The Gunners remain sixth in the table following this weekend's results and are trailing fourth-placed City by seven points, although they have a game in hand.
Wenger's side have 10 games left to secure Champions League qualification and have floundered after four losses out of five Premier League games.
And the Frenchman fears there may be too much work to do, even though he stated he was heartened by his side rallying to fight back from twice surrendering the lead to City.
"It will be tough [to reach the top four]," Wenger told Sky Sports. "Everybody is in there. I think Pep Guardiola has said to be in the top four is a trophy because in England it is so difficult. We will fight for it.
"The first thing for us was to stop [losing], the second is to build up our confidence again and the third step will be to win on Wednesday night [against West Ham]."
"We started very nervously. We played without discipline, being put under pressure. We conceded early as well," he added. "But we showed strong mental resources. You could see the team was ready for a fight.
"On the technical front we can do better. You could see they scored the 2-1 just before the break. For us the test was mental, not so much tactical. Not to feel sorry for ourselves, stay compact and be ready for a fight.
"Mathematically it is not good for them or us. But we have come out of such a stressful period. When you come out of a few disappointing results, the first priority is not to lose. We could not afford to lose, no.
"We went forward and exposed ourselves to counter-attack. They are very good in transition. On the whole, it was a very good defensive performance. The first goal was a surprise and for the second goal we lacked a bit of focus.
"We went for it. [Alex] Iwobi had a good chance in the box. The best chance came to Mesut Ozil. He has not played for months. Everybody was cautious in the last few moments. But we wanted to win the game and finished with plenty of offensive players on the pitch."