The Gunners face the Blues at the Emirates Stadium on Sunday and the Frenchman is also adamant his side can return to winning ways after last weekend’s 2-1 loss at QPR
Roberto Mancini’s men are in desperate need to keep pace with Manchester United and could be eight points behind their rivals come kick-off against the Gunners.
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However, Wenger does not believe that coming home empty-handed would prove fatal for City's title prospects and admitted that he was disappointed that his own side were not involved in the championship hunt.
The Frenchman told reporters: “It will not be over, but it will make things very, very difficult.
“City will [fight until the last], certainly, but I believe we should wait and see what happens over the weekend.
“Unfortunately we are not involved in the title race and we will let them sort it out between themselves, but at the moment Manchester United have the advantage.”
Wenger’s charges will prove a stern test, though, as they come into the clash on the back of picking up 21 points from a possible 24 and face their own fight against rivals Tottenham for third place in the Premier League.
And the Gunners chief hopes that his team can bounce back from last weekend’s 2-1 loss at QPR.
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He added: “Our job is always to cope with the consequences of the game, but before you just focus on what you want to do well.
“The momentum is still there because in the last eight games we have won seven, so it was an interruption and a disappointment.
“We want to come back to what was our recent level. That means playing well and therefore winning the game.”