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According to Karim Benzema's agent Karim Djaziri, the Real Madrid striker will not be coming to Arsenal after all. In fact, Djaziri says that not only has no contact been established (presumably he means with him, as I'm not sure whether he'd have intimate knowledge of all club dealings, even regarding his client), but he's working with Madrid on a contract extension.
There had been a lot of noise in the British media last week, including the BBC, over proposed Arsenal purchases of Benzema and Angel di Maria from Real Madrid. Djaziri mentioned a lack of worry about the imminent arrival of Gareth Bale, because both Bale and Cristiano Ronaldo play on the wings and Benzema plays centrally. But as Sid Lowe reported yesterday, there's a possibility that Madrid will go for Luis Suarez, which would put Benzema in a different position. That's all a long way from being done, though.
As it stands right now, Karim Benzema would likely be Madrid's starter at striker, and yeah, that might not be a situation he wants to leave, necessarily. It's possible that this is simply agent speak, either to make the case to Real Madrid that Benzema shouldn't have to leave, or to make the case to Arsenal that wages will have to be pretty good to attract him. Or things may change between now and the end of the window - if you'll recall, Gonzalo Higuain's agent was pretty talkative as well, and nothing came of that. Whether or not he's spouting hot air (and for the moment, I'll presume he's not), any deal for Benzema appears it still has some work left to do.