Given the complications of languages, local laws, customs, and rights issues, they don't feel that they could launch a website based ebookstore in the middle east (like the Kindle Store or pretty much any other ebookstore in the world). Due to the local issues, Narain Jashanmal, the general manager of Jashanmal Bookstores, decided to fall back on a tried and true distribution method: physical medium.
The ebooks will be distributed on cards (with chips embedded, probably). They'll be sold in stores and customers will use in-store terminals to transfer the ebooks to their ereader or other device (iPad and Galaxy Tab both mentioned by name).
There are few details on the ereader, but my source does mention that it is being designed by Kibano, a Norwegian company. Curiously enough, Kibano don't have an ebook reader shown on their site - just mp3 Players. Infact, Kibano's system is pitched as being great for audiobooks, not ebooks. It's not clear if Kibano will design the ebook reader from scratch or license it from a (Chinese) manufacturer.
The ebook reader will cost between 600 and 800 UAE Dirham ($163 to $218 USD), and the ebooks will cost 150 and 200 UAE Dirham ($41 to $55 USD). Jashanmal plan to stock 300 titles to start, and the ebooks will likely cost about 15% more than their paper counterparts.