Character mistake: Watch the extras playing the Cairo civilians walking around just before the big swordsman reveals himself to Indy. Several of them are just aimlessly walking back and forth as if they have no idea where to go.
Continuity mistake: Arnold holds a hot stick of metal to Marion's face in her bar, threatening her. In the opposite angle, the metal is nowhere to be seen when it should be right next to her face. Cut back to the other angle and we see it again.
Continuity mistake: The amount of dates change from shot to shot before they are poisoned.
Continuity mistake: At the market in Cairo just after one of the guys tries to kill Indy with a sword and misses, the shadow from the wall changes between shots.
Continuity mistake: When Indiana is fighting the bad guys at the market in Cairo, one of them kills another one with a sword instead of Indy - their position changes between shots.
Continuity mistake: Belloq grabs the idol from below its ear. When the angle changes he is holding it by the idol's temple.
Answer: The scene you describe was indeed filmed. It was cut out of the US release of the film although I cannot speak for the Australian version. The scene also appears in the Marvel Comics adaptation. http://www.theraider.net/films/raiders/deleted_scenes.php has a list of this and the other deleted scenes.
Phil C.