CLaRa: Bridging Retrieval and Generation with Continuous Latent Reasoning

Retrieval-augmented generation (RAG) enhances large language models (LLMs) with external knowledge but still suffers from long contexts and disjoint retrieval–generation optimization. Within the standard retrieve-then-rerank pipeline, the reranking stage directly determines what context the generator receives, yet this critical interface remains separately optimized. In this work, we propose CLaRa (Continuous Latent Reasoning), a unified framework that performs embedding-based compression and joint optimization in a shared continuous space. To obtain semantically rich and retrievable compressed vectors, thereby reducing the document length fed into the generator, we introduce SCP, a key-preserving compressor pretraining framework based on question-answering and paraphrase supervision. CLaRa then trains the reranker and generator end-to-end via a single language modeling loss, with gradients flowing through both modules using a differentiable top-k estimator. Theoretically, this unified optimization aligns retrieval relevance with answer quality. Experiments across multiple QA benchmarks show that CLaRa achieves state-of-the-art compression and reranking performance, even at a text compression rate of 16, outperforming text-based fine-tuned baselines. We pulish the code on https://anonymous.4open.science/r/clara-1E43.