A much-changed Liverpool fought hard, but came up short as Karim Benzema scored a dominant Real Madrid’s only goal in their Champions League match.
The Frenchman turned in Marcelo’s low cross after Simon Mignolet had done well to keep out prior efforts from Cristiano Ronaldo and James Rodriguez.
Liverpool threatened briefly after the break as Adam Lallana fired just wide.
But Real remained in control and Steven Gerrard and Raheem Sterling’s arrival off the bench could not turn the tide.
And Arsenal moved to the brink of the Champions League’s last 16 despite blowing a 3-0 lead against Anderlecht.
Mikel Arteta’s penalty put the Gunners ahead after Danny Welbeck had been fouled by Chancel Mbemba.
Alexis Sanchez doubled the lead with a stunning 20-yard volley before Alex Oxlade-Chamberlain added the third.
Anthony Vanden Borre reduced the deficit from close range before scoring from the penalty spot, with Aleksandar Mitrovic equalising in the last minute, reports the BBC