Sources close to Ismail Haniya, the Palestinian prime minister, described the Hamas decision as a "significant change in policy".
"What it means is that the Palestinian government is willing to recognise Israel if Israel met certain conditions, including a complete withdrawal from the territories Israel occupied in 1967," a source told Al Jazeera.net on Wednesday.
Speaking on condition of anonymity as he was not authorised to speak to the media, the source added that he expected the "new posture" to be announced officially by Haniya in the coming few days.
The Hamas-led government is coming under intense international pressure to recognise Israel, abandon armed resistance and accept outstanding agreements between the Palestinian Authority and Israel.
If true, the new development will constitute a significant departure from Hamas' dogged refusal to accept Israel's right to exist.
Hamas' officials and spokespersons in the West Bank have refused to comment on the movement's willingness to recognise Israel in return for a viable Palestinian state on 100% of the occupied territories.