Palalić received the forty-fifth position on the DSS's electoral list in the 2003 Serbian parliamentary election. The list won fifty-three mandates, and he was included in the party's assembly delegation. The DSS subsequently formed a coalition government with other parties, and Palalić served on the government side in the assembly. He chaired the committee on the judiciary and administration from 2004 to 2006. Palalić was president of the DSS's executive committee from 2005 to 2010 and chief of the party's campaign staff in the 2007 parliamentary election, which the party contested in an alliance with New Serbia and other parties. Their combined list won forty-seven mandates, and Palalić, who received the thirty-third position, was again included in his party's assembly delegation. He subsequently represented the DSS in talks with Serbian presidentBoris Tadić on the formation of a new ministry. The DSS remained in government during the sitting of parliament that followed, and Palalić chaired the assembly committee on local self-government. He received the eighteenth position on a combined DSS–New Serbia list in the 2008 election and received a third mandate after the list won thirty mandates. The DSS moved into opposition following the election, when a new coalition government was formed under the leadership of the rival Democratic Party. Palalić continued to serve as chair of the committee on local self-government. Palalić opposed a state visit by Joseph Biden to Serbia in 2009, accusing the American vice-president of being anti-Serb. He spoke against the prospect of Serbia joining the North Atlantic Treaty Organization at the same time, saying, "Serbia has no place in an organization that bombed Serbia and the , occupied Kosovo-Metohija, and supported the independence of that phoney state." He later opposed a 2010 resolution by the Serbian Assembly apologizing for the Srebrenica massacre, on the grounds that it inappropriately placed blame on Serbs as a people. He was quoted as saying, "This will put a burden on all future generations in Serbia, by saying that Serbia is responsible and failed to prevent everything that happened in Srebrenica." Serbia's electoral system was reformed in 2011, such that parliamentary mandates were awarded in numerical order to candidates on successful lists. Palalić received the eighteenth position on the DSS's list and was re-elected when the list won twenty-one mandates. The party once again served in opposition. He was promoted to the eleventh position on the party's list for the 2014 election but failed to be re-elected when the party failed to cross the electoral threshold needed to win representation in the assembly. He subsequently left the DSS.
In September 2014, Palalić joined with other former DSS officials to form a new organization known as the Serbian People's Party. The party contested the 2016 parliamentary election on the Serbian Progressive Party's Aleksandar Vučić – Serbia Is Winning list; Palalić received the forty-third position and was easily returned to the assembly when the list won a landslide majority with 131 out of 250 seats. In the 2016–20 parliament, Palalić was a member of the assembly's foreign affairs committee and the committee on the judiciary, public administration, and local self-government; a member of Serbia's delegation to the parliamentary assembly of the Collective Security Treaty Organization ; the head of Serbia's parliamentary friendship group with Liechtenstein; and a member of the parliamentary friendship groups with Armenia, Belarus, China, France, Greece, Italy, Kazakhstan, Russia, Spain, and Switzerland. Three SNP candidates were elected in the 2016 election. All, including Palalić, served as members the Progressive Party's parliamentary group. Palalić received the forty-third position on the Progressive Party's list in the 2020 Serbian parliamentary election and was elected to a sixth term when the list won a landslide majority with 188 mandates.
