• Watford and West Brom also interested in defender, who is keen to leave • Arsène Wenger says Premier League title race is at ‘moment of truth’

Crystal Palace’s search for recruits has been frustrated after failing to agree personal terms with the Arsenal full-back Carl Jenkinson following lengthy talks with the player and his representative.

Jenkinson, who has a solitary cap for England gained in 2012, has made only five appearances this season – one in the Premier League – having fallen behind Héctor Bellerín and Gabriel Paulista, and had been keen to revive his career away from the Emirates Stadium. A fee of around £7m was agreed this week, with Arsène Wenger confirming on Thursday the move was “basically down to him to find an agreement” with Palace.

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Talks have yet to yield a compromise on the 24-year-old’s wage demands. The right-back, who played on loan under Sam Allardyce at West Ham, earns around £40,000 a week and is contracted to the summer of 2018. Palace are understood to have been willing to match that salary but the player is seeking an improvement on terms to swap Arsenal for a relegation scrap at Selhurst Park.

Talks have ceased, with Palace exploring other options, albeit potentially with the scope to revisit the situation with Arsenal next week should they fail to make inroads elsewhere. Jenkinson remains intent on leaving Arsenal and will hope interest firms up from his other suitors, among them Watford and West Bromwich Albion.

Wenger has said he believes the Premier League season has reached its “moment of truth”. Arsenal host 10th-placed Burnley on Sunday eight points behind the leaders, Chelsea, whom they face on 4 February. Wenger feels if that match at Stamford Bridge is to have any significance in the title race his team cannot slip up before then.

“With all the important games we have everyone is focused,” the manager said. “It’s the moment of truth now, January to May, there are five months to go. That’s why I say that every game is important and that we’re just focused on the next one. Big games are only important if you do well in games where there is so-called less interest.

Facebook Twitter Pinterest Arsène Wenger, pictured here with Alexis Sánchez, has spoken out against the proposed scrapping of the offside law. Photograph: Stuart MacFarlane/Arsenal FC via Getty Images

“Burnley are a top-10 team in the first part of the league so what they have done is absolutely unbelievable. They play everybody at home and they beat everybody, so now we need to make sure they don’t find a solution away from home on Sunday. It’s a big game for us – we have to prepare well.”

Wenger revealed the club captain, Per Mertesacker, has had his contract extended by a year and the German had returned to training.

“There is an option with Mertesacker that we have taken,” he said. “There was no negotiation. He is back in training, not with the squad yet but he is two weeks away now. Héctor Bellerín, Francis Coquelin and Kieran Gibbs are back in the group, and should be available for selection for Sunday. It is still too early for Theo Walcott but Olivier Giroud is back in training since yesterday. With all the important games we have of course it’s important we have all the experienced players back.”

Wenger also offered an impassioned defence of an unloved part of football, the offside law. Following remarks by the Fifa technical director, Marco van Basten, that the law could be scrapped, Wenger said: “I don’t find the idea of suppressing offside interesting. I think offside is a law that makes teams work together, which is an important quality in team sport. It’s an intelligent rule too where you can use your intelligence as a player. It’s very important to keep that in the game.

“People say the game is currently too tight or too compact but the evolution of the game has always been like that,” he added. “Defence gives a problem, offence provide a solution and defence again creates a new problem for the attack. It’s very important that we always face new difficulties in the game.”