"The democratic party we have now has become the first democratic party in Palestine and the Arab world," al-Barghuthi said after the official election results were published, showing PLO Chairman Mahmud Abbas to have won a decisive 62.32% of the vote.
Al-Barghuthi, a strident critic of the Palestinian Authority and the only strong challenger to Abbas, came away with a respectable 19.8%, the official figures showed.
The other five candidates won less than 11% of the votes cast between them.
"I am very proud today - we have become the third force in Palestine and the first democratic power," he said, ranking his faction third in popularity after Abbas' dominant Fatah party and the Islamist movement, Hamas, which shunned the vote.
"We now have a national democratic party and a common programme and we will lead this new party to achieve the dreams of our people," he said, promising that the movement, which does not yet have a name, will participate in the forthcoming legislative and municipal elections.
On his final day of campaigning two days before the election, al-Barghuthi made clear he already considered himself as "the leader of the democratic opposition movement" and vowed to continue in that role.
Al-Barghuthi is bilingual and
comfortable with the media too
A thorn in Abbas' side until the very end, al-Barghuthi complained of irregularities during the voting process and accused the dominant Fatah faction's candidate and his aides of creating obstacles, saying he believed it lost him 10% of the vote.
"If there were not so many problems with the voting, I think that the 20% I got would have been 30%," he said, before admitting that despite the problems the elections were "honest and democratic".
In the run-up to Sunday's election, al-Barghuthi was running on an election platform which included "democratisation, fighting corruption, and bringing back internal security and the rule of law".
A 51-year-old physician and prominent human-rights and democracy campaigner, al-Barghuthi is known for having publicly denounced corruption and the lack of power-sharing in the late Yasir Arafat's Palestinian Authority.
Al-Barghuthi says he represents
no faction but the silent majority
Al-Barghuthi, no relation to jailed Fatah firebrand Marwan al-Barghuthi, has frequently said he does not represent a factional line but is the voice of the so-called silent majority.
A relative rookie on the political scene, he speaks fluent English and is comfortable in front of the cameras, unlike Abbas, who is often described as austere and lacking in charisma.
Al-Barghuthi's campaign drew backing from the leadership of the leftist Popular Front for the Liberation of Palestine, although he was disavowed by some of the movement's more militant members.