Mikel Arteta has vented his anger at being denied a “1000 percent penalty” and insisted Arsenal put in their best European performance in years despite their 1-0 defeat at Inter Milan.

Hakan Çalhanoglu's free-kick in first-half stoppage time ended a tight encounter at the Stadio San Siro and handed the Gunners another setback in their Champions League campaign.

Mikel Merino was tackled in the penalty area 17 minutes after an incident at the other end of the pitch in which he was tackled by Inter goalkeeper Yann Sommer.

“I don’t understand (the handball decision),” said Arteta.

“There is no danger at all. You can't react because the ball is very close. But okay. They decide it’s a penalty.”

“But if that is a penalty, then the one against Mikel Merino where he hits him on the head must 1000 percent be a penalty. These are the margins in this game and it’s very difficult to accept.”

“We were told at the start of the season that it wasn’t a penalty. That was clear. Today was a different story.”

After a slow start, with Denzel Dumfries hitting the crossbar in the second minute, Arsenal increasingly dominated possession but could not find a way past Sommer.

This result puts Arsenal in 12th place in the Champions League table.

Despite suffering his third defeat in six games across all competitions, Arteta was defiant ahead of Sunday's Premier League game against Chelsea.

“For all the big games we have played in Europe, this is by far the best we have played in recent years,” he said.

“If we play the way we played, we have a good chance of winning against Chelsea.”