Accurate drought monitoring in topographically complex arid regions is critical for water security, especially in regions reliant on mountain water towers for agriculture and drinking water, but it is hindered by sparse rain gauge networks. While Satellite Precipitation Products (SPPs) offer a vital alternative, their comparative accuracy across the sharp topographic gradients from mountain water towers to arid basins remains a key knowledge gap. This study assesses four leading SPPs-IMERG-V07, PERSIANN-CDR, CHIRPS, and GSMaP-V8-in Isfahan, Iran, to provide a benchmark for their use in these complex environments. Validation is based on twenty years of data (2004-2023) from a dense 85-station network. The results showed IMERG-V07 and CHIRPS best captured local precipitation patterns. In contrast, PERSIANN-CDR exhibited a critical wet bias, overestimating precipitation by more than 14 mm/month during major drought periods, while GSMaP displayed a systematic dry bias. For drought monitoring with the standardized precipitation index (SPI), IMERG-V07 was clearly the most dependable, showing high correlation with ground data (r approximate to 0.98 for SPI-6) and reliably identifying drought events with few errors. These results offer a practical benchmark for SPP selection in similar landscapes and underscore that product-specific biases must be addressed to prevent misrepresenting hydrological risk.