Other projects in the planning stages in the emirate include Burj Dubai - the world's tallest skyscraper which is expected to top out at more than 900 metres next year - and a permanent Cirque du Soleil, which will debut in 2011. The fabled QE2 ocean liner will be moored alongside Palm Jumeirah's 'trunk' and converted into a floating hotel.

Dubai is one of a federation of seven semi-independent states which make up the UAE, and while being flashy might be one of its most obvious attributes, there is a great deal more to this most fascinating part of the Middle East.

Founded in 1971, and enriched by copious oil reserves, the UAE has developed rapidly in the intervening decades, while maintaining its traditions, culture and history. Its two major airlines, Etihad and Emirates, fly frequently to Asia and its geographical location makes it a handy stop-off on the way to Europe and North America.

With oil reserves running out, the UAE is promoting its tourism infrastructure to maintain foreign currency earnings.

Besides the wealth of construction projects mushrooming all over the Emirates, there's no better example of the development over the past four decades than the changes in the field of sport. Traditional pastimes such as falconry and camel racing are still highly popular, but international events are now part and parcel of the UAE's annual sporting calendar. The Dubai World Cup, the world's richest horse race, is staged in March, and the Dubai Desert Classic and the Abu Dhabi Golf Championship are part of the European Tour. From next year, following an agreement with Formula One supremo Bernie Ecclestone, the capital Abu Dhabi will host a Formula One race for the next seven years on a specially designed 5.6km circuit on the man-made Yas Island that will include street and marina sections similar to the course in Monaco.

Andre Agassi, Roger Federer and other top-seeded players take part in the Dubai Duty Free Tennis Championships, and the large number of expatriate workers from the Indian subcontinent ensures that tickets for international Test matches at the Sharjah Cricket Association Stadium are sold out well in advance. The Dubai Sevens is part of the IRB World Series, but enthusiasm for rugby is eclipsed by soccer - still the Emirates' greatest spectator sport - and the UAE under-16 team qualified for the 2009 Youth World Cup which will be held in Nigeria.

Just because summer temperatures average 40 degrees Celsius, it doesn't mean that aficionados can't indulge in some winter sports. Dubai's indoor ski slope has five runs open year-round for skiing, boarding, and tobogganing, and general fun and games in the snow. And then there's the UAE's other major sport - shopping. While there are numerous air-conditioned malls crammed with designer labels, tempting eateries and top-of-the-line entertainment venues that make each shopping complex a destination in itself, it's in the traditional markets that the spirit of the Emirates is revealed.

The gold souks are perhaps the most charismatic of the UAE's marts, with mounds of glittering jewellery piled high in window displays, sold according to weight and the daily price, and ritually haggled over by discerning local shoppers who tend to go out on group sprees. That everything in the UAE is tax-free simply adds extra lustre to visitors' retail therapy.

Despite the veneer of modernity, strenuous efforts have been made to preserve the Emirates' history. In Abu Dhabi, the 1,600-square-metre Heritage Village is picturesquely sited on the Breakwater, and offers an intriguing glimpse of times past. The village traces the emirate's Bedouin history, from goat hair tents to traditional wind tower houses which were designed to funnel breezes inside to cool the occupants. Camels and Arabian horses are also on show, while craftsmen and women carry on their trades within sight of Abu Dhabi's futuristic skyline.

The large numbers of expatriates working in the UAE has helped turn the Emirates into something of a cosmopolitan gourmet destination. Besides Middle Eastern fare, the cuisines of the world are showcased in hotel restaurants and independent eateries, so diners can choose from sashimi or chateaubriand, browse an international buffet, tuck into a traditional British breakfast or gorge on jet-fresh seafood, and take their pick of cellars stocked with some of the world's finest wines, beers and spirits.

After hours, there's a huge range of distractions in the UAE's bars, clubs and discos, but one of the most interesting excursions takes place away from the cities. Although there's plenty of sporting entertainment in the UAE - such as windsurfing, diving and sailing, which are also available in other international destinations - wadi bashing (four-wheel-driving in a dry rocky riverbed) is the Emirates' home-grown adventure.

Desert safaris with expert drivers are also popular, as four-wheel-drive vehicles go over the sands, accelerating to the top of the dunes and then hurtle down the other side in a thrill-a-minute ride before arriving at a camp where guests can enjoy a barbecue, belly dancing, and relax under the stars, just as the Bedouins did when Dubai and Abu Dhabi were little more than minor fishing ports.