Thousands of people have gathered in Gaza's main square to celebrate the 21st anniversary of Hamas, the Palestinian faction.
Ismail Haniya, the Hamas leader, was set to address the rally on Sunday, just five days before a shaky six-month ceasefire between Israel and Gaza's Palestinian factions expires.
Haniya, the deposed Palestinian prime minister, was expected to announce whether or not the truce would be extended.
"Smaller factions, and people in general, in Gaza are sceptical about a new truce," Ayman Mohyeldin, Al Jazeera's correspondent in Gaza, said.
"They say, so far, the exisiting truce has not brought any gains to the people in Gaza. People say the ongoing siege is a stark example of how Israel has treated Gazans."
Palestinian groups accuse Israel of failing to honour its part of the truce by easing the crushing blockade of Gaza that it has largely enforced since Hamas gained control of the strip in June 2007.
Israel says Hamas, for its part, failed to stop armed groups from firing rockets and mortar rounds over the border.
Egyptian mediation
Officials from Egypt, which has sought to mediate the two sides, and Israel were to meet in Cairo on Sunday to discuss the possibilities of extending the ceasefire.
Amos Gilad, the Israeli defence ministry official who helped broker the six-month truce, was to hold talks with Omar Suleiman, Egypt's intelligence chief.
"The Egyptians are interested in moving the Gaza situation forward. Results of the meeting - if any - will probably materialise in the days to come," our correspondent said.
The UN, meanwhile, is expected to pass a resolution calling for peace in the Middle East for the first time in five years.
The Security Council will meet on Tuesday to discuss a US-sponsored resolution, which calls for peace efforts between Israel and the Palestinians to be intensified.