Barca have a six-point advantage over the champions with seven matches left and can move a step closer to a first Spanish title in three years with victory over third-placed Sevilla at the Nou Camp on Wednesday.
Real have a chance to cut the Catalans' lead in half when they host city rivals Getafe on Tuesday and know that the clash against Barca on May 3 could be a last chance to prevent Pep Guardiola's side taking their league crown.
"Barcelona have two very hard matches and then the Champions League (semi-final against Chelsea) but the title will be decided in the Real Madrid-Barcelona match," Diarra said in an interview published in Monday's Marca newspaper.
"It very much has that look about it and it's going to be a spectacular game," the French international added.
Under coach Juande Ramos, Real have won 15 of their 16 league matches since losing 2-0 at the Nou Camp in mid December, staying in the hunt for a third consecutive title and hoping Barca's packed schedule would cause them to slip up.
Barca are still alive in three competitions - Spanish league, King's Cup and Champions League - and midfielder Xavi said he was feeling neither physically nor mentally tired.
"It's a privilege to have a calendar as packed as ours and to have a chance to compete for glory," the Spain international told the club's website.
"They (Real) are talking about something hypothetical whereas I talk about realities," he added. "We are the ones who are in front and we are the ones with the six-point lead."
Barca's task against Sevilla will be made easier by the absence of the Andalusians' first-choice goalkeeper Andres Palop and defender Adriano Correia, who are suspended.
Valencia play at improving Real Betis on Wednesday on a run of four straight league wins that has lifted Unai Emery's side above Atletico Madrid and Villarreal into the fourth Champions League qualification spot.
