Manchester City hosted the defending Premier League champions Leicester at Etihad Stadium on Saturday looking to cement their place in the Premier League's top four spots.
But a superb volley from Shinji Okazaki gave Leicester some momentum heading into the second half and they exploited City's nerves to nearly snatch a point. Leicester, who saw their title officially taken from them by Chelsea on Friday, won the reverse fixture in December 4-2 but found themselves behind in controversial fashion here.
City took the lead on 29 minutes when Silva scuffed the ball home but there was some controversy with Sterling seemingly in an offside position.
Manchester City have now played the same amount of games as Liverpool, who need to win at West Ham on Sunday to go back above them. It's bad luck from our point of view, but two City players were in the penalty box.
Leicester were the better side after the break and Riyad Mahrez had the chance to equalise from the penalty spot but his effort was ruled out for a weird double contact.
Guardiola said: "The shot was a little bit unusual and when I saw the reaction from (goalkeeper) Willy (Caballero) I understood immediately it was two touches and the referee was so fearless to interpret the rule".
The other players set to leave City this summer include Jesus Navas, Willy Caballero, Gael Clichy, Bacary Sagna and Yaya Toure, who are all out of contract. "When you play against them you understand why they were champions".
The hosts looked to be cruising to an easy win when, on 42 minutes, Okazaki produced a superb acrobatic finish from a Marc Albrighton centre.
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"I don't know if Raheem touched the ball", he told Sky Sports.
Leicester was awarded a penalty in the 76th minute when Riyad Mahrez was fouled.
When asked if a Premier League return is the most likely outcome in the summer transfer window, the two time Premier League victor told Sky Sports' Soccer AM: "More than likely, I'd say, but that's me with no knowledge, I've got no firm contact with anybody, but whatever I'm doing I'd love to be permanent where I go".
"We made a good performance in the first half and we scored our chances".
The Citizens entered the match just one point behind Liverpool for third in the league table.
Fernando Llorente and Kyle Naughton were both on target for the Swans, with the Welsh outfit on 38 points with one game left, the same as Crystal Palace, which has a superior goal difference. It's the first or second time I've seen that in my life.
Sanchez was taken off by Arsene Wenger after his goal, with there still time left for Giroud to add a fourth late on after turning in Aaron Ramsey's delivery.
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