This is a religious practice, related to Islam, and not a specifically Arab tradition. While some say that veiling denigrates women, many women who dress this way say it liberates them. Some say it is more oppressive to be expected to dress in revealing ways. This practice of modesty, called hijab, is not universally observed by Muslim women and varies by region and class. Some governments have, at times, banned veiling and at other times required it. In American families, a mother, a daughter or a sister might decide to cover her head while the other does not. Most Arab Americans dress like other Americans.
REFERENCE: 100 Questions & Answers About Arab Americans