Manchester City expect to beat Real Madrid to the signature of Isco due to the £30m-rated midfielder's determination to leave Malaga for a club able to offer him first-team football.
Isco, who will play for Spain against Italy in the final of the European U-21 Championship in Jerusalem tonight , has confirmed that he is considering offers from City and Real and will make a decision on future following his participation in Israel.
With Carlo Ancelotti set to be named as Real manager in succession to Jose Mourinho, however, it is understood that Brazilian midfielder Kaka, who played under Ancelotti at AC Milan, will be handed a final chance to flourish at the Bernabeu under the Italian after four years at the club.
"I know (Manuel) Pellegrini already," Isco (below) said. "I know how he works and he has been fundamental in my career during the two years I have been at Malaga with him. It's a point in favour that we worked together and that I know how he works, but it's not definitive.
"I know that both Manchester City and Real Madrid are two great clubs. I want what is best for me and for Malaga. I am going to take a holiday and then decide my future."
Zinedine Zidane has urged Tottenham's Gareth Bale to hand in a transfer request in order to speed up a move to Real Madrid.
Inter president Massimo Moratti claims Spurs are interested in a move for their Colombian midfielder Fredy Guarin, while Arsenal's Laurent Koscielny has been linked with a move to Barcelona after they gave up on Man City captain Vincent Kompany.
Arsenal are in pole position to sign Gonzalo Higuain from Real Madrid after Juventus switched their attentions to Manchester City's Carlos Tevez, but Milan are reportedly looking to offload Brazilian Robinho to Santos in order to fund a move for Tevez.
Borussia Dortmund's general manager Hans-Joachim Watzke has said Robert Lewandowski will "definitely be playing" for the club next season, despite interest from Manchester United and Bayern Munich.
FORMER Ireland international Steven Reid (32) has signed a new one-year contract at West Brom – despite hinting last week that his three-year stay at The Hawthorns was coming to an end after negotiations to hammer out a new deal had stalled.
"I never wanted to leave and I am absolutely delighted we have reached an agreement," Reid (left) said.
Meanwhile, Honduras defender Maynor Figueroa has joined Premier League newcomers Hull on a free transfer following his release by Wigan.