With 90 percent of votes counted, the Joint List was slated to take 15 of 120 seats in the Israeli parliament, up from 13 following elections in September.
But it may yet fall short of its chief goal of blocking Prime Minister Benjamin Netanyahu's re-election, with his right-wing Likud and its allies expected to control 59 seats - just two short of a majority.
The Joint List's solid performance came after it campaigned heavily for the votes of Jewish leftists disenchanted by the demise of Israel's historic left-wing parties, notably Labor.
The success of that strategy remains unclear, pending a breakdown of voter patterns.
But Joint List chairman, Ayman Odeh, made no secret of his wish to become the face of the Israeli left - for both Palestinian and Jews.
Leftists 'don't despair'
"I want to congratulate our public, both the Arab and the many Jewish voters who supported the Joint List," Odeh told reporters on Tuesday morning.
"This is the beginning of strengthening the true left," he said.
"I call on leftists to not despair or do any soul-searching, but to think about a partnership... real democracy, real equality between Jews and Arabs in the country and social justice for the weak."
To get out its core Palestinian vote, the Joint List also focused on US President Donald Trump's controversial peace plan, detested and feared by Arabs, who make up around 20 percent of Israel's population.
They are particularly alarmed by a clause that would place some Israeli Palestinian towns and villages under the sovereignty of a future state.
If implemented, that could see some Palestinian Israelis have their citizenship changed against their will.
Monday's election was the third in less than a year, after inconclusive votes in April and September.
The Centrist Blue and White alliance, Likud's main challenger, slid to 32 seats from 33 in September, while an alliance of the Labor Party, left-wing Meretz and centrist Gesher spiralled from 11 seats running separately in the last election to seven together.
The Joint List's member parties include conservative Islamists and Palestinian nationalists.
They are united by demanding the end of Israel's occupation of Palestinian territories and the establishment of a Palestinian state, a position regarded as left-wing in Jewish-Israeli society.
Its manifesto also includes "workers' rights and social and environmental justice".
In September, the list backed Gantz to form a government, but for political reasons he was loath to form a coalition with what is regarded by many in the country as an anti-Israeli group.
The list's parliamentary numbers, however, blocked Netanyahu and his right-wing allies from attaining power.
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