Manchester United will monitor Alexis Sanchez's situation this month but club chiefs still expect the Arsenal forward to sign for Manchester City, sources have told ESPN FC.
Sanchez is set to leave Arsenal after refusing to sign a new deal at the Emirates Stadium, with Gunners manager Arsene Wenger admitting on Friday that he could not rule out a January exit.
Manchester City are leading the chase for the Chile international's signature after narrowly missing out on deadline day when a proposed £60 million move collapsed at the last minute. City have rekindled their interest in the January transfer window.
Sources have told ESPN FC that the Etihad Stadium remains his preferred destination. City have been in talks with Arsenal although an agreement between the two clubs has not yet been reached. But the Premier League leaders are still keen to bring him in, particularly with Brazil striker Gabriel Jesus set to be ruled out for around six weeks.
However, with City bosses reluctant to pay Arsenal's £35m asking price for a player who will be available for nothing in the summer, sources have told ESPN FC that United have taken a watching brief on negotiations.
Sources said that Sanchez is keen to move this month and that Arsenal are prepared to let the 29-year-old leave for the right price.
United's hierarchy still expect Sanchez to sign for City, where he would link up with his former Barcelona manager, Pep Guardiola.
But there is also an acceptance that failing to prepare to take advantage should the move break down for a second time would be a mistake.
Sanchez would fill a pressing need for Jose Mourinho with doubts about Zlatan Ibrahimovic's ability to play a supporting role to first-choice striker Romelu Lukaku for the rest of the season. Ibrahimovic has scored once in seven games since returning from a knee ligament injury in November, but is currently sidelined for a month with another knee problem.
Meanwhile, United full-back Demi Mitchell has joined Scottish Premiership side Hearts on loan for the rest of the season.
The 21-year-old, converted from a winger to a left-back last season, made his senior debut in the 2-0 win over Crystal Palace in May.
He could make his Hearts debut against Hibernian in the Scottish Cup on Jan. 21.
Arnau Puigmal, 17, has signed his first professional contract with United. The midfielder, who arrived from Espanyol in the summer, has followed Angel Gomes, Aliou Traore and Aiden Barlow in penning professional terms.
ESPN FC's Manchester City correspondent Jonathan Smith contributed to this report