Pallister, a three-time winner of the competition under Sir Alex Ferguson during the 1990s, spent more than nine years at Old Trafford - a time when they were the dominant force in the city.
That has changed in the past 10 years, with City winning their fourth-straight domestic title last weekend, whilst United limped to an eighth-placed finish - their lowest in the Premier League era.
But, the FA Cup provides a different challenge for both sides and Pallister believes Manchester United need to play for the supporters on Saturday.
Speaking about the rematch of last year’s final, he told Flashscore: "Taking the fact that it's a derby out of it, this team has been all-conquering. They've just put the Premier League to bed and they are full of confidence.
"It's a very difficult game for anybody in world football right now, never mind a Manchester United team that's struggled quite a lot this season. They've got to turn up, they've got to fight. If they go behind, they can't get down on themselves.
"They've got to turn up for the fans that are going to be there on the day, for the manager and for themselves. It’s down to them, but it’s a tough ask."
A result in the cup final against their city rivals will provide some blessed relief for manager Erik ten Hag, who has been under severe pressure given a poor league performance that included a negative goal difference.
Those problems at the back, Pallister explains, have been one of the hallmarks of the season, and the inclusion of Lisandro Martinez in the final squad could be pivotal.
He said: "Martinez is back, which is a huge shot in the arm for them. But is he going to be really up to match speed? Only time will tell.
"There's a lot of negativity going into this game, I think, from United fans. But I think if you can take any kind of hope, it's from a game like the Liverpool one, which was in the quarter-final where everybody expected us to get rolled over.
"We came out fighting and managed to get the result, so it's probably much of the same with that attitude.
"I think you have to stop the attacking intent of Manchester City, so I think if Martinez was fully fit, I'd be delighted.
"I can't see him being fully fit because he's only played 110 minutes of football since his injury. He is one of the players that we really have missed. Defensively, we've got to be on it."
Regardless of the result on Sunday, speculation around the future of Ten Hag will be rife come the summer months. Mauricio Pochettino - who left Chelsea via mutual consent earlier this week - is one who has been linked with the post at Old Trafford many times.
Now a free agent, he could be someone the leadership group could be looking at to change the club’s fortunes after a tumultuous season.
But Pallister believes the biggest changes should be on the pitch with reinforcements across the board.
The former England centre-back explained: "I have got an absolute hell of a lot of sympathy for the guy (Ten Hag) with the amount of injuries he's had.
"We were pretty solid last year (2022/23 season), getting ourselves into a Champions League slot, but we've had all kinds of issues this year with our back four.
"I think we've only ever played the same back four twice in my current games so that just goes to show how much of a struggle it's been.
"Once you lose that kind of solidity, I think it can eat through teams at times. I'm sure the midfield players are thinking, ‘but it doesn't matter if we score, we're going to concede anyway’, so that's the way it eats into the psyche.
"We haven't got the depth in the squad, we need to add a bit more quality to that.
"There's been changes in the background, with guys who have come in to help with the recruitment, so we'll see in the summer.
"We have to be honest and say we've made some bad buys for a lot of money and that's eating away at the club and the fans.
"Hopefully they're starting to get things right now and with Jim Ratcliffe and Dave Brailsford coming on board we can start looking at bringing in some real quality into the club."
The first transfer window under the new footballing regime of Ratcliffe is right around the corner for United, what they do to fix their leaky defence remains to be seen.
But what is clear is that a trophy this weekend - beating the holders along the way - will give the club the lift they so desire and pave the way into Europe next season.
It is a tantalising prospect for a club desperate for some success.
Gary Pallister was speaking to Flashscore on behalf of BetVictor.
