Spain rattled the woodwork three times but suffered a shock 1-0 defeat at the hands of Honduras at St James Park and crashed out of the Olympics.
Jerry Bengtson's seventh-minute header, the Honduran striker's third goal in two games, ensured that the Spaniards, whose senior team are reigning World and European champions, will go home early following an opening defeat by Group D leaders Japan.
In an ill-tempered encounter, Iker Muniain hit the post and substitute Rodrigo the bar amid a second-half Spanish onslaught, but the Central American side battled heroically to keep Luis Milla's star-studded side at bay.
Two second-half goals from substitutes Scott Sinclair and Daniel Sturridge proved crucial as Great Britain beat United Arab Emirates 3-1 to move within a point of qualifying for the last eight at London 2012.
With the Group A match slowly meandering towards a draw, Sinclair and Sturridge grabbed the vital goals, leaving Stuart Pearce's side only needing a draw in their final clash against Uruguay to advance to the last eight.
Captain Ryan Giggs had opened the scoring for the host nation with a glancing header early on before Rashed Eisa silenced the home crowd at Wembley with a 60th minute leveller.
Brazil came from behind to beat Belarus 3-1 at Old Trafford thanks to a stunning second half free-kick and last-minute assist from Neymar.
The favourites for the gold medal had gone behind inside nine minutes when Renan Bressan popped up to put Belarus into a shock lead. But Pato levelled the scores six minutes later when he headed home.
Brazil continued to press and were rewarded in the 65th minute when Santos star Neymar showed why he is so highly rated and curled a free-kick into the top corner to put his side ahead.
The winger wasn't done though and finished off Belarus with a wonderful backheeled assist in the final minute, which new Chelsea signing Oscar sent into the net with ease.
Ten-man Senegal blew Group A wide open with a shock 2-0 win over highly-fancied Uruguay at Wembley.
Impressive teenager Moussa Konate scored twice, either side of Abdoulaye Ba's first-half dismissal. And in a match littered with fouls - and five more yellow cards - Senegal kept the World Cup semi-finalists at arms' length, with Luis Suarez coming closest when he headed into the side netting.
Outsiders to qualify before the competition started, Senegal know a victory against United Arab Emirates in Coventry on Wednesday will send them through, leaving Great Britain and Uruguay to scrap it out for the additional quarter-final berth.
Egypt's hopes of qualifying for the last eight of the Olympic football tournament took a blow as they drew 1-1 with New Zealand at Old Trafford after wasting several chances.
Egypt fell behind to a 16th minute strike from West Brom's Chris Wood, but Mohamed Salah equalised from close-range at the end of the first half.
The Africans could have had at least seven goals by the final whistle but a mixture of last-ditch Kiwi defending, and some awful finishing from Egypt, meant they had to settle for a draw in what was a poor-quality contest.
Egypt will have to beat Belarus on Wednesday to qualify for the quarter-finals, while minnows New Zealand will have to beat the South American side to progress from Group C.
Giovani dos Santos' two-goal cameo from off the bench gave Mexico a 2-0 win over Gabon and sent El Tri top of Group B on Sunday.
Giovani, who struggled to earn a place under Harry Redknapp at Tottenham, was introduced as a second-half substitute and broke the deadlock after 63 minutes.
He then scored from the penalty spot in injury-time after Gabon defender Henri Ndong was sent off for a professional foul.
Kim Bo-Kyung was South Korea's hero with a second-half winner as they beat Switzerland 2-1 in their Group B encounter at the City of Coventry Stadium.
Kim, who recently moved from Cerezo Osaka to Championship club Cardiff, volleyed home a deflected cross to move Korea level on four points with group leaders Mexico.
Arsenal's Park Chu-young had opened the scoring for Korea but Switzerland replied instantly through Innocent Emeghara only for Kim to settle the issue.
Striker Kensuke Nagai fired Japan to the brink of the quarter-finals with a late winner against Morocco. The Grampus Eight frontman struck with an instinctive lob six minutes from time to settle a tight Group D encounter with a 1-0 victory.