The Gunners were off to a good start when Alexandre Lacazette threaded a pass to Pierre-Emerick Aubameyang who slotted it past Vicente Guaita in the 12th minute.
The hosts got their equalizer in the second half through Jordan Ayew, whose shot deflected off David Luiz before going over Bernd Leno into the net.
Speaking after the game, Arteta said Arsenal played like how he wanted them to play in the first 35 minutes.
"The first 35 minutes is exactly what I want our Arsenal team to play like,” the 37-year-old said.
“We were dominant in the right positions and created chances. After that we started to give free-kicks and give balls away.”
"In the first 15 minutes of the second half, credit to them because they pushed. They started to put men up front and we struggled. We switched off completely for the goal and that’s unacceptable.
"I don’t think we let our concentration slip. To control Palace for 90 minutes here is impossible. They put balls in the box and you have to defend the situation."
Arsenal were reduced to ten men when VAR intervened to send off Aubameyang for a dangerous tackle on Max Meyer midway through the second half.
Arteta was asked whether the red card shown to his captain was fair, but the Spaniard admitted that though he did not see the tackle but he thinks it was a harsh challenge.
"I haven’t seen it, but I think it was a harsh challenge. There was no intention, but I think he mistimed it."
