John Stones had put the champions ahead inside the opening five minutes with a long-range shot for his first league goal of the season.
Haaland was unable to beat the record as he was substituted at half-time by Pep Guardiola ahead of a UEFA Champions League quarter-final, second-leg trip to Bayern Munich on Wednesday.
After further changes by the Man City boss, the pace of the match eased and Leicester pulled a goal back through Kelechi Iheanacho against his former club and gave their opponents further scares.
A sixth league win in a row gives Man City 70 points, while defeat for Dean Smith’s team in his first match in charge at Leicester leaves the Foxes 19th, with 25 points, two from safety.
Watkins hot streak goes on
Jacob Ramsey gave the hosts a deserved lead after 11 minutes, blasting home from Watkins’ clever knockdown for his fourth goal of the season.
Watkins added a second midway through the second half shortly after he had a goal overturned by VAR for offside, before adding a third late on.
His 11 league goals in 2023 are the joint-most of any player in the division, level with Haaland.
It was a fifth straight win for Villa for the first time in 25 years while Unai Emery is only the third manager, after Mike Walker at Norwich City and Carlo Ancelotti at Chelsea, to see his side score in each of his first 18 matches in charge.
Villa climb to sixth on 50 points, six behind Newcastle, who suffered only their fourth defeat of the season and remain third.
Cherries stun Spurs
AFC Bournemouth fought back through Matias Vina’s first goal for the club on his first start.
Dominic Solanke put the Cherries ahead after half-time, showing excellent composure to finish.
Spurs thought they had claimed at least a point when substitute Arnaut Danjuma scored his first goal for the club in the 88th minute to make it 2-2.
But AFC Bournemouth broke away in the fifth minute of added time and Ouattara coolly slotted in a goal that lifts his side to 14th with 33 points, six from the bottom three.
Spurs remain fifth on 53 points, three behind Manchester United, who have played two matches fewer.
Brighton claim first win at Chelsea
Brighton & Hove Albion enhanced their own European hopes with an impressive 2-1 victory over Chelsea, their first win at Stamford Bridge.
The visitors flew out of the blocks and could have been 3-0 up in the first 10 minutes but fell behind after Conor Gallagher’s deflected shot wrongfooted Robert Sanchez for Chelsea’s first goal in five matches in all competitions.
Brighton got a deserved equaliser when Danny Welbeck, less than three minutes after coming on for the injured Evan Ferguson, rose highest to head in his fourth goal of the season from Pascal Gross’s cross.
The winner came from 19-year-old Julio Enciso, who produced a stunning strike from 30 yards that flew into the top corner.
Brighton are seventh on 49 points, one behind Villa. Six matches without a win in all competitions leaves Chelsea 11th with 39 points.
Palace extend Hodgson revival
Eze put Palace ahead in the 54th minute, scoring for a second successive match, before adding a superb second from range after a neat turn.
Palace have 36 points in 12th, nine off the bottom three. A third straight defeat keeps Southampton bottom with 23 points.
Fulham back to winning ways
Dwight McNeil brought Everton level before half-time with a low shot from range after a smart turn.
Fulham are 10th with 42 points, while Everton remain 17th on 27 points, out of the relegation zone on goal difference only.
Diego Costa breaks duck
The forward opened his account for Wolves when Christian Norgaard’s clearance rebounded off him to go in.
Wolves remain 13th with 34 points. Back-to-back defeats leave Brentford in ninth, with 43 points.
Double header on Sunday
The leaders will hope to reclaim their six-point gap over City with a fourth consecutive victory against the Hammers.
Man Utd will look to profit from the defeats of boost and Spurs and burnish their top-four credentials at the City Ground, where they won 8-1 last time out in the Premier League, 24 years ago.