Chelsea have informed Arsenal that they want a decision by the end of the week on whether they plan to sign midfielder Yossi Benayoun on a permanent basis, reports the Metro.
Benayoun joined Arsene Wenger's side on a season-long loan last summer and scored six times in 25 appearances, including goals in the last two league matches to help the Gunners finish third.
However, Wenger is still undecided on whether to keep the 32-year-old, who had rejected a return to Liverpool by preferring the loan move to the Emirates in August.
Benayoun was expected to return to Stamford Bridge ahead of the new campaign to hold talks regarding his future but according to the report, the Israel captain has already been told by the Blues that he can leave.
The midfielder had apparently told Arsenal that he would be happy to stay on but he holds out for a two-year-contract, which is something Wenger is unlikely to sanction, given his age.
Chelsea are expected to accept offers in the region of £1 million for the player, with Ajax and his former clubs West Ham and Maccabi Haifa suggested as potential destinations.
Meanwhile, Manchester City remain favourites to sign Arsenal captain Robin Van Persie in the summer, according to the Mirror.
The report says that since Italian champions Juventus have dropped out of the race for the Dutchman's signature and La Liga giants Barcelona and Real Madrid are yet to come in for him, City are now in pole position to snap up the 28-year-old.
Van Persie has only one year left on his current Arsenal contract and had met with Gunners' Chief Executive Ivan Gazidis and Wenger last week to discuss his future but nothing seems to have come of it.
As a result, the north London club, who are understandably desperate to hold on to their talismanic striker, have slapped a media ban on him, after reaching an agreement with the Dutch Football Association, so that the player will not to talk to the press during Euro 2012 in order to avoid questions about his future.
Van Persie, who joined Arsenal from Feyenoord in 2004, was this season's PFA Player of the Year and also the Premier League's Golden Boot winner, with 30 goals and nine assists from 38 appearances.