Roberto Mancini's side extended the gap between themselves and the Gunners to 12 points after last weekend's 1-0 victory over Arsenal at the Etihad Stadium - maintaining their unbeaten record at home in 2011.
Arsenal responded with a hard-fought 2-1 victory away at Aston Villa last night, while the Citizens brushed aside a lacklustre Stoke City, winning 3-0, having dropped just seven points all season.
Arteta admits the title may be beyond Arsene Wenger's side this season, but that won't deter them from trying to win every game, and gaining maximum points over the festive period.
"I think we need to be realistic," he told Arsenal Player. "It will be really tough to [make up] 12 points on Man City from here until the end of the season because they haven't dropped many points until now.
"But you never know in football. We can only go game by game and try to put pressure on them. The main thing is to focus on the football.
"We know that if we get through this period and get all the points then we will have a really good chance to be fighting for something at the end of the season. We know how important that is for the club."
Having successfully made it through to the knockout stages of the UEFA Champions League, Arsenal were drawn against European heavyweights AC Milan in the last-16.
Whilst Arteta realises that the Gunners could have been handed an easier tie, he insists he is relishing the prospect of a tightly-contested encounter.
"I smiled when the draw was made because I think it's a really good game to play," he added. "It makes it more exciting to play a team like Milan.
"Any team at this stage of the Champions League is going to be tough, even if people think you are favourites. I like playing against teams like this and we've got a good chance, so let's play. All the boys feel the same. If we have to play them, so be it, and let's try to win.
"This is exactly why I came to Arsenal. In your career you want to have moments like this. You don't face them every day so we have to take this special opportunity."