Palestinian negotiators say they have largely reached agreement on a new prime minister and unity government.
Negotiators for the rival factions Hamas and Fatah are holding talks in Gaza City on allocating seats in a new cabinet.
News reports say the negotiators have agreed to nominate a prominent academic as prime minister -- the former head of Gaza's Islamic University, Mohammed Shabir.
The 60-year-old biologist is not a member of the current ruling group Hamas or the Fatah party of Palestinian President Mahmoud Abbas.
Hamas and Fatah have been negotiating for several months on forming a unity government they hope will be able to end an international aid boycott.
The United States and other donors cut aid after Hamas took power in March because of the militant group's refusal to recognize Israel or renounce violence.
European Union foreign ministers, meeting in Brussels on Monday, called on Palestinians to work for national unity. However, the EU ministers said any new government must respect international demands to recognize Israel, renounce violence and commit to peace talks.
Sunday, Arab government ministers meeting in Cairo proposed a new international peace conference to discuss the Israeli-Palestinian dispute. The ministers said the talks would be based on the principle of trading land for peace.
In Jerusalem, Israel reacted cautiously to the peace conference proposal. Israel refuses to talk with Hamas because it does not recognize the Jewish state.