Battle of Palermo: they lost (11)

I believe the answer is:

thermopylae

'battle' is the definition.
(Thermopylae is an example)

'palermo they lost' is the wordplay.
'lost' indicates anagramming the letters.
'palermo'+'they'='palermothey'
'palermothey' anagrammed gives 'THERMOPYLAE'.

'of' is the link.

(Another definition for thermopylae that I've seen is " Ancient Greek battle".)

I've seen this clue in The Guardian.

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