Inter, who also beat Bayern in last year's final, were on the brink of going out until Macedonian Pandev struck to put the Italians through on the away goals rule after losing 1-0 in the first leg last month.
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Coach Leonardo's team became only the second side to advance in the competition after having lost the first leg at home.
"To advance like that is just unbelievable. For Pandev to score such an amazing goal, a goal that will go down in history, is just incredible," Leonardo told reporters.
"We showed amazing team spirit today, we showed emotional and tactical intelligence," said the 41-year-old.
Inter made a dream start with a fourth-minute goal from Cameroon striker Samuel Eto'o, his eighth in this season's competition cancelling out Bayern's 1-0 win in Italy in the first leg.
The Bavarians levelled through Mario Gomez's eighth Champions League goal of the campaign in the 21st minute.
"We stuck in there, even when we were 2-1 down I believed in the team and knew that even if we need to create half a chance we would score," said Leonardo.
"It was a self-inflicted defeat," said Van Gaal who will leave the club at the end of the season.
"We should have finished them off much earlier but instead we just let them score with their only two chances in the second half. That's football."
Eto'o was then invo
