Mr Arafat was to meet Mr Hawatmeh, who heads the Syrian-based Democratic Front for the Liberation of Palestine, in Cairo to discuss a common position.
Mr Hawatmeh opposed the Oslo peace accord with Israel signed in 1993, but his organisation has launched few attacks in recent years.
Mr Arafat wants to make a show of Palestinian unity because he has few cards to play in negotiations with Israel.
Ehud Barak, the newly elected Israeli Prime Minister, wants to modify the Wye accords signed but never implemented by the previous Israeli government.
While in Egypt, Mr Arafat is also holding talks with President Hosni Mubarak about the implementation of Wye. The Egyptian leader wants to play a mediating role in the talks between the Palestinians and Israel.
Meanwhile there is growing concern over Mr Arafat's health, with the Israeli magazine Yerushalayim citing a secret Palestinian report that says his condition has deteriorated markedly in recent weeks. It says that at a meeting last week with President Mubarak, Mr Arafat "had difficulty talking, made unintelligible remarks and was barely able to complete a sentence".
Mr Mubarak offered to cut short the meeting and call Egyptian doctors but Mr Arafat, who is 70 years old, insisted on continuing.
The report, said to have been given to the United States and Israel by Mr Arafat's associates, says the Palestinian leader tires quickly and sometimes feels sharp pains in his head and chest. It says: "The trembling of his lips and hands has got worse, his memory is vague and he is no longer able even to hold a pen to sign a document."