A cheeky backheeler from Argentinian striker Rodrigo Palacio four minutes from time secured a 1-0 win for Inter against Milan in the Derby della Madonnina in Italy's Serie A on Sunday.

Inter, claiming their eighth win of the season, had dropped to sixth after Verona's 4-1 win earlier but reclaimed fifth spot to sit five points off Napoli in the third Champions League qualifying spot and 15 behind leaders Juventus.

Sitting in 13th place and 17 points behind third place, Milan had plenty of incentive and enjoyed the lion's share of chances and possession throughout.

It took Inter until the final 20 minutes to pile on some pressure and when Palacio sent a backheel beyond the reach of Milan 'keeper Christian Abbiati in the 86th minute the Rossoneri were soon lamenting their earlier misses.

In what was the 159th derby between the sides -- being watched by new Inter owner Erick Thohir -- Inter now boast 60 wins for 50 draws.

Brazil coach Luiz Felipe Scolari was also among the crowd and is likely to have been buoyed by Kaka's performance as the forward continues his quest to secure a World Cup place.

Despite Milan's dominance, Massimiliano Allegri's men lacked the slice of luck that could have made all the difference.

Kaka set up Mario Balotelli in the opening minutes but the striker's effort was blocked and the former Inter star then sent a half-volley over while under pressure on the edge of the area.

Barely a minute later, Balotelli was beaten to the rebound from Kaka's strike by Esteban Cambiasso after it had been blocked by 'keeper Samir Handanovic.

Inter were struggling to find any rhythm, their only half-chances a long distance drive from Fredy Guarin which dipped over, while Yuto Nagatomo's header from Saphir Taider's weighted free kick was wide of the upright.

Milan's dominance had silenced the largely Inter crowd but they were in uproar on 40 minutes when claims for a penalty went unheard after Palacio tumbled under pressure from Cristian Zapata.

Inter finished the half showing more promise, Cambiasso's header from a well-struck Taider free kick going wide of Abbiati's far post.

Despite the mediocrity, Inter coach Walter Mazzarri kept faith with his starting XI for the restart but it was Milan who showed more promise initially.

On 53 minutes Balotelli's angled strike was palmed away, with Andrea Poli failing to connect with the rebound.

Two minutes later Balotelli came close again, sneaking behind the Inter defence to send a first-timer just wide of Handanovic's far post with the outside of his boot.

Taider was replaced by Mateo Kovacic just before the hour and the Croatian's introduction was to get on the wrong end of a crunching tackle by Nigel De Jong, which earned the Dutchman a yellow card.

Mazzarri also replaced captain Javier Zanetti with Zdravko Kuzmanovic soon after, but the Serbian added to frustrations when he fired well wide of the target after a short corner from Nagatomo.

With 15 minutes remaining Allegri went for broke, replacing midfielder Riccardo Saponara with striker Alessando Matri.

However Inter upped the tempo and came close when Nagatomo's weighted pass across goal was just too far for Palacio, with Kuzmanovic missing the target on the follow-up.

A draw looked to be on the cards when Abbiati pulled off a superb save down low after Palacio had turned and shot from six metres.

However the veteran 'keeper could do little when Palacio connected with Guarin's pass in a crowded area to beat Abbiati.

Milan finished the game with 10 men when Sulley Muntari saw red for a needless foul on Kuzmanovic.