Palestinians have responded cautiously to the surprising emergence into prominence of a centrist party in Israel’s remarkable elections that has stolen the thunder of a right-wing coalition that was earlier expected to win by a comfortable margin.

Riding on young middle class votes, the Yesh Atid party headed by newcomer Yair Lapid has done exceptionally well in its maiden outing. In Ramallah, the seat of the Palestinian Authority, the formal response to the Israel polls has been lukewarm. “I am not going to say that now the chances of peace are going to be drastically improved or that we are going to see a sort of left-wing coalition and a peace camp that will take over and produce instant peace,’’ said Hanan Ashrawi, a senior official of the Palestine Liberation Organisation (PLO).

In Israel, Mr. Lapid leveraged his party’s 19 seats in the new Knesset of 120 by setting conditions in order to join a coalition government. He insisted that all Israelis, without religious exception, would need to serve in the military, and the stalled peace talks with the Palestinians must resume — an insistence that would shift inescapable focus on the country’s policy on settlements. Both the Americans and the Palestinians are demanding a halt to fresh Israeli construction in occupied East Jerusalem and West Bank in order to revive stalled peace talks.