The Characters names are Persian.Scheherazade and Shahryār are not arabic names.True,There are some stories about arabs too in this book . but the main origins of this book are persian and indian.
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These stories trace back to ancient and medieval Arabic, Persian, Indian, Egyptian, and Mesopotamian literature. Many of these were originally folk tales from the Caliphate Era, while others are drawn from the Pahlavi Persian work Hazār Afsān. The original core of stories came from Persia and India in the eighth century.