Diop was a bit-part player at West Ham last season and with only a year left on his contract, the club are prepared to sell him this summer.
Lyon have been interested in taking the defender back to France but he is reportedly close to agreeing to a move to Fulham ahead of the new season.
There has been talk of the two clubs being close to agreeing on a deal but it has been claimed that there is still some distance between Fulham and West Ham.
The Cottagers are yet to agree to meet West Ham’s asking price for a defender who will be available on a free transfer next year.
Fulham’s proposed move is still short of West Ham’s demands but it has been claimed that talks are still ongoing.
The Hammers want around £20m before they would agree to sanction Diop’s departure this summer.
Fulham boss Marco Silva wants Premier League-proven players ahead of their return to the top flight.
Diop is someone he likes and the Portuguese is pushing Fulham to get a deal done to sign the centre-back.
