The mention of iso-8859-1 might be the cause of the problem. Is the template regarded as encoded in iso-8859-1 and then translated to utf-8? This should not be done, since this (custom) template is already utf-8 encoded, and has arabic text in it.
How do I specify the encoding of the template files? Is there some template code that has to be inserted, or is it some ini file setting?
I tried to work around this problem by converting all text that doesn't fit in the iso-8859-1 encoding to character entities (using Dremweaver, saving a utf-8 document as iso-8859-1), Dreamweaver converts the text to character entities (like ع) which are not affected by the template parsing, and hence display correctly.
Of course this is not a good solution, and I would greatly appreciate some feedback from the ez crew on this template encoding issue.