Madrid dominated the first half with Mariano and Raphael Varane heading off the bar in the space of two minutes.
The Brazilian rounded Fraser Forster to score his fifth goal in as many games as Carlo Ancelotti's side moved level on points with Liverpool and two points behind fourth-placed West Ham with a game in hand.
The 33-year-old Briton produced a gritty fightback to beat Dutch wildcard Robin Haase at the Rotterdam Open.
Blades goalkeeper Aaron Ramsdale produced a string of fine saves to frustrate Liverpool in the first half as the Reds' recent lack of cutting edge in front of goal looked set to continue.
Franck Kessie put Milan ahead from the penalty spot after Roma's Federico Fazio fouled Davide Calabria.
Ole Gunnar Solkjaer's side remain second but are now 12 points adrift of City while the result left Chelsea outside the top four a point behind West Ham United.
Lionel Messi scored and created the other as Barcelona beat in-form Sevilla and went within two points of La Liga leaders Atletico Madrid.
Pep Guardiola says Manchester City's 20-match winning streak is 'one of the greatest achievements in our careers' - but is it merely a step towards becoming the first side to complete the quadruple?
Juventus were held to a draw by mid-table Verona and now sit seven points behind Serie A leaders Inter Milan.
Brunei Muara District Scouts Association today organised the Brunei Darussalam Scouts Association's Charity Run. The event began and ended at Taman Haji Sir Muda Omar Ali Saifuddien in the capital.
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