Wenger finds positives but Arsenal blow two-goal lead Arsenal, who were "so bad it was frightening" in their game against Manchester United last Saturday (according to the BBC's Alan Hansen), improved considerably on that performance but still lost a two-goal lead here last night and with it the top position in Group B that they had technically regained at half-time. A goal just before the interval by the excellent Klaas-Jan Huntelaaar, who has scored in all four of Schalke's Champions League games this season, was the spur the home side needed after Theo Walcott, starting at last, and Olivier Giroud had reversed the scoreline from the match at the Emirates a fortnight ago. Arsenal's rejigged defence was under severe pressure for most of the second half and Jefferson Farfan, another impressive performer, drove in the equaliser midway through it. From then on survival was the aim and was just about achieved with backs firmly against the wall, although Walcott had a chance to steal an undeserved victory with almost the last kick. Olympiakos's 3-1 win at home to Montpellier gave them six points, only one behind Arsenal, who still trail Schalke by one. Montpellier visit the Emirates next before Arsenal go to Piraeus. Arsène Wenger, back on the touchline after serving a three-match ban, decided in the end that his glass was half-full; perhaps even two-thirds, since as he pointed out beating the French side will put Arsenal in a strong position. "It was important not to lose and if possible to win," he said. Overall we played reasonably well but dropped physically in the second half. I believe we've shown a good response to Saturday's game. Theo did very well and you could feel he could score or make a goal. Walcott's return was an overdue change, his stomach upset having improved sufficiently to merit the start that Wenger has been so reluctant to give him ever since the saga of his new contract began. With the manager wanting his team to play a more attacking game rather than worry about recent defensive frailty, it was noticeable that Jack Wilshere, in his first Champions League game for 20 months, was positioned well ahead of Mikel Arteta in what was effectively a 4-1-4-1 formation intended to offer greater scoring potential. So it proved and a highly entertaining game resulted for the capacity crowd when Arsenal finally settled after being pushed back for the opening quarter of an hour. In that period Vito Mannone had to save low down from Ibrahim Afellay, who had scored in the first game, and Benedikt Höwedes , the home captain, headed Farfan's corner narrowly over the bar. Arsenal came through it and suddenly prospered. In the 18th minute, Roman Neustädter's misplaced back-header allowed Giroud through and although Höwedes seemed to have thwarted him with an excellent tackle, Walcott kept calm in dragging the ball away from the goalkeeper to score his eighth goal of the season. Eight minutes later Giroud was involved in the build-up, taking a pass from Wilshere and laying one out to Lukas Podolski before heading in the German's cross from six yards while unmarked. Schalke continued to be roared on by a typically fervent German crowd and always looked as though they had at least one goal in them when they flowed forward. Arsenal had finally left out the Brazilian full-back Andre Santos, not for his premature shirt-swapping at Old Trafford but because he had been taken to the cleaners by a succession of wingers, including Antonio Valencia and Schalke's Farfan. When the home side again fed diagonal passes towards the corner flag last night they found Thomas Vermaelen for the most part - although not always - more adept at blocking off the space. The Arsenal captain has made it clear in the past that he does not like playing there but with Kieran Gibbs not yet fit - he may return against Fulham on Saturday - it was imperative to shore up that side of the defence. Several desperate blocks were required to keep the home side at bay and after Giroud had headed Arsenal's only other chance of the first half straight at the goalkeeper Lars Unnerstall - kept in the side despite being at fault with two goals at the weekend - Schalke scored in the final move before the interval. Santi Cazorla lost possession and Lewis Holtby, the half-English midfielder, laid a first-time pass off perfectly for Huntelaar to score at a valuable moment. Wenger felt a free-kick immediately beforehand should have been given in Walcott's favour, not against him. As the atmosphere intensified early in the second half, even with the stadium roof left open, so did the pressure on Arsenal, whose lead should have disappeared in the first Schalke attack. Huntelaar, who is allegedly interesting Liverpool, was sent clear and given onside but Mannone beat the shot away at the expense of a corner that led to a furious scramble. The London side eventually cleared, only after surviving confident shouts for handball. In the next attack Marco Höger, an early substitute, hit the outside of a post and in the one after that Mannone could only push out a fierce drive from Holtby, the rebound just eluding Huntelaar. Finally the home side drew level and deservedly so. Holtby missed a header but the ball dropped kindly for Farfan whose shot, probably bound for the far corner of the net, was helped in by Vermaelen. Not until added time did Arsenal threaten again and it would have been a travesty of a result had Walcott received further reward for his persistence by beating Unnerstall when clean through. Man of match Huntelaar. Referee N Rizzoli (It). Attendance 50,000.