The 30-year old Spaniard is available as a free agent after leaving Finnish outfit Honka but instead of landing at Partick, is likely to join Championship side Yeovil Town.
Archibald said: "We had a chat with him but he couldn't do anything about it. He decided to go elsewhere."
Palazuelo joined Hearts from Gimnastic in 2007 and made over 100 league appearances for the Edinburgh club before leaving for Alaves in 2011.
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