The caged birds symbolize a central theme in the movie. Everybody in the film is trapped by something. The Sultan is trapped by a law requiring his daughter to marry a prince. Jasmine feels trapped in the Palace and by that same law. Aladdin is trapped by his social position, and later by pretending to be a Prince. The Genie is trapped in the lamp. Jafar feels trapped because he has to answer to the Sultan, who he thinks is an idiot.
from the Pop Up Fun Facts; a bonus feature on the Aladdin DVD