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. 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 data synthesis 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.