Arsenal manager Arsene Wenger has suggested that he is hopeful of Mesut Ozil penning a new contract at the Emirates Stadium.

Ozil has less than a year remaining on his current terms, and the German international has been linked with a transfer to the likes of Manchester United, Inter Milan and Fenerbahce.

However, a report indicated that negotiations over a fresh deal for Ozil were progressing in the right direction, and Wenger has hinted that one of the club's key men may extend his stay in North London.

The Frenchman told reporters: "It is my understanding [that he wants to stay]. I hope the situation can be turned around.

"At the moment, we are not close enough to announce anything."

Ozil could return from injury in order to feature in Arsenal's Premier League fixture with Watford on Saturday evening.