"We did everything. Nothing to regret," Guardiola said. "We are sad because we didn't win, but we played much better - better than against United last season."
Haaland doesn't take penalty
Despite its troubles, City went into the sun-soaked final as the overwhelming favorite, as Guardiola looked to collect his 16th major trophy for the club.
But in front of more than 84,000 spectators, Palace went ahead in the 16th minute when Eze swept home Daniel Munoz's cross from inside the box at the end of a swift break.
Marmoush's moment came 20 minutes later when Tyrick Mitchell brought down Bernardo Silva and referee Stuart Atwell pointed to the spot.
Despite City's top scorer Erling Haaland being on the field, Marmoush placed the ball and his shot low into the corner was pushed away by Henderson, unleashing almost as big a roar as Eze's goal.