It started well for the Blues when Jack Grealish fired City ahead in the first half before Rico Lewis doubled our lead after the break.
We looked to be heading for all three points in our final match before heading to Saudi Arabia for the FIFA Club World Cup.
But Crystal Palace scored with their only two attempts on target, late in the game, to snatch a point and make it three successive league draws at the Etihad.
FOLLOW CITY AT THE CLUB WORLD CUP
Jean-Philippe Mateta pulled a goal back in the 76th minute with a goal on the break before the striker was caught by Phil Foden in the box in the dying moments and Michael Olise made no mistake from the penalty spot.
And there was no time for City to push forward for a winner to leave us fourth in the Premier League.
