Ireland had opportunities of their own, with Troy Parrott causing problems, while Adam Idah missed a promising second-half chance.
The Republic of Ireland's Nations League promotion hopes are hanging in the balance following a 1-0 defeat to Austria.
Heimir Hallgrímsson's side produced a competitive performance but were punished in the 79th minute when substitute Sasa Kalajdzic scored following an Austrian corner.
Ireland had opportunities of their own, with Troy Parrott causing problems, while Adam Idah missed a promising second-half chance.
Chiedozie Ogbene also came close to finding an equaliser late on.
The result leaves Ireland needing a victory over Kosovo at the Aviva Stadium on Tuesday night to secure second place in their Nations League group and a promotion play-off spot.
Anything less than a win will end their hopes of promotion.

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