(ANSA) - Rome, February 20 - AC Milan are cursing their luck after losing 1-0 to Atletico Madrid in the home leg of their Champions League last 16 tie, while remaining optimistic about their chances of reaching the quarter-finals.

The seven-time European champions were the better side for much of Wednesday's match and hit the woodwork twice in the first half, with a shot from inspired Brazilian playmaker Kakà and a header by Andrea Poli that Atletico goalkeeper Thibaut Courtois managed to push onto the post.

Milan failed to put away several other good chances before tiring late in the game and being punished, with Atletico's Spain striker Diego Costa heading home after poor defending from a corner.

The bad luck was compounded by injuries.

Italy striker Mario Balotelli came off in the second half holding his shoulder and full back Mattia De Sciglio was taken to hospital after hurting his left ankle in a bad first-half challenge, although coach Clarence Seedorf was hopeful the problem was "not very serious".

But for all the bad luck, Seedorf said what he saw made him hopeful of reversing the defeat in the return leg in the Spanish capital on March 11. "I think everybody saw what my players did tonight, and I am proud," said Seedorf, who won the Champions League four times as a player, including twice with Milan. "In the last 20 minutes we were tired and we were also a bit unlucky with their goal.

"We really respect Atletico, but we can do it. The fans were great tonight, I have heard my players and it seems they believe we can go through.

"It's not over, the second half (of the tie) is still to play.

"The lads have good reason to be optimistic and believe they can win in Madrid".

Despite their glorious history in European football, Milan went into the tie as underdogs, given the two teams' respective form on the domestic scene. Atletico are gunning to break the stranglehold Real Madrid and Barcelona have held on the Spanish title in recent years and they currently share the top spot with those giants in the Primera Division. Milan, on the other hand, are ninth in Serie A after making a poor start to the season that saw Massimiliano Allegri sacked last month and former midfielder Seedorf put in charge, even though he has no experience of coaching a senior club.

"We were left with a bitter taste in our mouths, because we gave a very good performance, with the right spirit," Kakà told reporters. "Unfortunately, we did not manage to score. We created a lot of chances so we are disappointed, but also confident we can still secure qualification in Madrid.

"When I hit the bar in the first half I saw the ball connect really well so I thought it was going in. "Instead it hit the bar and soon after Poli's header struck the post as well. If we had scored from one of those chances, the match would have been different". Milan are Italy's last survivor in the Champions League, but Juventus, Lazio, Fiorentina and Napoli will be in action later on Thursday in the continent's second club competition, the Europa League.