The Sun says Palacios and Wigan Athletic teammate Luis Antonio Valencia are both major targets for United boss Sir Alex Ferguson ahead of the summer market.

United No2 Carlos Queiroz watched Wigan's game with Birmingham where £6m-rated midfielder Palacios, 23, and £4m winger Valencia, 22, starred in a 2-0 win.

Palacios has been a key figure in Wigan's relegation battle since his January switch from Honduran side Olimpia.

Wigan boss Steve Bruce also signed Palacios on loan when he was the manager of Birmingham earlier this season.

Valencia moved to Wigan after impressing for Ecuador in the 2006 World Cup.