That's right. "アルフ ライラ ワ ライラ" is the original Arabic title for 'One Thousand and One Nights' basically romanized and then written in katakana. Up until the time when the sound team dropped the "wa Lyra" part (late '90, early '91) the Arabic would generally be written together with the katakana on the front covers of their cd releases, as shown in the image below.
