When Ould Daddah became president he established a one party state. Uniting the state meant dealing with the dangers of the Moroccan claims and the racial tensions between Moors and Africans. For instance, in 1966, there were racial riots to oppose the decision to make Arabic the official language.

Ould's single movement to combine all political parties was called the Parti du Peuple Mauritanien (PPM). In 1964, the Declaration of Kaedi proclaimed the party a state institution.

Ould faced many challenges in the late sixties and early seventies from the rising power of students and workers. The mining town of Zouerate, where working conditions were under extreme apartheid (the small white labour force earned about two-thirds of the country's entire wages), saw a miners' strike crushed by the army in May 1968.

Other leftist parties were formed and Ould Daddah met the challenge by increasing nationalist commitment. In 1973, Mauritania had its own currency and the foreign-owned mining consortium of MIFERMA was nationalized in 1974. By 1975, many who had joined the clandestine Marxist group, the Parti des Kadihines de Mauritanie (PKM), moved over to the PPM.

Ould eventually changed his strategy over the Western Sahara. He had supported the Spanish sovereignty of Western Sahara against what was known as the "Greater Morocco" designs of Rabat. However, on 14 November 1975 the Madrid Agreement was signed and the Western Sahara was partitioned between Morocco and Mauritania.

Instead of reaching Moroccan-Mauritanian détente, Ould was embroiled in a war with the Polisario Front which claimed the Western Sahara for itself. The war was politically unpopular and drained the country of scarce economic resources. The Polisario carried out many raids on the strategic Nouakchott-Nouadhibou railway line and in October 1977, the French had to rush in military supplies to protect the Nouakchott regime.