The Italian giants have held talks with Arsenal in an attempt to agree a deal for the Switzerland international, who Jose Mourinho wants in his squad for next season.
They have yet to be able to find common ground with Arsenal though and, according to Italian daily Il Tempo, the Gunners are refusing to budge from their €20m asking price.
It is claimed that Arsenal want to bring in the full €20m in order to help finance their signings.
Mikel Arteta’s side are set to splash the cash on defender Ben White and midfielder Sambi Lokonga.
Roma are likely to need player sales to move closer to Arsenal’s asking price and could increase their offer when they offload Robin Olsen to Lille and Justin Kluivert to Nice.
Xhaka still has another two years left on his contract the Emirates Stadium.
The 28-year-old made 45 appearances for Arsenal last term as Arteta used him heavily.