Sorry for the confusion. I finally followed these steps and resized my
icon sizes on the desktop.

By the way, for the benefit of other newbies out there, I set the
default_zoom_level to "small" and this is how it was fixed. Soon after
icons are resized, I had to rearrange them by name so that they took
their rightful places.

Many thanks.
Khalid

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gconf-editor does not correctly resize icons
https://bugs.launchpad.net/bugs/304230
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