Cup qualifier against Bolivia, with Palacio playing the last eight minutes of the match. He was selected by the coach José Pékerman for the following year's World Cup, and was given the shirt number 14. He made his debut in the tournament, entering the pitch in the 64th minute and helping the team win the first match of Group C against the Ivory Coast in a 2–1 victory. He did not play any more matches until the end of the tournament, with Argentina being eliminated from the tournament in the quarter-finals after losing 4–2 on penalties (1–1 in extra time) against Germany. Under new Argentina coach Alfio Basile, Palacio was selected for the 2007 Copa América and given the shirt number 7. He played his first match of the tournament in the team's last match in Group C against Paraguay, starting and playing 90 minutes in a 1–0 victory at the Estadio Metropolitano de Cabudare. Argentina finished as group winners, beating the United States, Colombia and Paraguay. He made his second appearance after playing the last 12 minutes in a 3–0 win against Mexico, securing Argentina's place in the semi-finals of the tournament. In the final, he was an unused substitute as Argentina lost 3–0 to rivals Brazil. On 15 June 2008, more than three years after his debut with Argentina, Palacio scored his first goal for his country via equalizer in the 93rd minute in a 1–1 draw against Ecuador for the 5th round of 2010 World Cup qualification. He played only two matches in 2008, and did not play any minutes for the national team during 2009 and 2010, meaning that he was not included in the squad for the 2010 World Cup by coach Diego Maradona. After his good form with Genoa during the second part of the 2010–11 season and first part of 2011–12, Palacio received his first call-up by new national team coach Alejandro Sabella for the 2014 World Cup qualifying match against Venezuela. On 11 October 2011, he played his first match for the national team after a three-year absence, entering the field in the final 15 minutes of a 1–0 loss against Venezuela, with defender Fernando Amorebieta scoring the only goal of the match. After an impressive 2012–13 season with Inter, Palacio became a regular member of the Argentina national team under Sabella. During the qualifiers for the 2014 World Cup, he played