Liverpool goalkeeper Alisson Becker raced off his line to deny Raheem Sterling, who was set up by Jesus as the home side attacked in earnest for the first time.
But the Brazil international was powerless to prevent De Bruyne's wickedly deflected opening goal in the fifth minute after he was fed by a quick free-kick.
The Belgium midfielder skipped past Fabinho and fired in a shot which hit defender Joel Matip and went in off the far post.
A steward had to remove a blue flare from the pitch as home fans celebrated and the momentum was all with City.
But their wild celebrations were cut short just eight minutes later when Jota scored his 15th Premier League goal of the season.
Andy Robertson crossed to the far post where fellow full-back Trent Alexander-Arnold cut the ball to the Portugal forward, who made no mistake.
Suddenly the Liverpool fans in one corner of the packed ground were in full voice.
Midway through the first half, City goalkeeper Ederson almost paid for an astonishing lapse in concentration, allowing a tame back pass to dribble within centimetres of crossing the line, with Jota sliding in.
City were shading possession and had the better of the openings but Liverpool posed a constant threat down the right through Alexander-Arnold and Mohamed Salah.
De Bruyne went close to restoring City's lead when he shot just wide after a sharp turn and minutes later Joao Cancelo's powerful shot was blocked.
But the home side were back in front less than 10 minutes before half time when Cancelo picked out the deep run of Jesus, who lifted the ball over Alisson from the edge of the six-yard box.
Incredibly, Liverpool were back in the contest within seconds of the restart, before many fans had even re-taken their seats.
Salah picked out fellow forward Mane, who raced onto the ball through the middle and beat Ederson to celebrate his 30th birthday in style.
City, who had the luxury of a 14-point lead over Liverpool in January, were rattled and Jota forced Ederson to make a fine save soon afterwards.
The home side thought they had re-taken the lead in the 63rd minute but Sterling's goal was ruled out for offside by VAR.
The two managers swapped attacking substitutions -- Jurgen Klopp brought on winger Luis Diaz for Jota with 20 minutes to go and Pep Guardiola threw on Riyad Mahrez for Sterling.
Jack Grealish also entered the fray for City while Roberto Firmino was brought on for Liverpool.
Mahrez had a glorious chance to win the match in the last seconds of stoppage time but lifted his shot over the bar.