Barcelona is looking to bring the World Cup winner back to the Nou Camp, but Arsenal remains determined to hold out for a £40million fee.
Fabregas has not featured in any of Arsenal's pre-season games, with the club saying he needs to work on his match fitness following a troublesome hamstring.
Speaking at a press conference ahead of the Emirates Cup, Wenger said: "He is not settled, with his injury and his situation. That has to be sorted out soon.''
Wenger insists he will not allow the saga over Fabregas' future to roll on indefinitely.
"You know all the speculation which is around his position, that has to be sorted out soon.''
Wenger maintains he has to concentrate on those players who are fully committed to the Arsenal cause.
"There is only one deadline, it is on August 31. The other deadline is for us to get everybody focused, the players who are really committed to the club, my energy and my focus goes on them,'' he said.
"That is what I focus on, I cannot help the other situation, because it does not only depend on me, it depends on the players and on the other clubs.''
Wenger wants to be certain Fabregas' heart still remains in taking the young Arsenal side forward.
He said: "I'm just worried that the player has to be completely focused and committed to our club.
"At the moment he's coming back from an injury and we have to sort out that situation.
"He is the captain of our club and we have to make sure he is really focused on being with us.''
Whether or not it would be better to simply allow Fabregas to leave, Wenger said: "Frankly I don't know. I don't master completely the situation - it depends on Cesc.
"I think he's in a moment when he thinks about it and it is a big concern.
"I always say he is torn between two loves - the club where he has been educated as a very young boy and the club where he has been educated from 16 onwards and he has been given a chance.
"I personally can understand it - but of course we want to be certain about his complete commitment.''
However, Wenger also maintains Arsenal must always look for value for money and not just sell on the cheap for the sake of it.
The Arsenal manager said: "It would mean that anybody who just wants to leave we will have to let him go, and for any price.
"It has to be as well that the three parties agrees and that everybody is happy at the end.
"If there is only two who are happy and one is very unhappy it doesn't work.
"We have a responsibility towards our club and I have that responsibility to sell the players at a decent price. Or I take money away from my club. And that is not just to please one player.''
Wenger is also hopeful contract rebel Samir Nasri will sign a new deal.
He said: "Samir loves the club, like Cesc. They both do.
"Every day we read that they are going somewhere but they are still with us.''