* No room for Balotelli in City squad
* Newcastle two points off the drop zone (Adds details, quotes)
LONDON, Dec 15 (Reuters) - A clinical early strike by Argentine Sergio Aguero helped Manchester City beat Newcastle United 3-1 on Saturday and cut Manchester United's Premier League lead to three points.
Javi Garcia made it 2-0 by halftime and Yaya Toure wrapped up the points late on for the champions, who were determined to shake off the pain of a 3-2 stoppage time defeat by United last weekend, after Demba Ba had pulled one back for the hosts.
United, who can restore their advantage to six points when they welcome struggling Sunderland in a later kickoff, have 39 points to City's 36.
Third-placed Chelsea, on 29, will have a game in hand due to the European champions playing the Club World Cup final in Japan on Sunday.
"The performance against (Manchester United) was fantastic but today it was difficult. After that defeat we needed to start quickly and the guys were really good," City manager Roberto Mancini told the BBC.
"All of the players played very well and it could have been six or seven as we missed many chances to score."
City were a goal up after 10 minutes at St James' Park when Ivorian midfielder Toure split the defence with a superb pass to find Samir Nasri, who was adjudged to be just onside and rolled the ball back for striker Aguero to stroke home.
Nasri, mockingly described by Mancini as only half a man in the defensive wall that failed to keep out Robin van Persie's winner last Sunday, did his best to make amends with a spirited but short-lived performance.
The French playmaker smacked the ball against the post in the 20th, with Tim Krul off his line and well beaten, but then limped off after 37 minutes following a heavy challenge by Davide Santon.
Javi Garcia headed City's second two minutes later, the Spaniard climbing high to meet a corner that Santon might have cleared off the line had the Italian defender not been completely wrong-footed.
City, with no room for striker Mario Balotelli even on the bench after Mancini said the mercurial Italian needed to train more, looked in control until Ba got the hosts back into the match with a powerful header six minutes after the break.
The goal, after Newcastle defender Fabricio Coloccini hooked the ball high into the box when a corner was cleared, was the Senegal striker's 11th in the league this season.
It spurred a Newcastle revival that could easily have seen the scores levelled. Instead, a 78th minute strike from Toure calmed City's nerves with the Ivorian poking the ball through the home defence off an angled cross from Pablo Zabaleta.
"Even when we were 2-0 up we were still in danger, they put pressure on us but Yaya scored the goal to kill it off," City defender and Yaya's brother Kolo Toure told the BBC.
Defeat for Newcastle left them in danger of tipping into the relegation places, with the club two points above the drop zone with a haul of 17 points from 17 matches, and increased the pressure on manager Alan Pardew.
Newcastle have lost six of their last league seven games and Pardew was again left to rue soft goals given away by his side.
"I was happy with a lot of things that went on today, we opened them up on a number of occasions, but they're a good side," he said. (Reporting by Alan Baldwin, editing by Ken Ferris)
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