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That would be the Rub' al Khali desert on the Arabian Peninsula, which Nathan Drake will explore in search of a lost city known as "Iram of the Pillars." Naughty Dog says the word "deception" is in the title for a reason, as it'll be a major theme of the game, evidently even including some kind of deception about Drake's identity. The story will also focus on Drake's mother and father (hmm...kind of like how the upcoming film adaptation will focus on Drake's family?), as well as Victor "Sully" Sullivan.
As for the desert setting, creative director Amy Henning said it was chosen because of the development challenge it posed. "When we first came up with the idea of sand, you see everyone's eyes light up here and go, 'Yeah, that's going to be really hard -- let's do it!'" she said to EW. As for gameplay, EW's report mentions "enhanced backward climbing" and "the ability to fight multiple baddies at once," but doesn't give a lot of details of how these mechanics work. And lastly, Naughty Dog is putting a lot more time and energy into expanding the multiplayer in Uncharted 3, with co-president Evan Wells saying they "want to take on the big boys of the multi-player genre."