"We are the party of the moderate and reasonable majority in the face of radicals and extremists," Rajoy told a meeting in the central city of Toledo.
"We are ... the party of the Spanish centre right, a party born with Spanish democracy and not a quarter of an hour ago," said Rajoy, alluding to the rise of pro-market centrist Ciudadanos movement and the anti-capitalist Podemos (We Can).
Cuidadanos have made major inroads since their 2005 founding and current polling put them as enjoying 21.5 percent of voter intentions, just behind the main opposition Socialist Party (23.5 percent) and the PP itself, credited with 23.4 percent.
The PP started out in 1977 as the Popular Alliance launched by Manuel Fraga, a former minister under dictator Francisco Franco.
Today, the PP remains "Spain's greatest party" and is not "the product of a debating circle or a media operation," declared Rajoy as he prepared for a television faceoff Sunday with Ciudadanos, led by Albert Rivera and Pablo Iglesias's anti-austerity movement Podemos.
Spain has recently emerged from a long downturn sparked inpart by the collapse of a decade-long property bubble in 2008.
The resulting downturn was the worst since the country returned to democracy following General Franco's death in 1975.
Under Rajoy, who took office in 2011, the government has instigated labour market reforms and on Friday Standard & Poor's raised Spain's debt rating by one notch to BBB+,indicating economic prospects are improving ahead of a December 20 general election.
Lauding his party as the "safe bet which knows how to arrange things" Rajoy meanwhile unveiled a new poll slogan -- "promise kept, from crisis to recovery" and told voters they were emerging from their "bad dream".
He indicated that when he took office "the threat of bankruptcy" hung over Spain and said his manifesto hinged on delivering "jobs and security".
The PP secured an absolute majority four years ago but this time look as if they will have to depend on support from Ciudadanos, which already backs the PP in the Madrid regional government.
Ciudadanos have on occasion derided the PP as an "ancient" party with an "old" project and Rajoy appeared to rule out sharing power.
"What we have to do we shall do on our own," he said.