With seven matches to play, City, chasing their first top flight title since 1968, moved on to 71 points, two behind United who would go five clear at the top if they beat lowly Blackburn Rovers at Ewood Park on Monday.
Arsenal's seven-match winning league run ended when lost 2-1 at strugglers Queens Park Rangers while Chelsea maintained their push for a top four spot with a 4-2 win at Aston Villa.
Wolverhampton Wanderers are beginning to look doomed following their seventh successive home league loss as they went down 3-2 against Bolton Wanderers.
That result left Wolves on 22 points, six adrift of Blackburn, QPR and Wigan Athletic, who continued their revival with a 2-0 home win over Stoke City.
Manchester City manager Roberto Mancini could not really explain why their form had dipped after they led the table for almost five months until losing at Swansea City three weeks ago.
"They had a lot of chances, we made some mistakes and that's it - we can do nothing at the moment," he told Sky Sports.
"We have been really unlucky. We lost two or three important players and we didn't play well, but at least at the end we scored twice and got a point."
Sunderland ended City's perfect home record of 15 straight league wins this season, having taken the lead through Sebastian Larsson after 31 minutes with a shot from the edge of the box.
City replied with a Mario Balotelli penalty after 43 minutes following a foul on Edin Dzeko but a Nicklas Bendtner header put Sunderland 2-1 ahead before half-time and Larsson made it 3-1 10 minutes into the second period.
Sunderland still led with five minutes to play before Balotelli pulled one back and Aleksandar Kolarov, who had an angry exchange with Balotelli over a free-kick earlier in the second half, scored to save a point a minute later.
ARSENAL BEATEN
Lowly QPR, battling against an immediate return to the Championship, were too good for Arsenal at Loftus Road, going ahead through Adel Taarabt's first Premier League goal with a drilled shot after 22 minutes.
In-form Theo Walcott equalised for the visitors in the 37th but Arsenal, who have been in superb form in recent weeks, lost their way in the second half.
Samba Diakite scored QPR's winner with a first time shot - his first goal for the club - leaving Arsenal third in the table on 58 points.
"We made mistakes and our performance was not good enough," said Arsenal manager Arsene Wenger. "We lacked the extra gear, and when you lack that you don't win games."
QPR boss Mark Hughes told Sky Sports: "We showed a lot of discipline and resilience to see the game out. We had a fantastic night here recently when we beat Liverpool but today was even better."
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