The Arab Swordsman was encountered by Indiana Jones in Cairo in 1936. While Indy was searching for the kidnapped Marion Ravenwood, the busy Cairo marketplace suddenly freezes as a black-robed man confronts Jones expecting an easy kill with the foreigner. However, with a gun by his side, Jones decides just to simply shoot him. This results in cheers from the Cairo citizens.
Behind the scenes
The scene in Raiders of the Lost Ark was actually filmed by an accident. Harrison Ford had recently suffered from injuries, and was not fit to film a lengthy sword duel. Ford then suggested to "just shoot the fucker". This is the direction Steven Spielberg decided to go in.
The scene is almost punned in the Temple of Doom prequel. On his escape from the Temple, two swordsmen approach Indy, and he puts his hand to his gun case... only to realize that he has long been stripped from it.