prisoners and begins discussions on the future borders of a promised Palestinian state.
Israel dismissed the conditions.
In the unity deal penned this week, the rival Palestinian factions agreed to bury their differences and establish a "national consensus" government under Abbas within weeks.
The move infuriated Israel, which said it would "not negotiate with a Palestinian government backed by Hamas, a terror organisation that calls for the destruction of Israel".
Israel also vowed unspecified "measures" in response.
On Friday, State Department spokeswoman Jen Psaki said US efforts to broker a peace deal had not failed, but were currently in a "holding period" as Palestinians and Israelis decide their next move.
She noted Abbas had insisted that any government formed with Hamas backing would "represent his policies, and that includes recognition of Israel, commitment to non-violence, adherence to prior agreements and commitment to peaceful negotiations toward a two-state solution."
Palestinian prime minister Rami Hamdallah told Abbas on Friday that he would resign if the president deemed it necessary for the formation of the new unity government, official Palestinian news agency Wafa reported.