Do as what the police wants you to do. Go back and settle it at the traffic dept by getting a poilce report and the rental company will take care of the damages together with the police report. Nothing to worry about. The police will help you in any way they could to settle the situation. Just a piece of advice, bring along with you a friend who understands and speaks arabic language so you can explain your side and have somebody to interpret the conversation for you. Running the situation without the police involved is a big NO in this country. Good luck! ;-)