Now Peter sat without in the palace - Mark says the first denial took place while Peter was “beneath in the palace.” This “palace” was the large hall or court belonging to the residence of the high priest. The part of it where Jesus and the council were was “elevated,” probably above the rest for a tribunal. Peter was “beneath or in the “lower part” of the hall, with the servants at the fire. Yet, as Matthew says, he sat without in the palace - that is, out of the palace where they were trying Jesus - to wit, in the lower part of the hall with the servants: both narratives are therefore consistent.
And a damsel came unto him - John John 18:17 says that this damsel was one that kept the door.
Thou also wast with Jesus of Galilee - Probably she suspected him from his being in company with John. This was in the early part of the trial of Jesus.