River Plate midfielder Exequiel Palacios has also emerged a major target as a potential replacement for Aaron Ramsey.
The Argentine was set to join Real Madrid last summer in a £20m deal, but the move collapsed when he picked up an injury.
And now Zinedine Zidane is not following up interest on him, although the 20-year-old is one of South America’s most highly rated young players and was included in Argentina’s final 23-man squad this summer’s Copa America in Brazil.
Palacios is expected to leave River Plate for Europe this summer after almost four years in the first team, having made his debut as a 16-year-old.
And a report from Argentine radio station Radio Continental says Arsenal are on their feet to sign the midfielder,
The 20-year-old is a perfect fit of player Arsenal boss Unai Emery needs as he looks to replace Aaron Ramsey, who will join Juventus on a free transfer this summer.
He a release clause of around $23m (£18million) and would be well within Arsenal’s transfer budget even if they do not qualify for the Champions League.