Manchester City 2-1 Everton: Gabriel Jesus double sees off Toffees
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Gabriel Jesus (second right) now been directly involved in 69 goals in 75 starts for City in all competitions
Pep Guardiola says Manchester City will "never give up" after the champions narrowed the gap on leaders Liverpool to 11 points with a 2-1 win over Everton.
Gabriel Jesus scored twice as City survived a nervy finish to end Carlo Ancelotti's unbeaten start as Toffees manager.
They remain third in the Premier League and one point behind second-placed Leicester, who won 3-0 at Newcastle. Liverpool meanwhile can restore their 13-point lead at the top with victory against Sheffield United on Thursday, one of two games in hand they have on their title rivals.
"When you are far away from the first position sometimes people give up, but we never give up," Guardiola said. "We played great so I'm delighted for the guys. This period is so tough. We did really well. Three more points and closer to Leicester."
City had to wait until the second half to break down a well-drilled Everton side who defended with discipline and in numbers, but Jesus provided the spark of genius they needed.
He collected an Ilkay Gundogan pass on the edge of the area to put Guardiola's side ahead with a brilliant curling right-footed shot into the top corner that Jordan Pickford got a hand to, but could not keep out.
Seven minutes later, the Brazilian made it 2-0, this time with his left foot, when he darted on to a Riyad Mahrez pass and buried a low shot past Pickford.
The City fans - who had earlier seen a close-range Phil Foden strike ruled out for offside by the video assistant referee - did not celebrate either goal fully until the game had restarted.
Guardiola's side also had to wait before securing the three points, with a couple of Ancelotti tactical tweaks seeing Everton go on the attack, and soon pull a goal back.
It came courtesy of a City mistake when stand-in goalkeeper Claudio Bravo, playing because Ederson was ill, tried to play out from the back but under-hit his pass.
Seconds later the ball was in the back of his net when Theo Walcott's deflected cross found Richarlison unmarked to tap in at the back post.
Alarm bells were suddenly ringing for City, who had capitulated from 2-0 up to lose against Wolves last week - albeit with 10 men for most of the match - but this time they saw the game out.
While Everton looked dangerous when they came forward, the only real scare for the home side came when substitute Moise Kean found space in their area to acrobatically fire wide.
City will now turn their attentions to the domestic cup competitions as they begin their defence of the FA Cup against League Two Port Vale in the third round on Saturday before travelling to Manchester United in the Carabao Cup semi-final first leg on Tuesday.
"We have to keep going," added Guardiola. "We have FA Cup then the EFL Cup. Other teams dropped points for the top four so it was an important win."
Guardiola makes changes to try to make up ground
Man City 2-1 Everton: Everyone was 'incredible' today - Pep Guardiola
The last decade saw City record the highest number of Premier League titles (four), points (818), wins (251) and goals (845).
But they began the 2020s playing catch-up, not just to runaway leaders Liverpool, but also to Leicester, who remain a point clear of them in second place.
Guardiola's attempts to make up ground, and perhaps improve a porous defence before their Champions League campaign resumes next month, saw him change his formation as well as his personnel at the end of a frenetic festive period.
In a shape first seen against Sheffield United on Sunday evening, Rodri, usually a holding midfielder, dropped into a three-man central defence, with Gundogan and Kevin de Bruyne operating as a dual midfield pivot in front of them.
Fourteen of Manchester City's past 18 home league goals have come in the second half
That gave City's wing-backs, Benjamin Mendy and Joao Cancelo, licence to roam forward and they both impressed on the ball in the opposition half.
Rumours persist about Cancelo's future at the club but he provided a perfect cross for Foden to find the net in the first half, only for VAR to show that Mahrez was offside earlier in the move.
There remain doubts about City at the back, however, particularly from set-pieces - Yerry Mina and Dominic Calvert-Lewin both could have punished the hosts for poor marking at corners - and there was relief in the stands and on the pitch at the final whistle.
Ancelotti acumen clear, even in defeat
Man City 2-1 Everton: Toffees were 'too shy' in first half - Carlo Ancelotti
This was by far the toughest assignment of Ancelotti's early days as Everton boss and yet, even in defeat, his acumen was evident.
The Italian, forced into a late reshuffle after losing Bernard to injury in the warm-up, packed the middle of the pitch early on and made it difficult for City to play through his side in a first half where his priority was clearly to keep the hosts quiet.
Yet Everton still managed to fashion two decent chances for themselves before the break, with Seamus Coleman forcing Bravo into a fine reflex save and Mina wastefully heading over.
And Ancelotti's ability to turn his side's mindset from defence to attack was clear after they fell 2-0 down, when he sent Walcott and then Kean on, and began to take the game to City.
They eventually fell short of a comeback but that was not down to a lack of effort or ideas.
Ancelotti now has a first defeat to go with his opening two wins as Everton boss, but this was another encouraging display to take into his first Merseyside derby at the weekend.
Man of the match - Gabriel Jesus (Man City)
The 22-year-old striker seems to particularly enjoy playing against Everton - he has now scored seven goals in five appearances against them, and could have had more here on top of his pair of fine finishes. Jesus came within inches of his first Premier League hat-trick when he slammed a shot against Pickford's post, and forced the Toffees keeper into a fine low save before the end.
Brazilian magic - the stats
Manchester City have won five consecutive league meetings with Everton for the first time.
Everton have lost seven of their past 10 away games in the Premier League (W2 D1).
Everton manager Carlo Ancelotti has lost twice as many Premier League games against Manchester City (four) as he has against any other opponent (Everton and Liverpool, two).
City have scored 14 of their past 18 home league goals in the second half of those matches (78%).
This match was only the fourth Premier League game to see a Brazilian score for both sides (excluding own goals), after Liverpool v Spurs in March 2019, Chelsea v Liverpool in October 2015 and Middlesbrough v Manchester City in May 2008.
Only Kevin de Bruyne (23) has more assists in all competitions for City since the start of last season than Riyad Mahrez (22).
Richarlison scored his 20th league goal for Everton in his 56th Premier League appearance for the club; only Kevin Campbell (31), Romelu Lukaku (43), Tony Cottee (44) and Yakubu (53) reached 20 goals in fewer appearances for the Toffees in the competition.
What's next?
FA Cup holders Manchester City start their defence of the famous old trophy on Saturday when they host League Two side Port Vale (17:31 GMT).
Everton, who have not won a trophy since the FA Cup in 1995, go to neighbours and Premier League leaders Liverpool on Sunday (16:01) in their third-round tie.