Roberto Mancini accepts that his Manchester City team are scrapping with Manchester United for second place in the Barclays Premier League.
Ahead of the derby at Eastlands , the Italian boss has reiterated that Chelsea will retain the title.
Mancini sees no reason to change that view even though the current holders go into their home match with Fulham on the back of a defeat by Liverpool.
Successive victories for City - they overcame West Brom on Sunday - would see them on the same points tally as United.
Mancini said: "I think Chelsea will win the Premier League as they are better than the other teams.
"But all the other sides that are near them can try because the season is long and difficult. We must play a lot of games.
"Our target must be the Champions League. It is important we are near Chelsea and Manchester United in January and February.
"I think we can have a chance. We must take it game to game. For the moment we must only think of United."
City ended a run of three straight defeats at the weekend and according to Mancini that win has increased the mood of confidence in the camp.
United held the upper hand last season with back-to-back victories in the league thanks to late goals from Michael Owen in the first game and then Paul Scholes in the second.
City were left cursing their luck in the Carling Cup semi-final as well after a 2-1 first leg victory.
United, however, secured their passage to Wembley thanks to a stoppage time winner from Wayne Rooney in the return.
Mancini hopes City have learned a lesson from those three heartbreaking results, especially as United beat Wolves at the weekend with almost the last kick of the game.
He said: "A victory before you play United is important for the players and for all of us. They know now we are a strong team. The situation has changed.
"We have respect for them, we have respect for Fergie (Sir Alex Ferguson) because he is the top manager in the world. But we are getting better. It will be a good game.
"In the last three of four derbies City have played at the same level as United but have lost late in the game. This season we are a different team.
"They are a strong team who are ready to play until the last second. They won against Wolves like that. They have a strong mentality because they have won a lot of trophies."
Mancini could be short of attacking options as Mario Balotelli is suspended after being sent off at The Hawthorns following a brace while Emmanuel Adebayor has a calf problem.
It could mean a return for Jo alongside influential captain Carlos Tevez, who returned to the team at the weekend.
Sir Alex Ferguson is crossing his fingers that the virus that has swept the Manchester United camp since their return from Turkey last week does not wreck their bid for a derby-day win.
After losing several key players for the weekend win over Wolves, Ferguson had to send more home from training on Monday and admits he has no idea what the make up of his side to face Roberto Mancini's men at Eastlands will be.
In addition, Ryan Giggs and Owen Hargreaves (both hamstring) are definitely out, while Nani (groin) is rated extremely doubtful to recover from the injury he suffered in Turkey last week.
Ferguson may still regard United's meetings with Liverpool as a derby of "honour" but even he accepts the intensity surrounding duels with City has exploded in recent years.
The Red Devils head across town to Eastlands eager to collect three points in their quest to overhaul Chelsea at the Premier League summit but knowing local bragging rights are now of equal significance.
It means Ferguson's old adage of Liverpool being United's true derby-day opposition no longer applies.
"The Liverpool game is one of honour in terms of trophies won," outlined Ferguson. "Liverpool edge it in European Cups, we edge it in FA Cups and World Championships.
"Now the meetings with City are ones of great intensity, which is built up by the media explosion around what they are doing and what they are trying to achieve.
"The fact we are both in the same city means there is an incredible intensity in this derby game now, which was not there 10 or 15 years ago."
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