The Steelmen will head for Athens next week with a mountain to climb after goals from Lazaros Christodoupoulous and Charis Mavrias gave Jesualdo Ferreira's side a first-leg lead.
In front of a packed Fir Park, Stuart McCall's men turned in an impressive performance as they made their Champions League bow, but they were left with nothing to show for their efforts as Pana took control of the tie.
The odds will be heavily stacked against the Steelmen making the next round, but Murphy insists the dream is still alive.
He told SportTimes: "It is obviously disappointing to lose and it was hard to take, but we still have the second leg to play next week and you never know what can happen in football.
"We were on top for most of the game, to be honest. They are a good team, though.
"They were well organised and they had some really good players. They did well to get their two goals, but we have got to be disappointed to have conceded twice at home, especially when we played so well on the night.
"We will go over to Greece next week and give it everything we have and hopefully we can get the right result. We can definitely still qualify. Stranger things have happened in football.
"We will go over there and try and do the best we can. If we can get an early goal then you never know what can happen."
The result was all the more difficult to take for the Steelmen as they came close on a number of occasions to netting their first-ever Champions League goal.
Michael Higdon saw two headers saved, while Keith Lasley and Chris Humphrey also spurned decent chances.
It was to prove costly as Panathinaikos snatched a second on the counter-attack, but Murphy reckons attack was the best form of defence against the Greek giants.
He said: "The manager has tried to get many of his attacking players on the park as he could, and I am sure that is the way we will play for the rest of the season. The result was nothing to do with the formation. If we had a bit of luck on the night the result could have been different."
Panathinaikos head coach Jesualdo Ferreira said: "We experienced pressure from Motherwell, but whenever we had the opportunity to break quickly, we created problems.
"Motherwell work hard and play football that is difficult to control, but I thought we deserved the win."