Roberto Firmino earned Liverpool a point to keep them fourth after Arsenal and Jurgen Klopp's men went goal crazy again at the Emirates.
The top-four rivals shared the spoils after a roller-coaster six-goal thrillier, one short of the seven they managed last year in Liverpool's 4-3 win.
Philippe Coutinho first-half strike and Mohamed Salah's deflected 52n minute effort put Liverpool in command at the Emirates.
But Arsenal hit back a minute late through Alexis Sanchez and follow-up goals from Granit Xhaka and Mesut Ozil turned the match on its head in a mad-cap three goal in five minutes spell.
But Firmino had the final say when he squeezed a 71 minute equaliser past Petr Cech.
1. Why these two will be well off the title pace
Manchester City will win the league but here was perfect evidence of why these two sides will be trailing way behind them come the end of the sesaon.
Neither team can defend. Arsenal were all over the place for the first 52 minutes and could have been much more than 2-0 down.
Then Liverpool fell to pieces themselves - Joe Gomez switched off for Arsenal's first and Simon Mignolet produced another costly clanger for the second to leave more question marks over Jurgen Klopp's failure to address his goalkeeping position.
2. Alex Oxlade-Chamberlain
Having been talked up by Jurgen Klopp and down by Arsene Wenger Alex Oxlade-Chamberlain was not given enough time to prove his manager right or his old boss wrong.
He was given just seven minutes to make an impression after starting his return to the Emirates on the bench.
Having left Arsenal to try and find regular football at Anfield in August the home fans enjoyed reminding him where he was sitting on his comeback.
They taunted him with chants of “Oxlade-Chamberlain, he sits on the bench before greeting him with deafening boos when he came on.
3. Jordan Henderson
This has been a month to forget for Liverpool captain Jordan Henderson.
When he was left out against Spartak Moscow at the start of the month many fans were pleased and Liverpool produced a stunning 7-0 Champions League win.
He then returned for the disappointing 1-1 derby draw against Everton before remaining on the bench against West Brom.
He did feature in last week's 4-0 win at Bournemouth but his December was capped when he was forced off after just 10 minutes with a
4. Arsenal in possession
For a team once renowned for their football, Arsenal's first-half display must have been a tough watch for anyone who remembers Arsene's Wenger's side in their pomp.
It was alarming to see them struggle so badly to keep the ball. They seemed to be gripped by panic whenever they were in possession.
Alex Iwobi, Alexis Sanchez and Granit Xhaka were the biggest culprits.
And on the rare occasions Mesut Ozil kept the ball for more than a few touches his teammates ran away from him rather than towards him in support.
At least they looked more like their former selves in the second half when they produced a fightback which helped them earn a point.
5. Cech denied history
His next clean sheet will be his 200 in the Premier League making him the first goalkeeper to reach that landmark.
But it was not to be after Philippe Coutinho's first half goal. And it might be a while before he gets on the evidence of Arsenal's defending tonight.