Here is a list I've compiled of books that are written in English that will give a positive view of the Arab culture and evade stereotype.
* Abdel-Fattah, Randa.
Does my head look big in this? New York: Orchard Books, 2007.
* Abdel-Fattah, Randa.
Ten things I hate about me. New York: Orchard Books, 2009.
* Abdel-Fattah, Randa.
Where the streets had a name. New York: Scholastic Press, 2010.
* Azzoubi, Rana.
Million Star Hotel. Charleston, SC: BookSurge Publishing, 2009.
* Azzoubi, Rana.
Through a Mud Wall. Charleston, SC: BookSurge Publishing, 2007.
* Bahous, S.
Sitti and the cats: A tale of friendship. Boulder, CO: Roberts Rinehart Publishers, 1997.
* Ben-‘Ezer, Ehud.
Hosni the dreamer: an Arabian tale. New York: Farrar Straus Giroux, 1997.
* Boueri, Marijean.
Lebanon 1-2-3: A counting Book in Three Languages. Exeter, NH: Publishing Works, 2005.
* Boueri, Marijean.
Lebanon A to Z: a Middle Eastern mosaic. Exeter, NH: Publishing Works, 2005.
* Bunting, Eve.
One green apple. New York: Clarion Books, 2006.
* Butler, Sean and Shannon.
Issa and the Coin. London: Stacey International Publishers, 2007
* Carmi, D.
Samir and Yonatan. New York: Arthur A. Levin Books, 2000.
* Clinton, C.
A Stone in my Hand. Cambridge, MA: Candlewick Press, 2002.
* Cohen, Miriam.
Layla's Head Scarf. Cambridge, MA: Star Bright Books, 2009.
* da Costa, Deborah.
Snow in Jerusalem. Morton Grove, IL : A. Whitman, 2001
* Devine, Barbara.
Elvis the Camel. Northampton, MA: Crocodile Books, 2002.
* Durkee, N.
The Animals of Paradise. London, UK: Hood Hood Books, 1996.
* Ellis, Deborah.
Children of War. Toronto, Canada: Groundwood Books, 2009.
* Ellis, Deborah.
No Safe Place. Toronto, Canada: Groundwood Books, 2010.
* Farmer, Nancy.
Clever Ali. New York: Orchard Books, 2006.
* Geyer, Flora.
Saladin: the Muslim warrior who defended his people. Washington, D.C.: National Geographic, 2006.
* Gray, Nigel.
A Balloon for Grandad. New York: Orchard Books, 1988.
* Hafiz, Dilara and Imran Hafiz and Yasmine Hafiz.
The American Muslim Teenager's Handbook. Phoenix, AZ: Acacia Publishing, 2007.
* Heide, Florence Perry and Judith Heide Gilliland.
Days of Ahmed’s Secret. New York: Clarion, 1990.
* Heide, Florence Perry and Judith Heide Gilliland.
The House of Wisdom. New York: DK, 1999.
* Heide, Florence Perry and Judith Heide Gilliland.
Sami and the Time of Troubles. New York: Clarion, 1992.
* Henderson, Kathy.
Lugalbanda: the boy who got caught up in a war. Cambridge, MA: Candlewick Press, 2006.
* Hickox, R.
The Golden Sandal. New York: Holiday House, 1998.
* Hill, Eric.
Boby Yazhab Ilal Madrasa (Spot Goes to School) (Arabic edition). New York: Interlink Pub Group, 1988.
* Hughes, Vi.
Aziz the Storyteller. Northampton, MA: Crocodile Books, 2002.
* Hussain, Asim.
Khadijah goes to School. Toronto, Canada: LogixPlayer Inc. 2011.
* Johnson-Davies, D.
Aladdin. Dokki, Cairo: Hoopoe Books, 1995.
* Johnson-Davies, D.
Goha the Wise Fool. Dokki, Cairo: Hoopoe Books, 1993.
* Johnson-Davies, D.
Stories from the Arab Past. Dokki, Cairo: Hoopoe Books, 1997.
* Johnson, Julia.
A is for Arabia. London: Stacey International Publishers, 2005.
* Johnson, Julia.
The Cheetah's Tale. London: Stacey International Publishers, 2004.
* Johnson, Julia.
A Gift of the Sands. London: Stacey International Publishers, 2005.
* Johnson, Julia.
Humpy Grumpy Saves the Day. London: Stacey International Publishers, 2007.
* Johnson, Julia.
One Humpy Grumpy Camel. London: Stacey International Publishers, 2006.
* Johnson, Julia.
The Pearl Diver. London: Stacey International Publishers, 2003.
* Johnson, Julia.
Saluki, Hound of the Bedouin. London: Stacey International Publishers, 2005.
* Katz, Karen.
My First Ramadan. New York: Henry Holt and Co. 2007.
* Kimmel, Eric A.
Joha makes a wish: a Middle Eastern tale. New York: Marshall Cavendish, 2010.
* Laird, Elizabeth.
A Fistful of Pearls ad other Tales from Iraq. London, UK: Frances Lincoln Children's Books, 2008.
* Laird, Elizabeth.
A little piece of ground. Chicago, IL : Haymarket Books, 2006.
* Lewin, T.
