The talks follow a key breakthrough last week when Palestinian Authority prime minister Rami Hamdallah visited Hamas-run Gaza for the first time since 2015 and his ministers officially took control of government departments there.
"The dialogue committee for reconciliation between Fatah and Hamas started work under Egyptian sponsorship," the Hamas delegate told AFP.
The talks "began in the headquarters of the Egyptian intelligence to examine the files to enable a Palestinian national unity government to work in the Gaza Strip," he added.
The Islamists of Hamas and the West Bank-based Fatah movement of Palestinian president Mahmud Abbas have been at odds since they fought a near civil war in 2007.
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The split has complicated any potential peace negotiations with Israel.
Multiple previous attempts at reconciliation have failed but the latest Egyptian-led push received a major boost last month when Hamas agreed to cede civil power in Gaza.
The two sides remain sharply at odds, however, over the future of Hamas's 25,000-strong armed wing, which the Islamists say is non-negotiable.
Newly appointed Hamas deputy leader Salah al-Aruri and the movement's Gaza chief Yahya Sinwar will lead the Hamas delegation, a spokesman said.