There are many fantastic elements within the Arabian Nights, including demons, genies, people transforming into animals and back, and magic.
The Story of Jullanar of the Sea demonstrates many elements of fantasy. Jullanar is from a sea kingdom and has the ability to breathe underwater. Her son is not born with this ability, but putting special kohl on his eyes allows him to do it.
Jullanar’s relatives are able to breathe fire when they are angry, and she can summon them by using a fire spell. Aside from Jullanar, Princess Jauhara can also perform magic. She turns Badr into a bird when he tries to force her hand in marriage. Queen Lab was also a sorceress known for turning young men into beasts after she was finished with them.
The magic and existence of sea people, along with other make-believe aspects of the story, work to create a fantastic and mythical setting and plot to add to the more realistic parts of the story.
Another important note to make is the reference to Solomon during scenes with magic and myth. Legend has it that King Solomon had power over animals, beasts, and genies, so invoking his name adds to the fantastic story.
The World of the Arabian Nights 