Jamie Vardy is yet to make up his mind about a summer move to Arsenal, and could still go to the Emirates, Sky sources understand.
Arsenal boss Arsene Wenger told Chinese television that he believes Vardy is staying at Leicester.
Wenger said: "Jamie Vardy is, at the moment, at Leicester and from what I know, he will stay at Leicester."
Arsenal told Leicester three weeks ago they are prepared to meet the £20m buy-out clause in Vardy's contract, and Leicester responded by offering the striker improved terms.
Sky Sports News HQ understands that Vardy wants to focus entirely on England while they are in Euro 2016, and will delay making a decision about his domestic future until he returns home.
On Saturday, speaking at England's 2016 training base at Chantilly, Vardy insisted he was not thinking about his club future.
"I'm just here completely focusing on England and that's all I want to do at the moment," said the 29-year-old.
"We're here to represent England and that's all I want to think about."