The Magpies were missing a host of star names including skipper Scott Parker, Damien Duff and Obafemi Martins, but made light of their injury worries to move to the top of Group H after two wins from as many games.
Luque, whose frustrating 12-month stay on Tyneside has been wrecked by injury and dramatic loss of form, rose in the penalty area to head home a pinpoint James Milner cross eight minutes from half-time to secure the points.
Before that decisive moment the visitors – who were also denied the services of Stephen Carr, Celestine Babayaro, Shola Ameobi, Kieron Dyer, Michael Owen and the ineligible Giuseppe Rossi – had lived dangerously after offering Palermo a host of early openings.
Twice in the opening minutes Craig Moore had to hook the ball off the line after Franco Brienza and Andrea Caracciolo had got the ball beyond 18-year-old debutant Tim Krul in the Newcastle goal.
At the other end, the lively Milner stole the ball off the ponderous Mattia Cassani in the penalty area and drew a save from Alberto Fontana despite having his shirt pulled.
After Luque struck before the interval it was all Palermo and the Italian side sent on playmaker David Di Michele and striker Marco Bresciano on the hour-mark in a bid to salvage the tie.
Giovanni Tedesco should have converted a headed chance at the back post when a free-kick flashed through the box before Krul produced a superb double reflex save in the 68th minute to preserve Newcastle's slender advantage.
The teenage keeper palmed away a powerful close-range header from Caracciolo and then blocked Cassani's follow up at the base of his post to the delight of his more experienced team-mates.
Krul also raced off his line and spread himself well to block Caracciolo's 69th minute effort as Palermo upped the tempo in the closing stages.
Three minutes from time Brienza's stabbed effort was pounced on by the keeper, but having made wholesale changes to the side that dumped West Ham out of the competition in the qualifying stages, Palmero never really did enough to deny Newcastle or Krul a dream debut.