Palace were said to be keen on landing the West Ham ace.
Football London claimed earlier this week that West Ham had rejected an £11million bid for the 28-year-old, with the east Londoners looking to receive a figure closer to the £15million mark.
However, talks have seemingly continued but Palace have now reduced their interest in the Senegal international, due to the former Anderlecht star's demands over his proposed wage at Palace.
The Hammers have signed Jack Wilshere in the middle of the park and new manager Manuel Pellegrini is expected to sign more players before August 9's deadline.
That is likely to push Kouyate down the pecking order and could make him surplus to requirements, but he remains at West Ham though Portuguese giants FC Porto are also said to be interested in his signature.
Kouyate signed a five-year deal with the Hammers in the summer of 2016, worth £30,000 a week (Daily Star), and he could now remain at the London Stadium unless he reduces his demands.
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