The meetings, which bring together a total of 12 groups, are being held behind closed doors in the headquarters of Egypt's intelligence service and will look to create a new unity government to reunite the Gaza Strip and the West Bank.
An earlier unity agreement collapsed after the United States and the European Union refused to work with Hamas.
"Everyone...is hanging their hopes on you," Egyptian intelligence chief Omar Suleiman told participants at the opening of the conference.
He also urged the groups to "unite ranks to fulfill the hopes of all for an independent Palestinian state." His comments were broadcast on Egyptian television.
Hamas took control of the Gaza Strip in 2007, ousting the Fatah movement from the enclave of 1.5 million. Hamas remains in power in Gaza, while Fatah, headed by Palestinian President Mahmoud Abbas, controls the West Bank. The armed clashes came some 18 months after Hamas had won Palestinian legislative elections.
Fatah has renounced violence, while Hamas refuses to recognize Israel and reserves the right to use violence in its struggle to create a Palestinian state.
The rival movements resumed contact only after the recent three-week long Israeli military operation in Gaza, which left about 1,300 Palestinians dead. The attack was launched in an attempt to halt the firing of homemade rockets by Palestinian militants from the enclave.
On Wednesday, the two groups agreed to exchange political prisoners and to call a halt to media attacks on one another.
The Egyptian resort of Sharm-el-Sheikh is to host an international conference to rebuild Gaza at the beginning of March.
