Newly promoted Fulham are also scouting a player whom Monaco still want to tempt into signing professional terms to stay in Ligue 1. However, Patrick de Koster represents Alioui, as well as De Bruyne, so City may be able to press home their advantage.
Alioui is featuring for Les Bleus at UEFA's Euro Under-19 Championship in Finland, where he's scored twice, both in a 5-0 win over England, to help France reach the last four. Italy will face Alioui and Co. on Thursday, with the result set to determine how quickly Arsenal could meet with the gifted Monaco reserve.
A rangy and versatile forward, Alioui would be one for the future should he move to either Manchester or north London. If City were to strike a deal, Alioui would find himself vying for playing time behind centre-forwards Gabriel Jesus and Sergio Aguero.
Meanwhile, prolific pair Leroy Sane and Raheem Sterling, as well as big-money summer import Riyad Mahrez, ensure the Citizens are well-stocked with match-winners in wide areas.
The Gunners are already armed with Pierre-Emerick Aubameyang, Alexandre Lacazette, Danny Welbeck and Eddie Nketiah through the middle, while Henrikh Mkhitaryan and Reiss Nelson can operate from the flanks.
While both City and Arsenal are far from lacking for fresh talent in attacking areas, neither has been shy about signing French youngsters for raw potential. The Gunners invested £7 million to acquire 19-year-old midfielder Matteo Guendouzi from FC Lorient earlier this summer.
City secured their own precocious midfielder when 18-year-old Claudio Gomes left Paris Saint-Germain and signed a professional contract on Monday, per MailOnline's Danny Gallagher.
Gomes has given manager Pep Guardiola another option in the middle, but his squad may still need more depth up front. Goalscoring wide forward Patrick Roberts remains a target for Leicester City, according to Simon Jones and Michael Searles of MailOnline, who noted how the former Celtic loanee may be "tempted by the lure of first-team football."
Landing Alioui would give Guardiola one more exciting prospect to go with Gomes and 18-year-old playmaker Phil Foden, who can help supplement City's veteran, title-winning core.