The Brazilian striker has started 13 games this term, netting eight goals in all competitions, including one in Sunday's 7-0 FA Cup demolition of Rotherham.
Asked how he feels the forward can progress, Guardiola declared the 21-year-old's hunger will unlock his potential.
"He competes with Sergio Aguero," the manager told press.
"In the big clubs, all the players compete with their big teammates - it's simple.
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"I take the decisions that I feel are best for the team in the right moments. He has played ahead of Sergio before in important games (for that reason).
"People said my relationship with Sergio was bad but it is not correct. I try to be honest and when Gabriel Jesus has played more minutes, it's because of what I thought was best.
"In the moments when Sergio is fit, (he must remember) he's an important player and he has to fight for his position."
Watch part one of the manager's press conference above. Part two to follow at 10:30pm...