The Mediterranean basin lands have been heavily cultivated despite their extreme drought terms and land challenges (high erosion and lack of arable land). The need for beneficial agricultural utilization leads residents to implement creative solutions. The indigenous population that remains in these areas is the Bedouin. Until recent years the ancient agricultural ruins were subjected mainly to archaeological study, limiting data for current utilization, and no consideration was given to traditional Bedouin farming knowledge. Therefore, to maintain sustainable agricultural systems under global warming hydrological impacts, this study considers traditional Bedouin farming knowledge and practices. The study objectives are to determine the uses of ancient terrace systems and Bedouin farmers’ knowledge for sustainable agricultural utilization in arid lands today. The study is carried out on Wadi Shualim, located adjacent to Yerhoam municipality, Hanegev Highlands, Israel. The study indicates that the retaining walls of agricultural terraces, located parallel to wadi slope contours, increase soil moisture, organic matter content, and seedling emergence in the adjacent areas. In addition, the retaining walls increase soil stability and show a negative correlation between retaining wall width and the moisture content of the adjacent soil. The finding indicates that well-designed retaining walls may increase land stability and agricultural utilization. Manual construction of three retaining walls, based on previous findings integrated with knowledge of Bedouin farmers, found that the construction of more than 10 m of retaining wall of 0.5 × 0.5 m dimensions may take less than an hour and results in only minor damage to the landscape. This indicates reduced costs for retaining wall reclamation. Future work is aimed to analyze the influence of retaining walls on land stability and fertility of an incised area in the Rahma foothills. This study’s scheme may be used to rehabilitate many degraded arid lands in the Mediterranean basin.