The Arsene Wenger led side that had missed out on a Champions League spot last season by 1 point had begun the season poorly before stringing together a series of impressive performances to improve on their league position.
Brighton had limited opportunities to exert themselves as an attacking force but March rattled the upright when a free-kick was laid into his path after 28 minutes, with Petr Cech helpless. Defender Lewis Dunk could not adjust his feet in time to divert the rebound on target.
And Arsenal reportedly hope they can reach a deal with the player, who joined the North London club when he was nine, by the end of the year.
Arsenal doubled their lead after the break. He cleared off the line when Sanchez's shot beat Ryan and then, after March had also denied Sead Kolasinac from under the crossbar, made a last-ditch block on Lacazette.
With the result all but settled, the game became a means for Sanchez get the goal his efforts deserved.
Sanchez proved a permanent menace, testing Brighton with his tight turns and inventive passes.
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Rookie Dylan Cole added to the lead when he returned an interception 25 yards for a touchdown with about nine minutes remaining. Watson has thrown for 528 yards and three touchdowns with three interceptions while rushing for 124 yards and a score.
Their manager, Chris Hughton, is a flawless fit for the club, modest and hard-working who values the collective over individuality.
The two sides last met in the FA Cup fourth round three seasons ago, with Arsenal battling hard to grab a 3-2 win enroute to winning the competition.
"When you have competitive players, you don't like losing".
Arsene Wenger has now beaten 45 different opponents in the @premierleague, more than any other manager (Alex Ferguson, 44).
Monreal turned home the 17th-minute opener following a scramble in the Albion box, before Nigeria midfielder Iwobi sealed success by superbly finishing following a flowing Arsenal move early in the second period. While the first two games saw him eased into the side as a substitute following a small injury concern with his ankle, he's only completed the full match once in the following four Premiership fixtures.
Arsenal enters the weekend in seventh in the Premier League with 10 points after six matches.