1. Install arabtex

2. Install iso10646-1 fonts (i.e. make them accesible to the X server).
For example, you can install the fonts from 
  http://corefonts.sourceforge.net/

3. Add the following lines to ~/.lyx/lyxrc (if you use the preferences dialog
then add the lines to ~/.lyx/preferences, except the last line which you
should add to your bind file)

\kbmap true
\kbmap_primary null
\kbmap_secondary arabic
\rtl true
\mark_foreign_language false
\language_command_begin "\begin{arabtext}"
\language_command_end "\end{arabtext}"
\language_package "\usepackage{arabtex,iso88596} \setcode{iso8859-6}"
\screen_font_encoding iso10646-1
\screen_font_encoding_menu iso8859-1
\screen_font_scalable true
\screen_font_roman "-*-times new roman"
\screen_font_sans "-*-arial"
\screen_font_typewriter "-*-courier new"
\screen_font_scalable true
\bind "F12" "language arabic"

4. Get the file http://cs.haifa.ac.il/~dekelts/lyx/arab-article.layout
and put it in ~/.lyx/layouts/
Run LyX and select the edit->reconfigure menu, and exit from LyX

5. Now you are ready to start writing Arabic documents:
Start a new document, open the document layout popup (layout->document menu)
Select article(Arabic) as the document class, default as the encoding,
and English as the language (not Arabic!), and press OK.
Use the F12 key to switch between Arabic and English.


If your system does not support iso10646-1 fonts, get the font from
http://www.langbox.com/AraMosaic/mozilla/fontXFE/
and use the following lines in lyxrc/preferences:

\screen_font_encoding iso8859-6.8x
\screen_font_encoding_menu iso8859-1
\screen_font_roman "-*-naskhi"
\screen_font_sans "-*-naskhi"
\screen_font_typewriter "-*-naskhi"
\screen_font_scalable false