Craig Levein hailed Scotland as "heroes" after their spirited comeback against Spain fell just short in their Euro 2012 qualifier at Hampden.
It looked ominous for the Scots when David Villa put the visitors ahead from the spot just before the break and Andres Iniesta doubled their lead 10 minutes after the restart.
However, a Steven Naismith header gave the home side a lifeline before Spain's Gerard Pique put through his own goal trying to cut out a James Morrison cross.
The Tartan Army roared their team on in hope of a famous victory but were deflated when Spain substitute Fernando Llorente, on minutes earlier for David Silva, restored the visitors' lead with a header to take the points.
To compound the pain, in the dying moments Steven Whittaker, booked for his handball for Spain's penalty, was shown a second yellow after a tackle on Sergio Ramos.
Scotland have four points from four games and face a double-header against the Czech Republic and Lithuania next September but Levein was keen to praise his players for their efforts against the World Cup winners.
"I felt the players did everything that I asked from them and I think every single one of them is a hero tonight for their efforts," he said.
"They tried to follow every instruction to the letter
"In my eyes they could not have done any more and the supporters appreciated that.
"The players showed real character. It would have been the easiest thing in the world to put their heads down at 2-0 against the best team that has possibly ever played here but they didn't.
"They showed guts and determination."
The Scotland boss also praised the Tartan Army for the backing they gave his players.
"The supporters invested a lot tonight and they got their rewards," he said.
"The chemistry between the players and supporters was as good as I've seen here in a long, long time and the place was rocking.
"This, for me, was why I took the job. It was something to savour and I can't wait for the next time
"I wish I could have gone round and shaken the hand of every supporter for the way they performed tonight.
"I'm trying to be as upbeat as possible but I really feel sick that we didn't take anything from the game."
Levein refused to talk about the defeat against the Czech Republic on Friday where he deployed the controversial 4-6-0 formation saying: "I am not here to talk about the past" but he had sympathy for Whittaker.
"I felt it was unfortunate. I think his second yellow could have been a yellow the other way.
"At the penalty he was protecting his face, I thought it was very soft.
"Maybe one day when we are world champions, we will get those things."
Scotland are third in Group I but Levein remains confident of achieving second place and a play-off spot.
He said: "In my eyes, we always had to beat the Czech Republic and Lithuania at home and Liechtenstein away - nothing has changed."
Vincent del Bosque denied his side had taken their foot off the gas after going 2-0 up shortly after the break.
The Spain boss insists the Scots still have a chance of qualification but claimed the Czech Republic, who beat Liechtenstein in the other group game, would be the main rivals.
He said: "It was more down to the character and fighting spirit of Scotland, they fought to the end of the game but we managed to convert our chances.
"We can be satisfied with our performance, we varied our play and made chances.
"There was no point that we thought we would lose but I knew we were in a very tough game.
"There is no reason to think it is all over for Scotland but our closest rivals at the moment are the Czech Republic.
"We can relax a little now and put the competition to sleep until March, but the Czech Republic are our main rivals after they prevailed against Liechtenstein."
