Viktor Gyokeres sent the Premier League leaders ahead from the spot just before the interval after he was fouled, but Alvarez followed suit 10 minutes into the second half after Ben White’s handball.
Arsenal were upset at a late penalty decision being overturned following a VAR review when David Hancko made contact with Eberechi Eze in the area.
“I’m incredibly fuming,” said Arsenal coach Mikel Arteta. “It’s a clear and very obvious penalty.”
Atletico had the better for long periods but Arsenal’s solid defending helped them leave the Spanish capital in a good position to return to the Champions League final 20 years after their last appearance.
“Here, you have to suffer,” Arteta told Movistar. “Many teams have suffered here, including some of the best in the world.
“We had some good moments in the match and moments where we had to suffer. The margins are very slim.”
Atletico captain Koke said his side could be proud of how they played in the second half.
“We were the team we have to be – if we play at this level we can win,” Koke told Movistar.
“From my point of view they didn’t create much danger against us… the team defended well and they just had that penalty.”
The winners will face Paris St Germain or Bayern Munich in the May 30 final in Budapest, with PSG leading 5-4 from their first leg. (AFP)
