"We are undergoing very serious negotiations with Hamas," said Palestinian Foreign Minister Nabil Shaath. "We'd like to see Hamas and other Palestinian factions commit themselves to a full cease-fire, leading to a full peace."
The Egyptians told militia leaders they have American guarantees that Israel will halt targeted killings of Palestinians suspected of involvement in violence, participants in the talks said.
The armed groups have said they will only consider laying down their arms if Israel promises to halt military strikes, including targeted killings.
Officials at the U.S. Embassy in Tel Aviv declined comment on whether Washington has given such guarantees. CBS News Correspondent Robert Berger reports U.S. envoy John Wolf was meeting Israeli officials Monday to discuss implementation of the peace road map plan.
Later Monday, Palestinian Prime Minister Mahmoud Abbas was to hold talks with militia leaders in Gaza. Abbas has said that he would not use force to dismantle the groups, for fear of triggering a civil war.
Israeli Prime Minister Ariel Sharon reiterated Sunday that there will be no blanket promises. Sharon said Israel would not initiate military strikes in the event of a cease-fire, but would continue targeting "ticking bombs," a term widely understood as referring to militants about to carry out attacks.
However, Israeli officials later said Sharon is defining "ticking bombs" much more broadly and that it includes those who send bombers and other attackers. This would lower Israel's threshold for continuing with targeted killings.
Israeli Foreign Minister Silvan Shalom on Monday rejected the idea of a deal with Hamas, saying Palestinian security forces have to dismantle militias, as required by the U.S.-backed plan, which would lead to Palestinian statehood by 2005.
Shalom said a truce would simply allow militant groups to recover from Israeli strikes and gain strength. "We can't accept this (a cease-fire)," Shalom told Israel Radio.
Palestinian Authority officials said Monday they expect a cease-fire to be declared soon, and sources close to the talks said such an announcement could be made within 48 hours.
"We are optimistic about reaching an agreement," said Palestinian Information Minister Nabil Amr, but declined to say how soon it would be reached.
There were conflicting reports on whether the Egyptians are proposing an open-ended truce or a limited cease-fire for several months. Going into the talks, leaders of Palestinian factions said they are ready to consider halting attacks in Israel, but not in the West Bank and Gaza Strip. However, such a partial truce would be unacceptable to Israel, the United States and Egypt.
Egypt has tried repeatedly in recent months to work out a truce, a so-called "hudna," but was rebuffed each time by Hamas, the largest and deadliest of the militias, whose lead the other armed groups have followed.
The latest talks come after a bloody week in which more than 60 people on both sides were killed in bombings, shootings and missile strikes, and Hamas threatened multiple attacks in Israel, in retaliation for Israel's failed attempt to kill one of the group's leaders, Abdel Aziz Rantisi.
The United States is trying to salvage the road map, and intense U.S. and Egyptian pressure came to bear on Hamas after the surge in violence.
Jewish settlers occupied a remote site in the West Bank early Sunday, then left after the Israeli army promised that it would close two local roads to Palestinians, the settlers said.
The brief encounter was just the latest in the cat-and-mouse game the army has been playing with the settlers.
Under terms of the "road map," Israel is to remove all outposts erected since March 1, 2001. Last week, soldiers tore down 10 tiny, empty hilltop outposts and three inhabited points, but settlers stopped removal of others by appealing to the Supreme Court.
On Sunday, the high court delayed the evacuation of an outpost next to the older settlement of Beit El, near the Palestinian town of Ramallah, court officials and settlers said, after an appeal by the settlers. Another hearing is set for Monday.