The 19-year-old Uruguayan rough diamond has impressed since joining the Sicilians from Penarol last year, scoring four in 16 Serie A appearances.
Hernandez played at the Under 20 World Cup in Egypt last year, scoring against eventual winners Ghana, and is a pacy, 6ft 1in forward.
In the pink: Hernandez (No 90) scores against Lazio, before celebrating (below)
He overcame fears of a heart condition before signing for Palermo 13 months ago and is already catching the attentions of bigger clubs.
The left-footer could be a long-term solution to Arsenal's lack of a target man, but Arsene Wenger is closing in on the summer Bosman signing of Bordeaux striker Marouane Chamakh and also has Nicklas Bendtner at his disposal.
Wenger faces anxious wait on Fabregas ahead of showdown with PortoArsenal can win the Double! Arsene sets his sights on League and Euro gloryI'll be back, insists horror-injury victim Aaron Ramsey, who snubs ShawcrossArsenal 3 Burnley 1: Theo Walcott puts his England misery behind himARSENAL FC