"We're not going to permit the conditions that exist at Dilworth to exist here," Everett Gillison, Mayor Nutter's chief of staff, told reporters Monday at Paine Plaza.
The city also wants the protesters to leave Dilworth so that a $50 million renovation project can begin.
Gillison and others met with Occupy Philly representatives late in the day and told them they needed to respond to the offer to apply for a permit for a more limited protest within 48 hours.
One restriction of the new permit is that Occupy Philly must pay for "costs for services for the purpose of staging and conducting the demonstration," according to a letter city officials gave protesters.
Occupy could request a waiver if it can prove it can't pay, the letter says.
Gwen Snyder, who works with Occupy Philly's legal and labor working groups, said the group would have to talk to its lawyers.
But she noted that even the name of the group, Occupy, has to do with staking out a space.
"They are essentially asking us to surrender unconditionally," Snyder said.
Will Tucker, who belongs to a splinter Occupy group known as Reasonable Solutions, said his group, too, would have to talk to its lawyer.
The group was not expected to vote on the city's offer before Tuesday at the earliest.
About 75 Occupy members met Monday night at the nearby Friends Center to learn about the city's proposal.
A legal adviser for Occupy Philly said civil rights attorney Lawrence Krasner suggested, half-jokingly, that the group apply for a commercial permit and sell T-shirts, since the city is allowing the commercial Christmas Village, which has buildings that are heated, at JFK Plaza.
One speaker told the group that if Occupy Philly accepted a permit that requires participants to go home at night, it would no longer be an occupation.
The city invited Occupy to apply for a permit to use Paine Plaza from Nov. 21 to Dec. 20. The site is outside the Municipal Services Building.
The group has been encamped on Dilworth Plaza since early October. About 230 tents remain outside City Hall.
Contact staff writer Miriam Hill at 215-854-5520, hillmb@phillynews.com, or @miriamhill on Twitter.
Inquirer staff writer Robert Moran contributed to this article.