Embolo, 29, moved to Rennes from Monaco last summer and scored eight goals with three assists in 31 Ligue 1 appearances last season, but now looks set to leave the French club just a year later, with Ipswich Town emerging as the frontrunners for his signature.
The Switzerland international, who has a contract with Rennes until 2029, had appeared to be closing in on a switch to Atlanta United, with L'Équipe reporting that the Ligue 1 club had accepted a bid worth around €17 million from the MLS side.
Embolo, however, turned down the personal terms on offer in Atlanta, opening the door for Ipswich, who according to Get French Football News have stepped up their pursuit and are ready to meet Rennes' financial demands.
While that deal edges closer, Ipswich are also working on a separate move for Palacios, the Argentina international who has spent six years at Bayer Leverkusen since joining from River Plate in January 2020.
The 27-year-old has scored 15 goals and provided 17 assists in 185 competitive appearances for the Bundesliga club, and has 41 caps for Argentina, having been part of the squad at this summer's World Cup.
According to transfer expert Fabrizio Romano, Ipswich have submitted a formal bid for Palacios and are optimistic about getting the deal done, though Leverkusen have previously knocked back an opening offer of around €20 million as too low, with the German club said to be holding out for closer to €40 million.
Both pursuits reflect an ambitious summer of recruitment at Portman Road as the newly promoted club looks to add experience and quality across multiple positions ahead of its return to the Premier League.