Rice, 24, is set to be sold at the end of the season after turning down two offers from the Hammers to extend his contract.
Arsenal are the frontrunners for Rice, though Chelsea and Liverpool also hold an interest.
The England midfielder could fetch as much as £100m on the open market but such is his importance to West Ham, the club will have to reinvest that money across two players to replace him, according to the Evening Standard.
Gallagher was a target for West Ham last summer, when there was hope that Chelsea would listen to offers for the midfielder following his impressive loan spell at Crystal Palace.
He remained at Stamford Bridge but playing time has been limited and he’s even further down the pecking order now following the arrival of Enzo Fernandez.
Phillips joined City from Leeds United last summer in a £55m deal but the midfielder has made just five Premier League appearances for Pep Guardiola’s side due to injuries.
City will consider cutting their losses on Phillips, while a loan deal cannot be ruled out.
David Moyes is under severe pressure at the London Stadium but he’s been given a vote of confidence by the board.
The Scot is likely to leave the club at the end of the season.
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