Yes it says Shahr-i Khan (Shahrikhon in modern Uzbek). It is spelt correctly on the scabbard and incorrectly on the blade. Again, that kind of mistake might indicate it was made relatively recently. It’s not about the Arabic language per se but about the form of the Arabic alphabet that was used for writing Uzbek and other Turkic languages in Central Asia until the 1920s, when it was replaced with Cyrillic.
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