Carlo Ancelotti's side rescued a point in the derby at the Vicente Calderon, but failure to win all three means the Catalans are right back in the race with 12 rounds left.
The capital clash was a heavyweight contest without a knockout blow. Madrid struck first as Karim Benzema headed home within three minutes, before Atleti turned the contest on its head with goals from Koke and Gabi before halftime and Cristiano Ronaldo rescued a point for the visitors with eight minutes left.
Either side could have won it, but neither did and a point seemed the fairest outcome of all. Despite protests from the home side and, in particular, Diego Simeone, Benzema was onside for the opener. Atletico, however, was unfortunate not to win a penalty after 11 minutes when Sergio Ramos scythed down Diego Costa.
That was the clearest of three appeals for the Rojiblancos, but by halftime Simeone's side had turned the match around all on its own, following an angled drive from Koke and a stunning strike by Gabi right at the end of the opening period.
|MATCH FACTS | Atleti 2-2 Madrid
But there was to be another twist as Madrid made it 2-2 thanks to Ronaldo's instinctive right-footed finish in the final 10 minutes and then almost won it through Luka Modric right at the end.
"Atletico tried to make the match violent," Ancelotti said after. "That's not the way we play and we looked for a way back right up until the end."
An Atleti win would have seen the two teams tied on 63 points (with Barca likely to join them there later on Sunday), but Ronaldo's late equalizer means Madrid remains on top, three clear of its city rivals with 12 games still left.
"Some will be annoyed, but we are still alive," Simeone said. "I am proud of this squad - they are a group of men fighting against everything and against everyone."
The Argentine was frustrated by refereeing decisions he believed went against his side, but refused to elaborate on his words, simply saying: "It's not worth it."
Ancelotti's side, meanwhile, is now unbeaten in 28 games and has matched the best streak achieved by Pep Guardiola's brilliant Barcelona (23 wins and five draws in 2010-11). More significantly, however, the team remains in control of its own destiny in La Liga.
"It was a good reaction," the Italian said. "We drew a game which we were losing. We can be satisfied because Atletico Madrid are a very good team - especially at home."
Win all of its remaining matches and avoid defeat in the Clasico clash at home to Barca in late March and Madrid will be champions. Easier said than done, of course, and Sunday's stalemate in the capital will give the Catalans confidence in the Primera Division run-in, while Atleti are also very much in it as well.
Madrid missed the chance to take a significant step towards the title but remain favorites to win it after coming through a tough test. The fact that Ancelotti's men took one point and not three, however, means this race remains far from over.
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