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In Arab culture

There is little evidence that the Nights was particularly treasured in the Arab world. It is rarely mentioned in lists of popular literature and few pre-18th-century manuscripts of the collection exist. Fiction had a low cultural status among Medieval Arabs compared with poetry, and the tales were dismissed as khurafa (improbable fantasies fit only for entertaining women and children). According to Robert Irwin, "Even today, with the exception of certain writers and academics, the Nights is regarded with disdain in the Arabic world. Its stories are regularly denounced as vulgar, improbable, childish and, above all, badly written".

Nevertheless, the Nights have proved an inspiration to some modern Egyptian writers, such as Tawfiq al-Hakim (author of the Symbolist play Shahrazad, 1934), Taha Hussein (Scheherazade's Dreams, 1943) and Naguib Mahfouz (Arabian Nights and Days, 1979). Idries Shah finds the Abjad numerical equivalent of the Arabic title, alf layla wa layla, in the Arabic phrase ʾumm al-qiṣṣa, meaning 'mother of stories'. He goes on to state that many of the stories "are encoded Sufi teaching stories, descriptions of psychological processes, or enciphered lore of one kind or another".

On a more popular level, film and TV adaptations based on stories like Sinbad and Aladdin enjoyed long lasting popularity in Arabic speaking countries.