We had a similar request to use dune sand for an embankment, this was our response. A lot if applicable to your situation. You are likely compacting in a narrow trench so you have good confinement. Desert sand should be fine. Compact it as if it were normal sand.
Compaction of aeolian sand - It is considered likely that the railway embankment core shall be constructed
using dune sand throughout DMC. This material has a single size grading curve which can cause issues when
compacting the layers. The material can also have a relatively flat OMC-MDD curve meaning that the
addition of water does not significantly improve the density achieved during compaction. The use of Gatch
(or similar) confinement bunds either side of the railway embankment should be considered by the Design
and Build Contractor. These bunds help to restrict the dune sand during compaction and a higher density can
be achieved. Once the embankment is completed, the bunds can be trimmed to leave in place a protection
"bank grade' layer to the slope. It is therefore recommended that the material used for the confinement
bunds meets the requirements of bank grade as per the Earthworks Specification.