Between them, the two clubs struck the woodwork on three occasions but neither side could find the goal which would have prevented the spoils being shared in Hertfordshire.
Watford began the game brightly and came agonisingly close to taking the lead in the fourth minute when Stefano Okaka - making just his third start in the Premier League this season - headed against the woodwork from 12 yards out.
The Hornets continued to dominate the opening stages of the game and in the 20th minute, Palace somehow survived when Joel Ward diverted Troy Deeney's cross towards goal, only to see Wayne Hennessey react well to prevent an own goal.
Shortly afterwards, Jose Holebas scuffed a volley straight at Hennessey from a corner but while the Hornets still controlled the tempo of the game, Palace began to have more joy in the final third.
Deeney and Will Hughes both failed to convert long-range opportunities for Watford towards the end of the first half, but head coach Gracia would have been delighted with his side's showing in the opening 45 minutes.
Both sides cancelled each other out after the restart, but by the hour mark Palace began to dictate play and nearly went in front when Luka Milivojevic's free kick struck the post and rebounded clear.
Shortly afterwards, the visitors should have been awarded a spot kick. Adrian Mariappa brought down Wilfried Zaha inside the penalty area but the frontman was wrongly booked for diving by the referee.
The decision infuriated Zaha but the Eagles almost responded with a goal as James Tomkins powered a header against the post before Deeney cleared from inside his own six-yard box.
Watford found themselves second best but the introduction of Kiko Femenia resulted in a change in formation and it quickly paid off as the Hornets gained more possession in the final third.
With 10 minutes left, the ball was worked out wide to fellow substitute Richarlison but the Brazilian's low effort from 16 yards went too close to Hennessey.
Neither team forced a late opportunity but both clubs will take the positives after boosting their chances of securing their top-flight status for another season.
WATFORD (4-4-2) Karnezis; Mariappa, Cathcart, Kabasele, Holebas; Hughes (Gray 79'), Capoue, Doucoure, Pereyra (Richarlison 55'); Deeney, Okaka (Femenia 70')
CRYSTAL PALACE (4-4-2) Hennessey; Ward, Tomkins, Sakho, Van Aanholt; McArthur (Benteke 81'), Milivojevic, Cabaye, Loftus-Cheek; Townsend, Zaha