The Mavericks registered their interest in bringing Devin Harris back to Dallas in January.
So the teams, as promised, have been in talks about a Harris-to-Dallas deal since it became clear that the Nets wouldn't be getting Melo. But they've yet to reach a consensus on workable trade terms.
The Mavs, sources said, have "turned down" that offer, telling New Jersey that they are unwilling to add two assets to Butler to bring back Harris, who badly wants out of New Jersey after hearing his name in trade rumors for more than a year.
Negotiations between the teams are expected to continue, but they have not agreed on a trade framework.
Portland is the only other serious suitor known to be after Harris, since the Nets have shown little interest in the principal asset Atlanta has offered (Mike Bibby). But the Blazers are weighing several scenarios before Thursday's 3 p.m. trading deadline.
Butler, meanwhile, appears to think he's staying put in Dallas, tweeting Tuesday night: "I aint going no where."
Marc Stein is a senior NBA writer for ESPN.com.