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David Platt's men failed to show any inspiration during the first 45 minutes and only had one shot on target when Francis Jeffers shot straight at the keeper after 20 minutes.
England were made to pay for their lethargy four minutes before half-time when Lazovic struck to put Yugoslavia in front.
At the start of the second half, England continued to struggle to find any rhythm but gradually began to dominate possession with the visitors looking dangerous on the break.
England grabbed an equaliser when substitute Shaun Wright-Phillips struck from just inside the penalty area with ten minutes remaining and the game finished 1-1.
Only 10,511 people attended the game, increasing fears that The Reebok Stadium may be overlooked in the future.
England (4-4-2): Kirkland (Liverpool); Samuel (Aston Villa; Parnaby, Middlesbrough, 77), Bramble (Newcastle), Barry (Aston Villa), Konchesky (Charlton; Lescott , Wolves, 88); Pennant (Arsenal; Wright-Phillips , Man City, 61), Jenas (Newcastle), Carrick (West Ham), Prutton (Nottm Forest; Etherington , Spurs, 74); Defoe (West Ham; Ameobi , Newcastle, 61), Jeffers (Arsenal).