The Gunners travel to Anfield for the clash between the only sides who have won both of their opening Premier League fixtures.
Xhaka was forced to sit out Arsenal’s 2-1 win over Burnley in their last outing, but is in contention for a place in their squad for their trip to Merseyside.
The Swiss midfielder has become a key player under boss Unai Emery, who recently made him club captain.
He was suffering from a back injury but the Mail report Xhaka is back to full fitness after joining in training this week.
German playmaker Mesut Ozil could also be in line for a place in the squad after missing the first two games over security concerns.
Ozil and teammate Sead Kolasinac were pulled out of the Gunners’ trip to Newcastle on the opening day after they were caught up in a North London gang conflict.
The pair were victims of an attempted robbery by knife-wielding assailants earlier this month, before later being threatened at their own homes which sparked fears for their safety.
Kolasinac was on the bench for Arsenal’s match with Burnley, and Ozil could now join the rest of his teammates for Saturday’s tie after training as normal all week.
However Arsenal legend Ray Parlour still believes his former club have a tall task ahead of them against last years title challengers, and stated they are still some way behind Jurgen Klopp’s side.
Parlour told talkSPORT: “I heard a few shows yesterday saying we can challenge for the league, but they’re a million miles away from Man City and Liverpool at the moment, if I’m honest.
“How many Arsenal players would get into the Liverpool team?
“The most important think is getting back into the Champions League. Maybe they could push a bit higher, but if they get fourth place this season I’d be delighted.”