This is a European film from Luxembourg I've not yet seen directed by Paul Kieffer. It seems to combat/deal with the Orientalistic notion of the Nights and of the Middle East (ie France past re-imaginings of Algeria and the contemporary Algerian immigrant experience in France, etc.) but the plot doesn't seem to resemble any of the tales of the Nights.
It's about a French train conductor who falls for a "lower class" Algerian woman who rides his train. When she disappears he goes to Algeria to look for her and a Oriental fantasy ensues.
While it was released in Europe in 2007 it has only recently been spotted in US film festivals.
Watch the film's trailer here:
Recent review from Belmont World Film Festival:
and at imdb: