City head into the weekend trailing leaders Arsenal, though they still have a game in hand and will host the Gunners next month in what could prove a decisive encounter. Guardiola insists there is little margin for error in the final stretch of the campaign.
"The Premier League is the most difficult title," Guardiola said. "We are still there, but we know if we drop points it will be over."
The warning comes after City suffered a 3-0 defeat to Real Madrid at the Bernabeu on Wednesday in the first leg of their Champions League last-16 tie. Guardiola admitted overturning the deficit in next week's return leg at the Etihad Stadium will be difficult.
"We don't have many dollars in the bank," he said of City's chances of a comeback. "But we will see on Tuesday. Now it's West Ham."
Guardiola stressed that his focus remains on the league fixture, with City unable to afford further dropped points as the season enters its decisive phase.
"Tomorrow night we have an important game for the Premier League position. After that we will have time to think about the second leg," he said.
City face a West Ham side also battling for crucial points. The Hammers remain in the relegation zone but have improved recently, losing only two of their past 11 matches in all competitions.
Guardiola acknowledged the added challenge of facing a team fighting to stay up.
"They are desperate, but we are desperate too," he said. "In the last 10 games every team plays for something. Now there are no second chances."