Once inside the Arab grabs three pastries and swiftly stashes them in his pocket. He then looks at the Jew with a prideful smile and says "See how sly I am?"
The Jew, being determined to crush the Arab's pride, walks up to the baker and says "If you give me a pastry I will show you a magic trick." The baker's curiosity got the best of him and he agreed.
The Jew ate the pastry and then asked for another. The Jew ate the second one and asked for a third. After the Jew ate the third one the baker's patience began to run low. The baker asked "Okay, so where are the pastries?"
The Jew smiled and answered "Look in the Arabs back pocket."
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