Around the outside, you'll find words from Psalms 72:8
וְיֵרְדְּ, מִיָּם עַד-יָם; וּמִנָּהָר, עַד-אַפְסֵי-אָרֶץ
And may he reign from sea to sea, and from the river to the ends of the land.
The interior letters form a Magic Square and I would assume that the combinations of letters are names of G-d or some similar mystical words as they are not staright forward Hebrew words.
Thanks for the info, much appreciated.
Unfortunately my friend seems to have been offline for a while now so I can't find a larger image or the site from which it originated.