Its formation was formally announced on 17 June 2002 in Ramallah on the West Bank, part of the Palestinian Territories, by Haidar Abdel-Shafi, Mustafa Barghouthi and Ibrahim Dakkak.

The Initiative calls for the implementation of relevant United Nations resolutions requiring the withdrawal of the Israeli army from the West Bank and Gaza and safeguarding the internationally recognized right of Palestinian refugees to return to their homeland."

It has campaigned extensively for democratic reform within the PNA and advocates a national emergency government encompassing all factions (including the islamist Hamas) as a means of stopping autocracy and lawlessness in Palestinian politics.

It is strongly based in civil society organizations and NGOs operating in the Palestinian Territories and has extensive connections with foreign aid and support groups.

The PNI has gained some support among Palestinian exiles, most notably the late Edward Said, but is extremely weak or non-existent in the main refugee communities in Jordan, Lebanon and Syria.

Barghouti was also endorsed by the Popular Front for the Liberation of Palestine, after that group failed in its attempts to organize a single candidacy for all secular Palestinian factions outside Fatah.