City were far from their best against a spirited home side, but it could have been worse but for the hosts fluffing their lines in injury time.
If there’s one thing you’re assured of at Selhurst Park these days, it’s a vibrant atmosphere and today was no different.
Having pushed Arsenal close in midweek, the Eagles were fired up and determined to have a go at the Blues.
The first real threat came on eight minutes when a mix-up between Eliaquim Mangala and Ederson almost gave Christian Benteke an open goal but Mangala recovered to deflect the Belgian’s shot around the post.
On 12 minutes Gabriel Jesus fell awkwardly after a challenge on the halfway line and almost did the splits as he landed – he would soldier on for 10 minutes before leaving the pitch in tears, presumably as a result of the original injury.
Patrick van Aanholt’s 20-yard volley took a wicked deflection but was palmed around the post by Ederson as Palace continued to look dangerous, particularly when the in-form Wilfried Zaha was in possession.
City broke a couple of times through Leroy Sane and Bernardo Silva but it was substitute Sergio Aguero who came closest as he cut past two challenges before sending a deflected shot past Wayne Hennessey and against the post.
The Blues struggled to stamp some authority on proceedings, but some of their passing wasn’t quite up to the usual standards with the hectic festive fixture list perhaps taking its toll.
The teams went into the half-time break evenly poised and with everything still to play for.
Palace were pressing high and working hard when City had possession and the Blues were finding the home side a tough nut to crack.
The battle between Zaha and Kyle Walker was proving to be a fascinating tussle with neither giving an inch, matching pace and power in an absorbing contest.
Then Sterling found Sane at the back post, but the young German saw his shot well saved by Hennessey as the game began to open up a little.
Palace were sitting deeper and relying on the counter-attack speed of Zaha, but in doing so, were handing the initiative to City who began finding space behind the Eagles’ defence.
As the clock ran down in this edgy affair, Palace had the chance of the game when Zaha's low ball across the face of the six-yard box found the unmarked Andros Townsend but with the goal at his mercy he blazed high over the bar.
Then, at the other end, the ball fell to De Bruyne 10 yards out but his low shot was scrambled clear as it looked like the Belgian might settle the game.
The drama reached fever pitch in added time as the hosts were awarded a controversial penalty for a foul on Zaha but Ederson beat out Luka Milivojevic's effort to earn a draw in a frantic finish.
Ederson's penalty save ensured the Blues remain unbeaten this season in the Premier League.
Star man: De Bruyne
He didn't find a way through the Palace rear-guard but it wasn't for the want of trying.
What it means...
City see the lead at the top of the table cut by a point to 14 following Chelsea's win over Stoke and Manchester United's 0-0 draw with Southampton.
The festive period effectively ends for the Blues on Tuesday evening as Watford visit the Etihad.
Then it’s a domestic cup action double header at the Etihad with Burnley next Saturday in the FA Cup and then Bristol City in the first leg of the Carabao Cup semi-final.