Sane threatened to make it four when his pace took him away from Mustafi but he overran the ball and Ospina claimed, and then Xhaka shot over as Arsenal looked for a consolation goal.
Guardiola, the former Barcelona captain and coach and a Catalan native, was this week charged by the Football Association with "wearing a political message" but nevertheless wore the ribbon again at Wembley for Sunday's Carabao Cup final.
"The first tests revealed a twist".
"They have to know we will not go far in the Champions League if we play like we did in the first half", he said. It's terrible for humanity. "In the second half we played with a lot more courage and personality - we were outstanding".
"This is a dark, dark day - the team have just not shown up". I'm so happy for the club.
"That's why it's important to win titles because it's going to help us win the next games in the Premier League".
So sorry for him and all the men and women paying hard earned money to watch this. "I still feel sometimes for periods in the game we defend very well and suddenly we lose a bit of concentration and against quality teams we pay for it".
For all City's dazzling football this season, the breakthrough came from an old-fashioned 70 metre hoof forward by City's keeper Claudio Bravo - who had kept his place in favour of usual keeper Ederson.
The Gunners are 10 points behind fourth-placed Tottenham Hotspur with one game in hand but Wenger said that his side will not prioritise the Europa League. There was a lack of fight, lack of determination.
MF Kevin De Bruyne, 7 - Chose the big event to mingle in and let David Silva take the plaudits. If Wenger heard them, they must have hurt.
Danny Welbeck (for Chambers, 65): Introduced moments after City had gone three goals ahead and had no chance to stir a memorable comeback.
That broke Arsenal and Silva ended the contest by finishing a slick move with a lethal left-footed strike after 65 minutes.
Guardiola wore the ribbon at Wembley and he said that, even if he was banned from the touchline by the FA, he would continue to do so.
City and Guardiola should harbour no such doubts.
The contrast between the two managers, the two teams, could not have been greater.