LIVERPOOL -- Manuel Pellegrini insisted Manchester City's title challenge is not over after a 2-1 defeat to Liverpool but admitted it is getting more difficult for them to retain their crown.
The City manager accepted that Liverpool deserved to win after goals from Jordan Henderson and Philippe Coutinho condemned his side to a second successive defeat.
City, who have overcome eight- and nine-point deficits to become champions in 2012 and 2014, remain five points behind leaders Chelsea but Jose Mourinho's side now have a game in hand -- away at Leicester.
And Pellegrini said in a news conference: "We never give up on the title. In football you never know what will happen.
"It is more difficult when you have less games and you continue with the same points but the team must think about the next game."
Pellegrini praised Henderson and Coutinho for their long-range strikes but criticised his own team for conceding possession too often.
"It was a close game but Liverpool won because they scored two beautiful goals," he added. "We cannot lose so many balls with the technical players we have. In the first half we lost too many balls, especially in the first 15 minutes."
Pellegrini again stuck with the 4-4-2 system he used in defeat to Barcelona and saw one of his strikers, Edin Dzeko, score.
"Playing two up front at Anfield was the best decision," he said. "It was a close game and they won the game when we had one striker on."