Spanish newspaper AS, as quoted by The Sun, is reporting that the 25-year-old forward is not thinking about a move to Arsenal this summer despite reports suggesting the Gunners may be interested in his signature.
According to the same story, Diaz wants to stay at Real Madrid and fight for his place in the first team at the Bernabeu, after having rejoined the club from Lyon last summer.
However, despite his desire to stay at Real Madrid, the same story says that the Dominican Republic international is one of several players who have been told they can leave the Bernabeu this summer.
It is claimed that the option of signing Diaz came up for Arsenal after the Gunners enquired about the possibility of landing his Real Madrid team-mate Lucas Vazquez.
Diaz struggled to hold down a regular spot in the first team at Madrid last season, scoring three goals in 13 La Liga games, but only starting three of those matches.
Arsenal do not have Champions League football to offer new players next season after they finished in fifth place and without a trophy last term.
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