The striker is yet to sign a professional contract with Monaco, but his performances at youth level have caught the attention of the Premier League duo.
Monaco are also keen to keep their youth product after his impressive displays at the Under-19 Euros, where Alioui has scored twice already. If Alioui were to sign for Monaco it is understood he would be loaned out to Belgian side Cercle Brugge, in order to get the game time he needs to aid his development.
Arsenal are hoping to edge the race by inviting the France star to visit their training ground after the tournament concludes. City, however, believe that they have an advantage as Alioui is represented by the same agent as Kevin De Bruyne, Patrick De Koster.
What. A. Finish. 😲🇫🇷— Sky Sports Football (@SkyFootball) July 23, 2018
France are cruising against England in the U19s European Championship where they are currently 5-0 up, but how about this for a goal from Nabil Alioui! ⚽
Watch live on Sky Sports Football now or follow: https://t.co/wOr5V3jqdo pic.twitter.com/db9w6KvVPB
Arsenal have already been very active this transfer window signing Bernd Leno, Sokratis, Stephan Lichtsteiner and Lucas Torreira. The Gunners are also reportedly interested in signing Ousmane Dembele after Barcelona angered the forward by signing Brazilian winger Malcolm.
Meanwhile, City have been less active, signing only Riyad Mahrez from Leicester City for £60m. After last season's dominant display the Citizens will be hoping that Mahrez can help them retain the Premier League title.