Rajoub met his Israeli counterpart Ofer Eini and FIFA president Sepp Blatter at the headquarters of soccer's governing body in the latest attempt to end the impasse between the two sides.
The PFA accuses Israel of hampering its activities and restricting the movement of players between the Gaza Strip and the West Bank. Israel cites security concerns for the restrictions it imposes.
The Palestinians have also denounced "the racist behavior of Israel towards the Arabs" and the creation of "five clubs in settlements on land occupied by the Israelis since 1967, clubs who compete in Israeli competitions in violation of international law".
"Both member associations agreed to pursue the dialogue," said FIFA in a statement. "(FIFA President Blatter) confirmed that he will travel to Israel and Palestine to meet their respective FA Presidents and Heads of State ahead of the FIFA Congress."
For the Palestinian proposal to pass, it would need the approval of 75 percent of FIFA's 209 member associations at the annual congress in Zurich on May 29.
As well as restrictions on movement, the PFA has cited issues surrounding the curbs Israel places on the import into the Palestinian territories of sports equipment and visits by foreign teams and individuals.
FIFA has been trying to find a solution to the Palestinian complaints for more than two years. "The proposal (to suspend Israel) will remain on the agenda," Rajoub said in a telephone interview.
"A dialogue is not a solution, the solution is that the Israelis have to come and recognize our rights to develop the game according to the statutes of FIFA. We told the Israeli FA that they have enough time to come to the Congress with a proposal to end our suffering. We recognize their association and the right of their footballers to enjoy the game and we want to enjoy the same rights," he said.
If FIFA were to suspend Israel, it would bar all its teams and clubs from competing in international competitions such as the Champions League and Euro 2016 qualifiers. Israel is a member of UEFA and Palestine is part of the Asian Football Confederation (AFC).
Reuters and AFP contributed to this report.