United are still favourites to sign the 20-year-old winger and are considering a bid as low as £6 million. However, Palace chief Steve Parish has slapped a £20 million price-tag but now it is believed that Palace are ready to listen to offers around £15m plus add-ons.
Arsenal entered the race to sign Zaha just days after he tweeted that he is on his way to Manchester United, but it is believed to have come from a fake account.
Palace manager Ian Holloway wants Zaha to return to the club and spearhead their chances of promotion in to the Premier League. Although United are ready to loan him back for the rest of the season, Arsene Wenger wouldn't agree to such a deal.
Meanwhile, Zaha grew up supporting the Gunners and it would be hard to turn down an offer to join Arsenal.
Wenger will move in for Zaha depending on whether Theo Walcott will sign a new contract. The 23-year-old England winger has been reportedly offered £25 million over five years but is yet to agree a new deal.
United's total offer for Palace could reach around £12 million including add-ons and performance related payments but they are reluctant to come anywhere close to Palace's £15m valuation.
Zaha made his England debut in the 4-2 loss to Sweden and has scored 5 goals in 26 appearances for the club this season.