The Storytellers. New York: Lothrop, Lee & Shepard, 1998.
* Marchant, Kerena.
Muslim Festival Tales. Austin, TX: Raintree/ Steck-Vaughn, 2001.
* Matthews, Mary.
Magid Fasts for Ramadan. New York: Clarion Books, 1996.
* Matze, Claire Sidhom.
The Stars in My Geddoh’s Sky. Morton Grove, IL: Albert Whitman, 2000.
* MacDonald, Margaret Read.
How many donkeys? An Arabic counting tale. Morton Grove, IL: Albert Whitman & Co., 2009
* MacDonald, Margaret Read.
Tunjur Tunjur Tunjur: A Palestinian Folktale. Cavendish, Marshall Corporation, 2006.
* Mobin-Uddin, Asma.
The Best Eid Ever. Honesdale, PA: Boyds Mills Press, 2007.
* Mobin-Uddin, Asma.
My Name is Bilal. Honesdale, PA: Boyds Mills Press, 2005.
* Morris, Ann.
Grandma Hekmatt remembers: an Arab-American family story. Brookfield, CT: Millbrook Press, 2003.
* Munshey, Sana.
We're Off To Make 'Umrah. Leicestershire, UK: Islamic Foundation, 2010.
* Nagda, Ann W.
Dear Whiskers. New York: Holiday House, 2000.
* Nicki, Peter.
Crocodile, Crocodile. Northampton, MA: Crocodile Books, 1976.
* Nimr, Sonia.
Ghaddar the Ghoul and Other Palestinian Stories. London: Frances Lincoln Children's Books, 2008.
* Nye, Naomi Shihab.
Habibi. New York: Simon Pulse, 1999.
* Nye, Naomi Shihab.
Sitti's Secrets. New York: Four Winds Press, 1994.
* Oppenheim, Shulamith.
The Hundredth Name. Honesdale, PA: Boyd’s Mill, 1995.
* Osborne, Mary Pope.
Season of the sandstorms. New York: Random House, 2005.
* Raatma, Lucia.
Queen Noor: American-born queen of Jordan. Minneapolis, MN: Compass Point Books, 2006.
* Rumford, J.
Traveling man: The journey of Ibn Battuta. Boston: Houghton Mifflin, 2001.
* Rumford, James.
Silent Music. New York: Roaring Brook Press, 2008.
* Sales, Francesc d'A.
Ibrahim. New York: Lippincott, 1989.
* Shalaby, Alaa.
Geemo and the Missing Egg. Mckeesport, PA: ShalabyMedia, 2008.
*
Sharif, Medeia.
Bestest. Ramadan. Ever. Woodbury, MN: Fluz Publishing, 2011.
* Shefelman, J.
A Peddler's Dream. Austin, TX: Houghton Mifflin, 1992.
* Sheffield, Marilyn.
Fizza the Flamingo. Northampton, MA: Crocodile Books, 2003.
* Shulevitz, Uri.
The travels of Benjamin of Tudela. New York: Farrar, Straus and Giroux, 2005.
* Simpson, Juwairiah J. L.
A Wicked Wazir. Plainfield, IN: American Trust Publications, 1990.
* Simpson, Juwairiah J. L.
The four daughters of Yusuf the dairy farmer. Plainfield, IN: American Trust Publications, 1984.
* Simpson, Juwairiah J. L.
The Jinn in the Clock. Plainfield, IN: American Trust Publications, 1990.
* Simpson, Juwairiah J. L.
The Princess Who Wanted to Be Poor. Plainfield, IN: American Trust Publications, 1987.
* Smith, Chris.
One city, two brothers. Cambridge, MA : Barefoot Books, 2007.
* Spalding, Elizabeth and Sarah.
Dahman: The Mystery of the Champion Arabian Horse. Saudi Arabia: Al Mutawa Press, 2006.
* Stamaty, Mark Alan.
Alia's mission: saving the books of Iraq. New York: Alfred A. Knopf, 2004.
* Stanley, D.
Saladin: Noble prince of Islam. New York: HarperCollins, 2002.
* Stolz, J.
The Shadows of Ghadames. New York. Delacorte Press, 2004.
* Tondino-Gonguet, Grace.
Halimah and the Snake And other Omani Folk Tales. London: Stacey International Publishers, 2008.
* Von Denffer, Ahmad.
Islam for Children. Leicester, UK: Islamic Foundation, 2008.
* Whelan, Gloria.
Parade of shadows. New York: HarperCollins, 2007.
* Whitesides, Barbara.
Sugar Comes from Arabic. Northampton, MA: Interlink Books, 2009.
* Wildsmith, Brian.
Animals to Count. Long Island City, NY: Star Bright Books, 2009.
* Wilkes, Sybella.
Out of Iraq. London, UK: Evans Brothers Limited, 2010.
* Williams, Karen Lynn and Khadra Mohammad.
Four Feet, Two Sandals Grand Rapids, MI: Eerdmans Books for Young Readers, 2007.
* Winter, Jeanette.
The librarian of Basra: a true story from Iraq. Orlando, FL: Harcourt, Inc, 2005.
* Zeman, L.
Sindbad: From the Tales of the Thousand and One Nights. Toronto, Ontario: Tundra Books, 1999.