The Slovenia international has impressed in the first half of the 2011/12 campaign, and Corriere dello Sport have linked him with a move in the January transfer window.
Inter Milan are reportedly keen to add some fresh blood to their ageing midfield, and sporting director Marco Branca is said to see Ilicic, 23, as the perfect addition.
Ilicic joined Palermo from Maribor in the summer of 2010 and has since developed into a key player at the Sicilian club.
His contract with Palermo runs until the end of the 2015/16 campaign and an offer in the region of 15 million euros could be needed to lure him away from the club.
He has previously been linked with clubs such as Juventus and English Premier League duo Chelsea and Tottenham.
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