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The Ivorian marked his return to the starting XI with two goals as Pep Guardiola's men moved nearer to the Premier League summit, much to Alan Pardew's chagrin
The visitors, having won only one of their previous five top-flight games, showed six changes from the 1-1 draw against Middlesbrough and it was Toure's inclusion that set tongues wagging.
It took the Ivorian 39 minutes to recapture some of the old magic as a superb interchange with Nolito preceded his emphatic opener.
Alan Pardew's side refused to give in and almost levelled when Christian Benteke's header brought a fine stop from Claudio Bravo 10 minutes after the interval.
Sergio Aguero could have sealed it midway through the second half for City – who lost Vincent Kompany to injury – but his shot was kept out by a combination of Wayne Hennessey and Joel Ward.
In the next attack, Palace did get their equaliser as substitute Connor Wickham drifted past Pablo Zabaleta and blasted a fierce strike beyond Bravo.
The game was up for grabs in the final 20 minutes, with City eyeing a shot at top spot and Palace desperate to put further space between themselves and the bottom three.
But it was the away side who claimed the points, Toure capitalising on some woeful set-piece defending to turn in from six yards and condemn Palace to a fifth league loss in a row.
The hosts started at a high tempo, but Wilfried Zaha failed to get a shot away after an excellent run down the right in the 11th minute.
Stunning work by Raheem Sterling, who left Martin Kelly in his wake, also went unrewarded at the other end as his low cross was cleared to safety.
There was a moment of panic in the City defence which ended with Bravo clattering into Kompany as he gathered a bouncing ball above the head of the onrushing Jason Puncheon.
Sterling was proving the visitors' most threatening outlet and his teasing 30th-minute cross was only just beyond the reach of Nolito, before Aguero failed to make clean contact with Aleksandar Kolarov's delivery inside the six-yard box.
Kompany was substituted 10 minutes before the break, having apparently failed to recover from his collision with Bravo.
And the breakthrough came four minutes later as Toure – whose only other appearance this term came against Steaua Bucharest in a Champions League qualifier in August – received a return pass from Nolito following sloppy play from Kelly and saw his powerful shot deflect beyond Hennessey.
Puncheon escaped punishment five minutes into the second half following a moment of madness when he blatantly tripped Zabaleta with the ball nowhere to be seen.
Palace should have been level in the 55th minute, but Bravo made a smart stop to deny Benteke from close range, with Aguero having a shot cleared off the line in the next attack.
There was nothing the Chilean goalkeeper could do to keep out Wickham's 65th-minute strike, though, as the half-time replacement got beyond Zabaleta and powered home at the near post.
The mood around Selhurst Park lifted in line with the noise levels, but there was disappointment in store as Kevin De Bruyne's corner somehow found its way to an unmarked Toure six yards out to win it.
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