Extreme heat and rapid urbanization are converging challenges for the Arabian Peninsula, yet their fine-grained interactions remain poorly understood. We present a high-resolution assessment of land-cover land-use change, population growth, and land surface temperature (LST) from 2000 to 2020. We found that newly urbanized areas converted from desert exhibited significantly lower warming (+1.78°C) than existing urban areas (+2.39°C) and unchanged desert (+2.97°C). However, these newly urbanized areas maintained higher mean LST than existing urban areas by 2020 (42.68°C versus 41.29°C), creating a counter intuitive thermal where 13.1 million new residents live in places that experienced relative cooling yet higher absolute LST exposure. We furthermore identified distinct population-thermal pathways: small Gulf states achieved population growth with minimal warming through densification, while larger countries showed sprawl-dominated patterns with varied thermal outcomes. Our findings demonstrate that desert cities experience fundamentally different thermal dynamics than temperate regions and require a revised adaptation framework accounting for urban cooling potential and extreme baseline temperatures.