It helps to understand the Arab mindset when you realize that his lying to you with a straight face is his way of saying "screw you". It is also his way of saving face. An Arab will go to great lengths to avoid "losing face". Arabs are part of a "shame culture", as distinct from the Western "guilt culture". Dr Sanity had a good article on the concept. I used to have a better article, but I've misplaced the link to it somewhere.
There is a religious basis for this as well. The doctrine of supersession has an effect. Under this doctrine later verses in the Koran may ‘supercede’ earlier verses that the later verses directly contradict. But because both are the divine word of Allah, they are both equally true. Thus, the Muslim can accept contradictions without blinking an eye. This goes a ways towards understanding why they accept what is arrant nonsense to the western mind.