Pallikal, world ranked 10th and 13th seed in the tournament, lost to second seed Weleily 11-7 9-11 6-11 5-11 in 38 minutes at the South Sound squash club today.
The match witnessed short rallies, with the two going for their shots and scoring outright winners at regular intervals, with a few errors from both sides thrown in for good measure.
Pallikal's shots held sway for the early part of the match but Weleily slowly found her range, levelled in a close finish to the second game and began to take control from the outset of the third.
"We have very similar games and it's always close between us. She had me all over the court for a while so I'm pleased to be able to come through to win it like that, it was far from an easy win," said the Egyptian.
The Chennai girl had defeated Malaysian qualifier Delia Arnold 3-0 in the first round of the USD 188,000 WISPA event.