Nazareth, the only Palestinian city to survive the 1948 war intact, became the social, economic, and political hub of Palestinian life in the postwar period. As such, it provides the ideal setting to study early Palestinian responses to the creation of Israel. This paper reexamines the ambivalent relationship between Nazareth's political leadership and the newly established State of Israel to argue that the Palestinian citizens of Israel were neither traitors and collaborators, on the one hand, nor passively quiescent, on the other. Rather, as a new national minority, Palestinians overcame myriad forms of control as they negotiated the structural obstacles placed before them by their new overlords. Local Communist politicians, in particular, took a leading role to advocate on behalf of Nazarenes beset by the day-to-day hardships of poverty, hunger, displacement, and unemployment. The Israeli authorities harped on the Communist threat in response, echoing the Cold War rhetoric of the time.