Arsenal boss Arsene Wenger conceded his side's title hopes could be over after their narrow defeat at Manchester City. The Gunners were beaten 1-0 by the Premier League leaders after David Silva struck in the second half of a pulsating encounter at the Etihad Stadium. Despite a recent charge up the table with seven wins from eight, the result left the Londoners 12 points behind City after 16 games. Wenger said: ''Unfortunately it's a game we couldn't afford to lose because it puts us too much [behind City]. If we had won the game it would have put us six points behind and with our full-backs coming back, and (Jack) Wilshere and (Abou) Diaby, we would have a better squad in the second half of the season. ''It will be difficult to close the gap on City, but we will try. This is a game we couldn't afford to lose and that's why it's difficult to take. We will continue to fight and there are a lot of positives. The team has made a lot of progress since August and the team can be proud of it.'' Despite City's chances, Robin van Persie had a strike ruled out for offside and Arsenal were also denied a penalty when the ball struck Micah Richards' arm. Wenger said: ''It was a game where it could have gone both ways. I felt we were a bit unlucky and their keeper had a good game. I did feel at half-time we could win the game if we stayed stable at the back, but we lacked a bit of accuracy in our final ball. ''In the final third as well we had a few opportunities where we didn't pass the ball well.'' Wenger added that Johan Djourou, who left the game early in the second half with a groin injury, could be out for three weeks.