The Palestine People's Party is actually a descendent of events within the pre-state Jewish community in Palestine, starting with the fusion in 1919-1920, within the Mifleget Poalim Sotzialistim (MOPS, Socialist Workers' Party), of the extreme left of the Palestinian branch of Poale-Zion with several small groups which had split off from Poale-Zion in Eastern Europe. Officially founded in September 1919, the programme of MOPS did not differ fundamentally from left Poale-Zion, inasmuch as they advocated 'proletarian Zionism' whilst rejecting the 'constructivist' aspect of the endeavour (colonisation of the land, etc.). Moreover, the world-wide organisation of the Poale-Zion was engaged at the time in discussions with the Communist International in order to achieve recognition as the official Jewish section of the Third International.
However, within MOPS, some forces were clearly moving towards unequivocally anti-Zionist positions in contradiction to the general line of the Left Poale-Zion World party. Thus, Jacob Meiersohn, the MOPS delegate to the 1920 conference of the left Poale-Zion World Party (Veltfarband) held in Vienna, was actually hounded out of the congress hall for having dared criticise the Hashomer militia, which he described as a Jewish armed guard protecting Jewish capital and property against the occasional petty thefts of famished Arab labourers working for less than subsistence wages. After the scandal, the MOPS - although characterised at the time by the Executive Committee of the Comintern as 'the nucleus of a revolutionary labour movement' in Palestine - disowned Meiersohn. Under the pressure of the Veltfarband, the MOPS was clearly reverting to Zionism and shedding the clear-cut anti-Zionist position Meiersohn had stood for. Meiersohn left Palestine for good after the Vienna conference and as he appears to have been the principal theoretician of the MOPS, his departure was evidently a loss. At any rate, the second congress of the MOPS, held in Haifa in October 1920, endorsed an unambiguously Zionist programme. MOPS then claimed a membership of around 300. The rightward evolution culminated in November 1920 when the MOPS merged with 'Socialist Initiative Poale-Zion Committee' led by Revusky, who had formerly split off from the party with his supporters out of protest against the 'liquidationist' attitude of the MOPS leadership towards Poale-Zion values. The united organisation now adopted the denomination which the Veltfarband had been campaigning for: Mifleget Poalim Sotzialistim Ivrim (MOPSI, Hebrew Socialist Workers' Party). The change of denomination, stressing the Jewish as opposed to territorial orientation of the party, was very significant, though the MOPSI contended that it hoped to unite with a future Palestinian Arab group (then non-existent) to form the Palestine Communist Party.
The MOPSI took part in the founding congress of the Histadruth, (where it won 7 out of 87 seats.) It favoured the use of Yiddish on principle (this was a tangible link with the East European Jewish working-class) but was eventually forced to turn to Hebrew to increase the impact of its propaganda. The party leadership hedged on the issue of affiliation with the Third International, probably feeling that the negotiations of the Veltfarband with the Executive Committee would settle that issue.
After the 1920 incident in Jerusalem, resulting in bloodshed and the destruction of Jewish property, the MOPSI (then still MOPS) had reacted by denouncing the 'bloodthirsty lion' i.e. British Imperialism. It pointed out that the Zionist leadership also bore responsibility for the incidents, since it had prevented the Jewish workers from carrying out their socialist duty vis-a-vis their Arab colleagues. MOPSI also indicted the reactionary Arab leadership for its role in stirring up mob violence.
The Jewish communists of MOPSI had organised the 1921 Jaffa May Day demonstration in order to promote solidarity with the Arab workers. Yet the MOPSI still maintained a characteristic ambiguity towards Zionism. In its Hebrew and Yiddish leaflets it denounced Zionism while calling for a Soviet Palestine and for a Jewish Communist Workers Centre in Palestine. The Arabic text dropped the line referring to the Jewish Communist Workers Centre in Palestine. After the May Day riots, the Zionists and the British denounced MOPSI as being responsible for the bloodshed. MOPSI militants were arrested and 15 were illegally deported. They embarked at Haifa for the Soviet Union, singing the International and surrounded by British troops and Arab police. Most of them subsequently disappeared in the course of the numerous Stalinist 'purges'. Following the deportation of the 'Bolshevist ringleaders' and other police measures, the Palestinian Communists, decimated by repression, were left with a total membership of only 80 in 1924 (according to the High Commissioner, Sir Herbert Samuel). The Mandate Government 'ruthlessly represses all attempts at disorder', notes Vandervelde, the leader of the Second International, who also called attention to the use of the cat on political prisoners.
From that time onwards, the Party was compelled to work underground, and its militants were persecuted by the authorities. It was then that MOPSI experienced its first dissensions, internal quarrels which reappeared in the Palestinian Communist movement with each new development in the political situation. A split which took place in 1922 was reabsorbed the following year in July; henceforth the Party adopted a fully anti-Zionist line, rejected 'proletarian Zionism' and broke all ties with Left Poale-Zion.
Having become the Palestine Communist Party, MOPSI was recognised by the Executive Committee of the Communist International in March 1924.
In 1943, most of the Arab members left the Palestine Communist Party (PKP -- after its initials in Yiddish -- the party advocated the use of Yiddish rather than Hebrew in order to maintain the Yishuv's links with the Jewish proletariat outside Palestine) and established the National Liberation League (page 184 of The Palestinian People). Founding members of the league included Haidar Abdel Shafi, Mukhlis Amer, Emil Touma, Emil Habibi and Mufid Nashashibi.
In 1947, the League was the only Arab political body in Palestine that openly supported the UN Partition Plan. However, this brought about a split in the league, one faction (which included Emile Habibi, Tewfik Toubi and Fuad Nasser) followed the Moscow line and accepted partition and the other (which included Emile Tuma, Bulus Farah and Musa al-Dajani) opposing the plan.
When UNSCOP visited Palestine, Mufid Nashashibi and other nationalist Palestinians were appalled at the disparity between the Palestinians and the Jews. They met secretly in Jerusalem with the Yugoslav alternate representative to UNSCOP and formulated the federal solution for Palestine which was later known as the UNSCOP 'Minority Opinion'.
After the 1947-9 war, remnants of the league within Israel helped to form the Israel Communist Party (Maki) while remnants outside Israel formed the Palestine Communist Party (1951-1967) which became a Communist faction within the PLO.
On 20 September 1947 (that is, some months before the UN Partition Plan was voted on by the General Assembly), the Central Committee of the National Liberation league, Haifa, wrote to the UN Ad Hoc Committee on Palestine 'requesting that the Ad Hoc Committee's attention be brought to a statement by the League condemning the majority recommendations of the Special Committee and declaring that the form of independence outlined in the minority recommendations should be decided by the people of Palestine, not imposed on them. A memorandum issued by the League on "The Palestine Problem" and dated August 1947, has also been received, for presentation to the United Nations' -- see this UN document.
See this history of the PPP.
See, also, this description of the PPP on a soft-Zionist web-site.
See the PPP section of this document.
See this Wikipedia (English) article
See this Wikipedia (Arabic) article (English translation)