Jürgen Klopp has been keen to press ahead with a move for the highly-rated 20-year-old, who was a key part of the Gladbach squad that qualified for the Champions League third-round qualifiers thanks to a sixth-placed Bundesliga finish last term.
With 41 appearances and five goals in all competitions, Syrian-born German Under-21 international Dahoud established himself as one of the brightest young talents in Germany with a number of impressive performances.
Said displays clearly caught the eye of Klopp, who was willing to spend as much as £25 million on Dahoud this summer - but though the midfielder has only two years left to run on his current contract, Gladbach have refused to enter negotiations.
Reluctant to lose yet another key player, having already lost midfielders Granit Xhaka and Havard Nordtveit to Premier League outfits Arsenal and West Ham United, a move appears unlikely at this stage.
Dahoud transfer looking unlikely as move stalls
And Dahoud's revelation, that he is focusing on continuing his development at Borussia-Park, suggests that Liverpool will be left frustrated in their pursuit of the player.
"I am fully focused on Monchengladbach at the moment," Dahoud told Kicker, insisting that he still has "room for improvement" at Gladbach when asked about the rumours.
"My finishing has to improve," he added, insisting that he must also "get stronger in the air" and that he "can still improve physically" in order to "get stronger on the pitch."
The Bundesliga outfit's sporting director, Max Eberl, has however admitted that getting Dahoud to put pen-to-paper on a new contract could prove difficult due to the interest in him.
Eberl admitted that "of course" the club are trying to get Dahoud to "sign a new deal" but added: "But he has attracted a lot of interest. That makes it a difficult matter for us."
Meanwhile, the Telegraph report that Joe Allen is wanted by a minimum of six clubs as the Welshman, one of Euro 2016's most impressive performers, nears an exit.
His contract has just a year left to run on Merseyside with no talks yet to take place over a new deal. Allen's frustration at a lack of regular game time under Klopp could see him move on, although the Reds will not let him go cheaply.
With his former club Swansea City among several potential suitors, Sevilla, Southampton and a Russian side are all keeping tabs on the midfielder - who is supposedly valued at around £14 million.