In a desert, the sand becomes very hot during the day time and it rapidly heats the layer of air which is in its contact So density of air decreases. As a result the successive upward layers are denser than lower layers.
When a beam of light travelling from the top of a tree enters a rarer layer, it is refracted away from the normal. As a result at the surface of layers of air, each time the angle of incidence increases and ultimately a stage is reached, when the angle of incidence becomes greater than the critical angle between the two layers, the incident ray suffers total internal reflection.
So it appears as inverted image of the tree is formed and the same looks like a pool of water to the observer.
