Film censorship is common in Arab countries. What's noteworthy here is that the film in question is about Israeli/Palestinian relations, a subject that's probably of some considerable interest to many people in that region. Sandler's character, a former Israeli spy, moves to New York and gets a job at a hair salon run by a Lebanese-American woman -- but people in Lebanon won't be able to see the film. I guess the movie's final message of looking past our differences and learning to get along with each other was deemed too offensive.
Well, OK, as noted in Variety, anything with a lot of sexual content, political messages, or religion bashing is liable not to make it past the censors in the Arab world, and Zohan has plenty of all three. The film's Middle East distributor, Circuit-Empire, is still showing the film to the other Arab countries' censorship boards, but they don't expect it to fare any better than it did in Egypt, Lebanon, and the United Arab Emirates. Sorry, Middle East! You'll have to view images of Sandler's comically oversized package by some other means!