West Ham have rejected Arsenal's first bid for England midfielder Declan Rice.
Gunners boss Mikel Arteta has made Rice one of his main transfer targets, with suggestions that a deal was close.
However, it is understood the initial offer for the 24-year-old has left the Hammers unimpressed as it contains a number of clauses.
Sources at West Ham do expect further communication from Arsenal, although they are also anticipating an offer from Manchester City.
City are refusing to comment on potential interest in Rice.
There is uncertainty over the futures of City captain Ilkay Gundogan and team-mate Bernardo Silva, which could force the club's manager, Pep Guardiola, into the transfer market.