Arsenal are working on a deal to sign Real Madrid midfielder Dani Ceballos, PA understands.

The Gunners are keen to bring the 22-year-old to the Emirates on a season-long loan deal and hope to tie up a move soon.

Ceballos, who has made 56 appearances for Madrid, has also been linked with Tottenham, who are understood to have cooled their interest at the lack of scope for the move to be made permanent.

The Spain Under-21 international will be the Gunners' second signing of the summer, following the earlier arrival of Gabriel Martinelli.

Unai Emery's side continue their pre-season tour of the United States with a friendly against Ceballos' parent club on Wednesday, though it is unclear whether the deal will be done in time or if he will feature.

Emery told the Mirror: "Ceballos is a very good player. I know him from (Real) Betis at the beginning and Real Madrid.

"He played very well in the Under-21s (European Championship), his national team won the competition."