In what proved another pulsating, high quality encounter between the two English heavyweights, City made a superb start, subduing the Anfield crowd and taking a deserved lead through John Stones’ close range finish after a superbly executed Kevin De Bruyne corner.
However, Liverpool came roaring back after the break, winning a 46th minute penalty after Ederson brought down Darwin Nunez in the box.
Stefan Ortega was forced to come on to replace Ederson who was injured in making the challenge and Alexis MacAllister converted the subsequent spot kick.
Both sides then had chances to win the game with City substitute Jeremy Doku seeing a late shot from inside the box strike the foot of the post.
The result left Arsenal on top on 64 points with Liverpool also on 64 but with the Gunners enjoying a better goal difference and a game in hand.
City are third on 63 points but also with a crucial match advantage on the leaders.
WATCH: Brief highlights: Liverpool 1-1 City
And reflecting on the draw, Pep praised the quality and intensity of both sides but also pointed to the fact it kept City perfectly poised within striking distance of the lead with plenty of games still to play.
“It is a game that defined where both clubs have been for many years,” Pep reflected.
“This is our opponent and not one time [have they] dropped, maybe one season but always they will be there.
“Today I reflected with the guys what we have done over the years against Jurgen’s team. Give us more credit for what we have done.
“To us already it was clear. Arsenal last year came back and stayed there for a long time because they are a young team with an exceptional manager.
“There are still 10 games to play, 30 points to play for, one point difference. Still we are there. That is the important thing.”
The City boss also praised the way his side responded to an intense period of Liverpool pressure after their goal.
And he reflected on how City had again stayed true to our attacking principles at one of the most testing arenas in world football.
WATCH: Stones hails Ortega Moreno after Liverpool draw
“Before the goal we had chances with huge personality in the first half and after it was difficult because they have Endo and MacAllister and extra passes and quality to play before they were maybe more direct,” Pep added.
“We gave away the penalty and sooner or later in this stadium you have 15 or 20 minutes where it’s like a tsunami.
“They come for everybody, they have the ball and everything.
“After when Mateo [Kovacic] came on we made extra passes, and this is the target. In the first half, it’s not we didn’t want it, it’s that they’re strong in their pressing in this stadium... it’s not easy.
“We never give away trying to play. With Mateo, John, Rodri and Phil inside we had the quality to keep the ball like we couldn’t before.
“We had our chances, they had their chances and at the end of the game it’s what happened.
“We talk [about keeping the ball] but sometimes you can’t because they are the best team I’ve ever seen at high pressing.
“We were able to do it in the last two games at the Etihad, we drew.
“But here it is completely different, the fact of the environment is a reality, and the players know it and the opponents know it. When we are able to do it we never try to forget to play
“That’s what I like because sometimes it’s difficult.”
