This is the flag of Israel, but from a world where Israel was established in Uganda and Kenya following World War I. It was intended to be a steppingstone towards a Jewish homeland in the Middle East, but it wound up becoming a permeate homeland for the Jews. Race relations have been rather touchy. Basically, substitute the word Palestinians with the words Native Africans, and you've got a pretty good ideas of what it's been like. In recent times, however, greater efforts have been made to reconcile with the native population, as evidenced by the shield and spears on the flag.
Without a Jewish state in the Middle East thing are...complicated. On the one hand, the United Arab Republic has been fairly successful. It's comprised of Egypt, the nations of the Levant and Iraq; it's quite liberalized and leans towards secularism. Meanwhile, Saudi Arabia, and the rest of the Arabian Peninsula, have grown increasingly conservative and radicalized. The two nations tend not to get along too well.