Palacios hsa won more than 40 caps
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Birmingham have signed Honduras midfielder Wilson Palacios on loan until December.
Blues will then have the option to make the deal for the 23-year-old Olimpia player permanent until 2010.
Arsenal boss Arsene Wenger had the player on trial but opted not to sign him because he already had eight midfielders at the club.
Palacios, who has more than 40 caps, began his career with Club Deportivo Victoria, before moving to Olimpia.
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