Finally did it.....here's how:

Had to save the whole file as plain text (unicode), then opened it in word again, and when it asked me about encoding this time I chose arabic (windows). Now I had my text but it was broken into letters. The other paragraphs which were already displayed correctly were now messed up of course. I tried to do a find/replace to remove the extra spaces, but it didn't work. Apparently the spaces are not "regular" spaces, but rather another character with messed up encoding too. So I tried "copying" the space character into the find/replace dialog, but still no use. So anyway, I saved the file, and opened it in notepad, then I did a find/replace in notepad using the copied space character, and it worked!! I finally had my text!! All I had to do then was copy the involved paragraphs one by one back to my original document, which was the really annoying part, but it's done now thank God!!

That's it, I hope this experience would be useful to anyone who might have the same problem!