Rakah was formed on 1 September 1965 due to internal disagreements in Maki, the original Israeli Communist Party, which was split between a largely Jewish and Zionist faction led by Moshe Sneh that was critical of the Soviet Union's anti-Zionist stance, and a largely Arab faction that was increasingly anti-Zionist.

As a result, the pro-Arab/pro-Soviet faction (including Emile Habibi, Tawfik Toubi and Meir Vilner) left Maki to form a new party, Rakah, which the Soviet Union recognised as the "official" Communist Party.

[7] The 1965 Israeli legislative election saw Rakah party win three seats, comprehensively beating Maki as it slumped to just one.

Rakah's opposition to Zionism and the Six-Day War meant that they were excluded from the national unity governments of the sixth Knesset.

During the 1973 Israeli legislative election Rakah saw a rise in support as the party picked up four seats.