Palazuelos equalised as Hearts came from behind to shock Rangers
Rangers' title hopes suffered another blow after they were stunned by two goals within three minutes as Hearts came from behind to draw at Ibrox.
Kyle Lafferty fired Walter Smith's side ahead with an 18-yard drive after nine minutes and Barry Ferguson blasted in the second on the stroke of half time.
But Christos Karipidis headed in after 64 minutes despite DaMarcus Beasley's attempt to clear off the goal-line.
Ruben Palazuelos fired in the second and Hearts deservedly took a point.
It leaves Rangers two points behind Scottish Premier League leaders Celtic, who play Dundee United on Sunday.
The signs had looked ominous for second-top Rangers ahead of kick-off, with Madjid Bougherra and Kirk Broadfoot both failing late fitness tests.
With David Weir suspended, it meant a makeshift central defensive pairing of veteran Christian Dailly and converted forward Lee McCulloch.
Beasley was a surprise inclusion on the wing at the expense of Kenny Miller, while Kris Boyd returned up front to partner Lafferty, and the new line-up paid dividends early on as Rangers took just nine minutes to break the deadlock.
David Obua played a slack ball across the park from the left-back position, it was intercepted by Beasley and he found Lafferty with a swift pass to the edge of the area.
The Northern Ireland international fired home from 20 yards to seemingly ease any trepidation Rangers fans might have felt in the aftermath of last weekend's Co-operative Insurance Cup final defeat to Celtic.
Jamie McDonald was in Hearts' goal in place of the suspended Janos Balogh, while Marius Zaliukas was handed his first outing since serving a four-match ban, and they were given a stiff examination as Rangers looked to extend their lead.
Ferguson put Rangers in control with the second goal against Hearts
Steven Whittaker sent an effort across the face of goal, Beasley sent a chip just wide of the far post and Barry Ferguson had a couple of long-range efforts as Rangers took control.
Hearts were rarely seen as an attacking force and, when they did threaten, Christian Nade made a mess of an attempted header.
Rangers suffered a blow after 35 minutes when Lafferty was stretchered off the field, to be replaced with nacho Novo, after pulling up injured after an attempted quick turn inside the penalty box.
But the lead was extended in stoppage time when Pedro Mendes picked out Ferguson in the clear 16 yards from goal and the Rangers captain fired the ball into the far corner of the net.
Hearts manager Csaba Lazslo used the half-time break to bring on striker Calum Elliot for winger Deividas Cesnauskis as he ditched the conservative approach in an attempt to salvage something from the game.
There were initially no signs of any change in the pattern of play and Rangers could have gone further ahead when Novo was left face-to-face with the goalkeeper but sent his drive off the outside of the post from 15 yards.
Hearts' response came out of the blue as they scored twice in three minutes.
Allan McGregor did superbly to turn wide a long-range effort from Elliot.
But, from Bruno Aguiar's corner, Zaliukas turned the ball into the six-yard box and referee Craig Thomson decided that Beasley had been unable to prevent Karipidis' close-range header crossing the line.
The sides were level when Elliot headed an Obua cross into the path of Palazuelos to fire home from 14 yards.
That appeared to take the wind out of Rangers' sails and it was Hearts who came close to a winner when McGregor had to beat away a fine drive from Elliot in the dying seconds.
Rangers manager Walter Smith
"I still think there will be twists and turns in the run-in.
"We still have a home game against Celtic. The pressure is on us as the chasing team to win it.
"I share the fans' feelings of frustration and anger as we were 2-0 up after an hour in probably the best home performance for a long time.
"We had a great chance to go 3-0 up, but Nacho Novo was unfortunate to hit the post and they went up and scored.
"I feel a bit sorry for the lads who came in, Lee McCulloch and Christian Dailly, as I felt they played very well."
Hearts manager Csaba Laszlo
"It is Mother's Day tomorrow and we gave Rangers gifts.
"But you must have the will and belief in the system and I believe in my team.
"We changed it tactically at half time and, to make it 2-2 after being behind 2-0 and be the team that goes close to winning, I must compliment my team."
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