The inscription is from a qasida by 'Abd al-Rahman al-Bur'i (d.1058 AD), a religious poem in Arabic on the Prophet Muhammad.
As in most Syrian interiors, the walls of this room would have originally been raised above the floor by 60 or 80cm. The lower wall would have been set with marble mosaic or other coloured stones. Although a strong European influence is clearly felt in these Syrian panelled rooms of the 1800s, the calligraphic verses along the walls as well as the mihrab give to the room a very particular atmosphere. The decoration of this room, rich and yet not exuberant, was probably that of a chamber of a haramlik, the private appartments of a house, where that of a salamlik, the reception section, would have been more heavily decorated.
For illustrations of a variety of comparable rooms, please see John Carswell, The Future of the Past, the Robert Mouawad Private Museum. (Beirut, 2004) and Brigid Keenan, Damascus, Hidden Treasures of the Old City, (London, 2000)