Mr Panneerselvam, the leader of the Puratchi Thalaivi Amma faction, virtually brought down curtains on the proposed merger last month when he announced the disbanding of a seven-member panel, set up to hold unification talks with the AIADMK (Amma) faction led by Mr Palaniswami.
The former chief minister had then said he was being "forced" to come up with the announcement as he had been "tolerating" all kinds of "irresponsible statements" from the rival camp.
"I believe the unification will happen," Mr Palaniswami said when reporters asked him if there were any efforts going on in this regard.
Mr Palaniswami's remark came in the wake of "sidelined" AIADMK (Amma) Deputy General Secretary, TTV Dhinakaran, reportedly setting an August deadline for the merger, and indicating he will take up the effort if the others on either side failed to do the job.
Mr Dhinakaran, the nephew of jailed party chief VK Sasikala, had announced stepping aside from party activities in April this year after a section of ministers revolted against him and Sasikala.
He was later arrested by the Delhi Police in a bribery case over the AIADMK's 'Two Leaves' election symbol. However, on being released on bail last month, he said he would resume party work.
He had also said Sasikala told him to wait for two months to see if the merger happens.
Meanwhile, in Thanjavur, Sasikala's brother V Divakaran said AIADMK was going through "challenging times" and compared the party to the Mahabharatha's Abhimanyu, killed after entering the 'Chakravyuh' battle formation.
"(Lord) Krishna taught Abhimanyu how to enter chakravyuh but not on how to come out. AIADMK (today) is like Abhimanyu," he said, but expressed confidence that the party will come out of its "present troubles".
Referring to Sasikala being lodged in jail and the passing away of close relatives TV Mahadevan a few months back and S Santhanalakshmi yesterday, Mr Divakaran said "we suffered setbacks" due to the deaths.
"But we will come out of these and reach our target," he said.
Incidentally, Mr Divakaran was seen with Mr Dhinakaran, who he is said to be not on good terms with, ahead Tamil Nadu Chief Minister E Palaniswami of the final rites of Santhanalakshmi in Thanjavur, and hinted that all was well between the two.