The fortunes between these two clubs have changed dramatically in recent weeks. The Gunners started the game looking for their first win in six, whereas, Liverpool, in fourth place, were looking to close the gap.
Liverpool were the first to go close after just three minutes when Steven Gerrard delivered a dangerous free-kick into the box that the Gunners defence failed to deal with and were thankful to Manuel Almunia for an acrobatic save.
At the other end William Gallas went close when he met Cesc Fabregas' free-kick with a powerful header, but his effort flew over the bar.
Nicklas Bendtner should have done better on 26 minutes when he was slipped in by Andrey Arshavin on the right side of the area. The tall Dane burst into the box, but his shot was high and wide, when he really should have tested an exposed Pepe Reina.
Arsenal were beginning to come to life. Samir Nasri had a goal-bound effort blocked when he pounced on a weak punch by the Liverpool keeper in the 27th minute and seconds later Thomas Vermaelen got the ball caught in his feet when unmarked in yards of space.
Liverpool were looking dangerous from set-pieces and on 31 minutes the Gunners failed to clear another Gerrard free-kick. The ball fell to Maxi Rodriguez whose shot cannoned off Vermaelan's arm for a corner. The penalty claims were waved away though.
Fabregas had Arsenal's first shot on target in first-half stoppage time but it was a tame effort from the edge of the area that Reina gathered with ease.
Both sides started the second half more brightly. Arshavin had a cross-cum-shot go just wide of Liverpool's left post and Lucas stole the ball from Gael Clichy before racing into the right side of the area to fire a shot just over the bar.
David N'Gog looked to be clear but William Gallas raced back to put in a brave and precise sliding tackle to clear the ball as the young striker was about the shoot.
Arsenal were beginning to take control, but the threat of a Liverpool counter-attack was a real possibility as the home side lost possession too easily.
Fabregas shaved the top of the bar with a shot from the edge of the area and that was the highlight of a sustained period of pressure.
Arsenal looked as though they had forgotten how to win but eventually took the lead on 72 minutes when Diaby ghosted in between the Liverpool central defence to head home Rosicky's cross from the right from close range.
Fabregas fired a volley just wide on 82 minutes, but the Gunners were once again in their keeper's debt two minutes later when he made a fantastic flying save to keep a fierce 25-yard drive by substitute Ryan Babel out.
Liverpool tried their best to pull a goal back, but a nervous looking Arsenal defence held on for the points and closed the gap at the top.