The 23-year-old is comfortable in the number 10 position and would be an alternative option to Martin Odegaard for the Gunners, who have apparently seen their captain suffer a serious injury setback.
Meanwhile, Man City are facing continued uncertainty over the future of chief playmaker Kevin De Bruyne, who is yet to extend his contract beyond the summer of 2025 and turns 34 next year.
De Bruyne is expected to be the subject of lucrative offers from Saudi Pro League teams next summer, and according to CaughtOffside, Pep Guardiola is making contingency plans in case of his departure.
The report claims that the Premier League champions are one of a handful of clubs running the rule over De Ketelaere, who joined Atalanta for £18.3m this summer after two difficult years at AC Milan.
Arsenal, Man City in five-club battle for De Ketelaere?
De Ketelaere burst onto the scene with Club Brugge in his homeland before making the switch to AC Milan in the summer of 2022, but in 40 appearances for the Rossoneri, he only managed one assist and no goals.
The 23-year-old was loaned to Atalanta for the 2023-24 season and rediscovered his golden touch under Gian Piero Gasperini, scoring 14 goals and providing 11 assists in 50 appearances as La Dea won the Europa League.
De Ketelaere has not quite set the world alight in the same manner this season, only managing one goal and one assist in 10 appearances so far, but his exploits last term apparently made several Premier League teams stand up and take notice.
Gunners boss Mikel Arteta is apparently a 'big admirer' of De Ketelaere's qualities, but all of Man City, Newcastle United, Tottenham Hotspur and West Ham United are also in the mix.
Even though West Ham cannot offer such an ambitious sporting project as the other four clubs, the Hammers are believed to be ones to watch given that the long-term futures of Lucas Paqueta and Mohammed Kudus are not set in stone.
Why Arsenal may find it difficult to sign De Ketelaere
Furthermore, Atalanta have De Ketelaere under contract until the summer of 2027, and other midfield departures could make it difficult for any of the Premier League sides to pull off a summer deal.
The Europa League holders lost Teun Koopmeiners to Juventus during the most recent transfer window, and Brazil's Ederson has also been heavily linked with a departure amid interest from Barcelona.
Should Ederson also be prised away from the Gewiss Stadium in 2025, Atalanta are expected to make a concerted effort to keep De Ketelaere, who started both of Belgium's Nations League games against Italy and France this month.
Arsenal are not believed to be putting all of their eggs in the Belgian's basket, though, as they are also rumoured to be tracking Shakhtar Donetsk and Ukraine playmaker Georgiy Sudakov.