The Nerazzurri go into the encounter at San Siro as one of five teams who are still perfect in the league, with Walter Mazzarri's men following up their opening-day victory over Genoa with a convincing 3-0 triumph at Catania.
"We've had a good start," Palacio said. "But there are teams that are much stronger than us like Juve, Napoli and Milan.
"Hence, winning the Scudetto will be very difficult for us although we will fight and work for that."
Defeating Juve in the Derby d'Italia would be a major confidence boost for an Inter side that is trying to make up for last season's dismal ninth-placed finish.
That outcome cost coach Andrea Stramaccioni his job and meant Inter missed out on European football in 2013-14.
"We are taking it one game at a time knowing that we are still making lots of mistakes, as Mazzarri continuously tells us," Palacio said.
"We have to play against Juve as though this was our final game.
"We need to put them under pressure, especially (Juve midfielder Andrea) Pirlo, who is the brains behind the team."
Juventus, who begin their Champions League adventure against Galatasaray next week, have no doubts Inter will battle for the Scudetto.
"I think Inter have the potential to have a great season," Bianconeri coach Antonio Conte said.
"Mazzarri is a great coach and knows how to manage his players in order to get the best out of them.
"It is a very important game from a psychological standpoint, especially for Inter.
"We will have to keep a close eye on Palacio.
"Even though it is a big match it is still worth three points just as all the others."
Juve are without injured winger Simone Pepe while Montenegrin forward Mirko Vucinic is doubtful due to a muscular problem.
Spain international Fernando Llorente is set to partner Carlos Tevez in Juve's attack.