Watson only has one year on his contract left and Palace may look cash in now rather than lose him for nothing next summer.
Another player interesting Dowie is Middlesbrough's Adam Johnson. Johnson is frustrated at a lack of action at the Riverside and may consider a move to London.
Gareth Southgate is not so happy about the speculation though linking him to both Q.P.R. and Glasgow Rangers.
"Despite what has appeared in some papers we have not had a single approach from any club about Adam Johnson," he fumed. "We have had absolutely no contact about Adam from either Rangers or QPR, nor do we expect to have any."