On Tuesday talks between rival Palestinian factions opened with the aim of reaching a power-sharing agreement.
The first day of reconciliation talks involving Hamas, which controls the Gaza Strip, and the Fatah movement of Palestinian President Mahmoud Abbas, which dominates the West Bank, produced no concrete results.
The talks will continue on Wednesday as parties join efforts to try and solve their dividing issues.
The meetings are expected to last about 10 days.
Omar Suleiman, Egypt's intelligence chief and the mediator of the talks urged all to forget their recent clashes and focus on future.
The Palestinian people are watching the results of these talks, so please do not let them down, Suleiman said. We are only looking toward the future and your meeting today is the beginning of that path.
The Palestinians are divided between the two groups. In the short-term, a unity government could be crucial to an effective reconstruction program in the Gaza Strip, where Israel launched a devastating 22-day offensive in December with the declared aim of ending cross-border rocket attacks.
At an Egyptian-hosted conference last month, international donors pledged $4.48 billion to help rebuild in the Gaza Strip.
Donors differ over how to deliver the aid while Hamas continues to govern in the Gaza Strip, territory it seized from Fatah in fighting in 2007.
Both Abbas's Palestinian Authority and Hamas want to control the funds.
Abbas said this week that any new unity government must accept past Palestinian agreements. That would include recognizing Israel's right to exist — which Hamas rejects.
The Palestinian representatives in Cairo are working in five committees, deliberating specific issues — from forming a unity government, holding new elections, reforming the security services, carrying out confidence-building measures and finding a role for Hamas in the Palestine Liberation Organization. Other Palestinian factions are also present.
Previous unity accords have collapsed in mistrust and infighting, but this time both sides appear to have a strong incentive to reach an accord.
Hamas needs Fatah's international respectability to help end the devastating blockade of Gaza imposed by Egypt and Israel and obtain foreign funding to rebuild Gaza.