While no deal has been confirmed, FIFA President Sepp Blatter says he and European federation boss Michel Platini have discussed the idea in the past week.
If such an arrangement becomes reality, Australia would only have a chance at hosting the 2022 World Cup.
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Blatter says he has talked over a European-only deal with UEFA president Michel Platini in Moscow in the past few days.
"There is a movement at the moment among the various candidates that in the end it would be a good solution ... if the candidates for 2018 would only be those from Europe," Blatter said at a news conference.
"It's not been finally decided but it's the idea, also to make the work of FIFA easier and especially that of the executive committee."
Russia and England have applied separately to stage the 2018 or 2022 World Cups while Spain and Portugal and Netherlands and Belgium have made joint bids for one or both.
Aside from Australia, countries outside Europe bidding for hosting rights are Japan and United States, while South Korea, Indonesia and Qatar have all applied to host only the 2022 version.
Candidates must submit bid documentation by the end of May and FIFA will study those in June before sending out its specialists to assess whether those nations can organise a successful World Cup.
The governing body will select the 2018 and 2022 hosts at Zurich in December.
