President Mahinda Rajapakse's United People's Freedom Alliance has made a stronger-than-expected showing in local elections, winning a majority of the districts that were contested.
In contrast, a Marxist ally of the president, the Peoples Liberation Front, or JVP, fared poorly, despite widespread expectations that the party would substantially increase its share of seats.
The JPV is part of the President's coalition government, but had fought the local elections independently.
The main opposition party, the United National Party, also trailed the ruling alliance.
Paikiasothy Saravanamuttu, the Director of Colombo's Center for Policy Alternatives, says the results are being seen as an endorsement of President Rajapakse, who opened peace talks with the rebel Liberation Tigers of Tamil Eelam last month despite reservations from hard-line allies like the JVP.
"In terms of the peace process, there is some space to be able to say that because the JPV has not fared as well as they expected to, that the President's hand is somewhat strengthened, and that he would have greater room for maneuver," he said.
The JVP, whose supporters are among Sri Lanka's Sinhalese majority, was widely seen as an impediment to turning a four-year ceasefire with the Tamil rebels into a lasting peace.
The rebels have fought a violent, two-decade-long insurgency, demanding an autonomous Tamil homeland in the north and east of the country. The JVP opposes giving concessions to the minority Tamils.
President Rajapakse, too, originally promised a tough line with the rebels when he fought national elections alongside his allies four months ago. But he changed tack when a four-year-old ceasefire came close to collapsing.
His government has now held one round of peace talks with the rebels. The two sides are due to hold a second round next month in Switzerland.
Jehan Perera, head of the National Peace Council in Colombo, says he hopes the election results will make it possible for the government to take a more conciliatory line with the Tamil Tigers, also known as the LTTE.
"It is my hope that after these elections, the President will feel more liberated to be more proactive," said Perera. "He will follow a more proactive and accommodative policy toward the LTTE that will lead to a reinvigoration of the peace process."
A 2002 truce with the rebels raised hopes of settling Sri Lanka's ethnic conflict, but efforts to negotiate a concrete settlement have been unsuccessful so far.