To let Mantis 1.0.x accept Arabic input, we did the following:

• First convert the existing database to UTF-8. You need to make sure that my.cnf contains the following:

[mysqld]
max_allowed_packets=16M
init-connect='SET NAMES utf8'
 
[mysql.server]
default-character-set=utf8

• Export the current database:

$ mysqldump -u root -p --opt --allow-keywords --hex-blob --max_allowed_packet=16M --quote-names mantis > mantis.sql

• Convert the contents to UTF-8:

$ iconv -f latin1 -t UTF-8 mantis.sql > mantis-utf8.sql

• Convert the schema to UTF-8:

$ sed s/latin1/utf8/g mantis-utf8.sql > mantis-utf8-utf8.sql

• Put back the database:
  $ mysqladmin -u root -p drop mantis
$ mysqladmin -u root -p create mantis
$ mysql -u root -p mantis < mantis-utf8-utf8.sql

• Now Modify Mantis. Edit mantis/lang/strings_english.txt and modify:
  $s_charset = "windows-1252";
  to be
  $s_charset = "UTF-8";

Happy coding!