This zone is the inside of the Djini's lamp. You must defeat a series of challengers to avoid the penalty for awakening the Djini.
To enter this zone, right-click on a lamp at the water's edge on the northeast beach of Pirate's Perch, and select "Rub". Speak to the Djini that appears and accept his challenge. The quest is named: The Gauntlet of al-Azhar.
WARNING: Once you accept his challenge and enter the zone, the only ways out are to win the challenge or gate out.