Go to Settings >> General >> International >> Languages and choose your language. I'm pretty sure Arabic is there, but I'm not familiar enough with the letters to be certain.
Once you choose it all the system stuff like menus and settings should change. Apps that use English or other languages probably won't. You will end up with extra touch keyboard layouts, if you don't already have them set up. To switch between keyboards tap the key with the world icon, just to the left of the space bar. Tapping moves through them one at a time. Tap and hold to select from a list.
Note: If you only have one keyboard set up, you won't see the world key.