In 2003, a previously obscure comics artist, Craig Thompson, published a graphic memoir called Blankets, in which he told the story of his evangelical Christian childhood, his conflicting feelings about the faith of his parents and how he fell in love for the first time. The book was a sensation, winning him half-a-dozen awards and a fan letter from the Pulitzer prize-winning cartoonist Art Spiegelman, because it pushed at the boundaries of what people thought comics could do.

Thompson's subject matter, his skilful use of flashback, his graceful drawings and the staggering length of his book  it came in at nearly 600 pages  contributed to a feeling that Blankets was a substantial piece of work as well as a beautiful one. A star was born.

Habibi is another big book and I think its effect on readers will be just as powerful. It's not only that it has at its heart a sweet and touching love story, nor is it that Thompson's drawings are as fluid and as acute as ever. It's his ambition that really amazes, the sheer chutzpah of it.

Into Habibi, Thompson has merrily thrown stories from the Bible and the Qur'an, elements of the Arabian Nights and the poems of Rumi and Badr Shakir al-Sayyab, the great Iraqi writer. He has also, having clearly spent some time studying them, made magnificent use of Arabic calligraphy and Islamic geometry.

What he seems to be saying  sometimes gently and sometimes with an edge of satire  is that the various people of the Book were once nourished by the same stories (and, in some quarters, still are). It is, then, a book of bridges and connections and long-buried memories: a carefully researched edifice that often teeters but somehow never falls to the ground.

Wanatolia, where the story is set, is a strange, timeless place: as voracious when it comes to water as any Gulf state, but presided over by a sultan who seems to belong to a more dusty time (his harem is guarded by eunuchs). There is a desert, on one of whose dunes is mysteriously stranded a boat, and there is a river, full to the brim with plastic bottles and old tyres.

Our heroes are Dodola and Zam, child slaves bound to each other by chance rather than blood. Dodola is a brilliant storyteller; Zam is her loyal younger brother-cum-child, whose happiness is shattered when he discovers just how it is that she puts food on their table.

Thompson moves this pair through time and an epic landscape with expert precision. Terrible things happen and good things, too. They are separated and reunited and separated again.

It's a wonderful, compelling tale, but also, in the scant space I have here, an indescribable one. For, hidden inside it are a thousand other stories. It's like a fabulous jewellery box and you will want to raid it again and again.

There's an odd prejudice in the world of serious comics against lavish displays of skill. The neo-pre-Raphaelite craftsmanship of Barry Windsor-Smith and other fantasy mongers is all very well for superheroes and vampires (so goes the sneer), but God forbid we should admire, much less produce, that sort of kitsch. True graphic art is understated, unflashy, minimalist. Marian Satrapi's Persepolis, Joe Matt's Peepshow, Daniel Clowes's Ghost World  these are typical offerings for the discerning adult: cartoony simplifications that owe nothing to life drawing. Distillation is subtraction. Better to emulate Charles M Schulz than Daumier or Delacroix.

This pared-down aesthetic can lead to superb results, but sometimes I get tired of stories full of smart caricatures with not a line wasted. That's why I'm glad there are a few obsessive sketchers out there, such as Joe Sacco and Craig Thompson. Sacco's laborious cross-hatching is a form of documentary journalism: the stubble, knitwear and wrinkled features of war victims are scrupulously rendered to convince us we're seeing real people, not figments of Sacco's imagination. Craig Thompson, by contrast, is a novelist. His massive new book, Habibi, is an orgy of art for its own sake.

Thompson's epic tale  set in a timeless Middle East that fuses exotic legend with grim modernity  follows the fortunes of Dodola, an Arab girl sold into child marriage by her illiterate parents. Taught to read and write by her well-meaning husband, Dodola hones a love of numbers and narrative which helps her survive her subsequent adventures. "Adventures" is the operative word: Dodola is catapulted from one melodramatic trial to the next, including kidnap, whoring for desert nomads, breakneck escapes from a slave market and an execution squad (some of the most thrilling action sequences I've seen in comics for years), a spell in a sultan's harem, brutal torments in a dungeon, and so on. At heart, however, Habibi is a love story between Dodola and Zam, a black slave she adopts as an infant and to whom she is mother, sister and inamorata.

Visually, the book is a feast. It has the cinematic brio of Will Eisner, a feverish, symbolic vision reminiscent of David B's Epileptic, and a keen traveller's eye worthy of Sacco (who's thanked in the acknowledgments for having "guided this book to completion"). Huge Miltonic angels, fearsome djinn, boisterously crowded towns and rivers teeming with garbage are woven together in a grand tapestry of brushwork, interlaced with recurring motifs of vapour, blood, rain and the fluid morphings of Semitic script. Thompson clearly adores the beauty of Arabic calligraphy and is enthralled by the landscape and people of the Arab world. (His previous publication, a little-known stopgap between Habibi and 2003's Blankets, was Carnet de Voyage, an annotated sketchbook of his travels in Morocco.) Thompson has obviously devoted rather more than 1,001 nights to this project, punctiliously elaborating ornamental archways, tapestries and brocade. Images worthy of gallery display abound.

Ideologically, Habibi has several fervent agendas. Thompson, raised in the American heartlands where anti-Arab sentiment is endemic, uses this book to emphasise the shared heritage of Islam and Christianity. Biblical stories are gorgeously depicted in their Koranic versions. The book also serves as an anti-capitalist cri de coeur. Its contemporary reality is God-forsaken, ruled instead by supply and demand. Everything is a transaction. When Zam hawks water in a town choked by sewage, a dying man protests: "You can't sell water. It is from God." Zam points at the muck swilling around the man's shoes and retorts "THAT water is from God. If you want some that's drinkable, it comes from me." Later, Zam finds work at a water bottling plant, enriching multinationals while dispossessed villagers are literally "drowning in shit".

And yet, despite its visual splendours and sincere message, Habibi is ultimately wearisome. Part of the problem is its sheer length; conciseness has never been Thompson's forte. His debut, Goodbye, Chunky Rice, was conceived as a pamphlet but expanded to fill 120 pages. Blankets was supposed to be 250 pages but ended up at 580. Habibi's 672-page bulk may be justifiable aesthetically  Thompson's brush never falters and the images are good to the last drop  but the story keeps folding in on itself and there's a mounting sense of perseveration. Dodola must constantly re-learn the lesson that men have the power to buy, abuse, foul and destroy anything they want. By page 575, when a dam manager boasts "She was a slender river, but we plugged her up good!", my tolerance for sexualised pollution metaphors was strained.

Indeed, Thompson's handling of sex in general is problematic. He quotes Muhammad's concept of the Greater Jihad, "the struggle against oneself"  a struggle he understands perhaps too well. Zam, like the autobiographical hero of Blankets, is haunted by shame, his aspiration to be a purely spiritual creature undermined by lust. Early scenes where Zam's puberty spoils the innocent bathtime intimacy between him and Dodola are handled with wry affection, but later scenes of self-loathing, castration and post-traumatic angst, piled on top of Dodola's frequent relapses into sex slavery and starvation, raise the suspicion that the author is compelled to be crueller than his narrative demands. Habibi, which the eye perceives as a celebration of life force, settles in the mind as a campaign of punishment. Gaze upon its beauty and despair.

Michel Faber's The Fire Gospel is published by Canongate.