Finn Raikkonen, last year's championship runner-up, underlined the improving competitiveness of McLaren after their nightmare start to the season in clocking one minute 20.884 seconds, more than eight-tenths of a second quicker than last year's pole set by Renault's Fernando Alonso.
Six-time champion Schumacher had been quickest in the first session and spent the majority of the second hour of practice on top before Raikkonen toppled the German in the final 10 minutes and finished 0.125 seconds ahead of the Ferrari driver.
"The car is not too bad," said Raikkonen, who married fiancee Jennie Dahlman in the three-week break after the German Grand Prix. "I'm sure there are still improvements to make but overall for the first day it was quite good.
"I think the car has the speed in the races as long as we get everything right. If we get the set-up right we can challenge for first place."
Schumacher will score a record 12th win of the season if he is successful in Sunday's race, while victory would be enough to hand Ferrari a sixth consecutive constructors' championship.
I am happy with the work we achieved and how things are going in general," said Schumacher. "I feel quite confident for the rest of the weekend.
"Some of our competitors look quick, but as usual on a Friday it is hard to assess their performance without knowing exactly what program they were running."
Ferrari have a 99-point advantage over second place Renault.
Colombian Juan Pablo Montoya, who narrowly avoided contact with the tire barriers in a spin in the first session, was third fastest behind Raikkonen and Schumacher in the afternoon.
Briton David Coulthard completed a positive day for McLaren with the fourth best time ahead of Toyota's Olivier Panis.
Briton Jenson Button, who has endured a week of controversy following the announcement he will switch from BAR to Williams next season, was only the 10th and eighth quickest in the respective sessions.
"It is always great to get back in the car," Button said. "We have had a three-week break, which is great, but it is good to get back in the car and see where we are.
"We always work well together and we had a good atmosphere."
Last year's winner Alonso of Spain also failed to find his rhythm with 11th and 10th in the two sessions.
Jaguar's Australian Mark Webber was 11th fastest in the afternoon after failing to set a lap time in the morning, while Austrian teammate Christian Klien had a difficult day that included spinning into the gravel trap.
Brazilian Ricardo Zonta could only post the 18th best time in the afternoon on his return to Formula One with Toyota, having replaced under-performing compatriot Cristiano Da Matta.
Italian Gianmaria Bruni spun into the gravel after only six minutes of the second practice, while his Minardi teammate Zsolt Baumgartner, in his home race, had technical problems in the first session.
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