Discussions are expected to centre on the release of Palestinian prisoners and on further Israeli military withdrawals from the occupied territories.
Palestinian Prime Minister Mahmud Abbas is under mounting pressure from resistance groups, who declared a cease-fire three weeks ago, to secure the release of a “substantial” number of prisoners held in Israeli jails.
“The prisoners issue is a red line,” an unidentified Palestinian official told reporters. “We will accept no compromises on it and the Israelis have to understand that."
The Palestinian Authority (PA) maintains there are about 8,000 of its people languishing in Israeli prisons, while Israel says the number is around 6,000 Palestinians.
Today's talks between the premiers will be the fourth since Abbas took office in April under a political reform programme, brokered by US President George W Bush.
The Israeli government will likely demand that the PA should take tougher measures against resistance groups, and boost its security.
The abduction on Saturday of the governor of the West Bank city of Jenin by Palestinian gunmen of al-Aqsa Brigades serves to highlight the difficulties facing Abbas in his attempt to rein in the resistance factions.
Armed and masked men of al-Aqsa Martyrs' Brigades dragged Heider Irsheid, 50, to a street in downtown Jenin where they beat him up in broad daylight as a crowd looked on. Yasir Arafat ordered the release of the governor who has been accused of embezzling Palestinian Authority funds.
Both Abbas and Sharon are due to meet President Bush later this month to report on developments towards peace. Following 33 months of violence the US-led "road map" is aimed at promoting the establishment of a Palestinian state by 2005.