Djokovick will play Mikhail Youzhny, who defeated Jurgen Melzer 7-5, 7-6 (4) to reach the Dubai final for the second time in four years.
Djokovic started slowly and had 10 double-faults. After losing the first set in a tiebreaker, he had to save break points in his first three service games.
Story continues below ↓advertisement | your ad hereHe saved 13 out of 16 break points in all, and conceded no chances in the third set.
"What can I say? I lost the match that I had in my hands," Baghdatis said. "I'm really frustrated now. But it's not easy. I didn't take any of the opportunities I had. I was feeling good on court, moving well."
Seventh-seeded Youzhny achieved the only break in his semifinal against unseeded Melzer in the 11th game.
"It was a tough match. It was really close," Youzhny said. "I think Jurgen played really well today. He was aggressive."
Youzhny said improving the quality of his serve in the tiebreaker proved to be the difference.
"During the match it was so-so, but in the tiebreak, I served really good," he said.
© 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Ronaldo aims for double gloryDjokovic to face Baghdatis in Dubai semifinal