Napoli produced another poor away performance, losing 3-1 at Dnipro Dnipropetrovsk, and Udinese, the fourth Italian side, suffered a shock 3-1 defeat at Young Boys where Raul Bobadilla scored a hat-trick.
Title-holders Atletico Madrid chalked up their third straight group stage win, beating Academica Coimbra 2-1, but Athletic Bilbao, last season's runners-up, were left on the brink of elimination after losing 2-1 at Olympique Lyon.
At San Siro, Palacio headed in a cross from fellow Argentine Diego Milito one minute after Partizan's Lazar Markovic nearly scored for the Serbs on the break.
The win left Inter and Rubin Kazan, who beat Neftci 1-0, level on seven points from three games at the top of Group H.
Lazio were gifted a 25th-minute lead in Athens when Giourkas Seitaridis's back pass caught goalkeeper Orestis Karnezis out of position and the ball rolled into the net. Toche equalised for Panathinaikos in stoppage time.
Lazio stayed top of Group J with five points, one clear of Maribor who drew 1-1 at home to Tottenham Hotspur.
Jimmy Briand scored an 86th-minute winner for Olympique Lyon to give the Group I leaders their third straight win and leave Marcelo Bielsa's Athletic third with only one point.
FALCAO RESTED
Atletico coach Diego Simeone again rested Radamel Falcao who is yet to play in the competition in which he has been the top scorer for the previous two seasons, firstly with Porto and then his current side.
They were still too strong for their Portuguese opponents as second half goals from Diego Costa and Emre Belozoglu left the Mattress Makers top of Group B with nine points. Salim Cisse replied for the Portuguese visitors.
Bodadilla gave Young Boys a fourth-minute lead when he side-footed in a pass by fellow Argentine Gonzalo Zarate, added a second in the 71st minute following a mistake by Pablo Armero and completed his evening by converting a penalty.
Andrea Coda replied for Udinese in the Group A match.
Liverpool took advantage of Udinese's slip to go top with a 1-0 win over Russian Premier Leaders Anzhi Makhachkala thanks to a second half goal by Stewart Downing.
Dnipro maintained their 100 percent record in Group F after Artem Fedetskiy put them in front from a free-kick in the second minute.
Brazilian pair Matheus and Giuliano scored either side of half-time for the Ukrainians before Edinson Cavani pulled one back for Napoli, beaten 3-0 at PSV Eindhoven in their previous outing, with a penalty.
Three of Germany's four teams won, Bayer Leverkusen leading the way with a 4-0 demolition of Rapid Vienna away from home to go top of Group K.
Didier Ya Konan scored with the last kick of the match to give Hannover 96 a 2-1 win at Helsingborg which took them top of Group L and even Bundeslig
