Ozil and fellow star Alexis Sanchez could both leave the club on free transfers next summer when their current deals expire, with negotiations having been shelved this spring amid the uncertainty surrounding Arsene Wenger's future.
"Talks are going well", Wenger said during his pre-match press conference on Thursday ahead of Saturday's Premier League clash against Watford.
'I always said the fact that we didn't find an agreement past year doesn't mean the player will necessarily leave.
He added: "Both players look happy and overall I hope the situation can be turned around, but at the moment we are not close enough to announce anything".
The Gunners pulled the plug on an agreement to sell Sanchez to Manchester City on deadline day after being unable to secure the signing of Monaco's Thomas Lemar.
Meanwhile, Wenger said he would be speaking to Sanchez to assess his mental state after the striker and his Chile side missed out on a place at next year's World Cup finals.
Chile forward Sanchez, 28, joined Arsenal from Barcelona in July 2014, a year after 28-year-old Germany playmaker Ozil's arrival from Real Madrid. I will always appreciate him.
"Sanchez is a lion who wants to play football and I do not expect him to sulk".
"I didn't want to speak to him much [at full time] because I know how tough it is and also because I didn't want for people to interpret things in a way that would have put my professionalism in doubt".
"When you don't have the World Cup, you focus on your club".
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