A sublime brace from Manchester United's Ashley Young helped to sink Tottenham's title challenge in a 3-1 win and closed the gap on City at the top of the Premier League to two points.
Harry Redknapp was without three first-choice midfielders as the Tottenham manager was forced to leave out Gareth Bale and Rafael van der Vaart due to injury, while the influential Scott Parker was suspended. But Spurs started brightly, and enjoyed much of the first-half possession. The home side thought they had broken the deadlock when Emmanuel Adebayor had the ball in the back of the net, but referee Martin Atkinson disallowed the goal.
Originally starting on the right wing, Aaron Lennon made an almost instant impact when he switched to the left, beating Phil Jones and pulling the ball back for Louis Saha, but the Frenchman's strike was blocked on the line by team-mate Adebayor. The former Arsenal striker managed to backheel the ball into the net, but was judged to have handled the ball beforehand by Atkinson.
Against the run of play, it was United who headed into the break ahead courtesy of Rooney's 18th league goal of the season - evading the attentions of England team-mate Kyle Walker to nod Young's corner low past Brad Friedel.
Spurs continued to press after the interval; Jake Livermore's strike deflected off Saha, forcing David De Gea to dive low to his right. But just moments after Benoit Assou-Ekotto's dangerous free-kick curled narrowly wide of De Gea's left post, Young doubled United's advantage.
United profited from a defensive lapse from Spurs, taking a quick throw-in to release Nani on the right, whose tempting ball across the face of goal found Young, who showed impressive technique to lash the ball into the far corner.
And his second came just nine minutes later, receiving Patrice Evra's pass at the top of the Spurs box before curling a stunning strike past Friedel.
Defoe pulled one back for Spurs with three minutes remaining, but it was merely a consolation as United underlined their title credentials while all but ending Tottenham's faint title hopes.
Shola Ameobi struck in injury-time to prevent Newcastle suffering defeat to arch-rivals Sunderland in a spiteful Tyne-and-Wear derby, earning the Magpies a 1-1 draw in a game that saw two Sunderland players shown red cards.
Alan Pardew's Newcastle side had the chance to move level with fifth-placed Chelsea, three points behind Arsenal in the hunt for a top-four finish, but in an ill-disciplined game of football that produced nine bookings and two red cards, they had to settle for a draw at St James' Park.
Mike Williamson's unnecessary first-half shirt tug allowed the visitors to take the lead through Nicklas Bendtner's cool penalty, and it was an advantage they maintained until the 91st minute despite a second-half red card for Stephane Sessegnon. However, Ameobi came off the bench to haunt Sunderland once again, netting his seventh league goal against the Black Cats, before Lee Cattermole talked his way to a red card after the final whistle.
Sunderland came into the match having had a man sent off in two of their last three league encounters with Newcastle, and they arguably should have lost another inside the opening 40 seconds when Cattermole lunged into a poor challenge on Cheik Tiote.
However, it was Newcastle's indiscipline that led to the opening goal for Sunderland as Williamson needlessly yanked the shirt of Michael Turner inside the area, allowing Bendtner to convert past the outstretched hand of Tim Krul, who dived the right way.
Newcastle responded by hitting the bar through Demba Ba before the break, and their plight was aided on the hour when Sessegnon slammed a forearm into Tiote's throat - earning a straight red card. The home side upped their pressure and had the ideal chance to level with eight minutes left, when Fraizer Campbell needlessly conceded a penalty, but Simon Mignolet guessed right to deny Ba.
However, one last ball was thrown into the Sunderland box, and this time Ameobi was able to squeeze it past Mignolet at the back post to lift the roof off St James'.
Wolves dropped into the bottom three after suffering a 5-0 defeat to Fulham in the day's second kick-off, dropping below Blackburn on goal difference. Pavel Pogrebnyak was the Craven Cottage hero, netting a hat-trick to outshine-two goal Clint Dempsey.
Pogrebnyak's first arrived late in the first half when he showed his poacher's instinct to head home Damien Duff's cross. The Russia international then doubled his tally before half-time when he expertly volleyed in a right-wing delivery from Andrew Johnson.
Dempsey, inevitably, got in on the act early in the second period, before Pogrebnyak completed his hat-trick with six-yard tap-in. It was left to Dempsey to add the final touches, slamming home a left-footer into the top corner to complete a miserable day for Wolves.