Addressing an Iftar meal at the end of Sunday's Ramadan fasting in Gaza, Ismail Haniya also said his Hamas government would not "recognise or normalise" relations with Israel.
He described the 2002 Arab initiative as "problematic, for it entails recognising Israel, while we have already made it known that we refuse such recognition".
The plan, presented by Saudi Arabia and endorsed by the Arab League, calls for the recognition of Israel in return for its pullout from the West Bank, Gaza and East Jerusalem.
Haniya said he still hopes for a Palestinian unity government with Fatah led by Mahmoud Abbas, the Palestinian president.
But Abbas said last week that negotiations have broken down.
Abbas was expected to travel from the West Bank to Gaza on Monday, Palestinian officials said, and may present Hamas a deadline for agreeing to a unity government.
Otherwise, aides say, Abbas might call a new election.
Haniya hinted that peacemaking with Israel could be left to Abbas.
Haniya said the unity concept "leaves a lot of room for political manoeuvring" for Abbas.
The US and Europe have insisted that any Palestinian government must accept three basic conditions before the West resumes aid that have been halted: recognition of Israel, renunciation of violence and acceptance of previous Israeli-Palestinian peace deals.