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Before 1967, Sharm el-Sheikh was little more than an occasional base of operations for local fishermen; the nearest permanent settlement was in Nabk, north of Ras el-Nasrani ("The Tiran Straits").
Commercial development of the area began during the Israeli presence in the area. The Israelis built the town of Ofira overlooking Sharm el-Maya Bay, and the Nesima area, and opened the first tourist-oriented establishments in the area six kilometres north at Naama Bay.
These included a marina hotel on the southern side of the bay, a nature field school on the northern side, diving clubs, a now well-known promenade, and the Naama Bay Hotel.
After the Sinai was restored to Egypt in 1982, the Egyptian government embarked on an initiative to encourage continued development of the city. Foreign investors - some of whom had discovered the potential of the locality during the Israeli occupation - contributed to a spate of building projects.
Environmental zoning laws currently limit the height of buildings in Sharm el-Sheikh so as to avoid obscuring the natural beauty of the surroundings.
The city has played host to a number of important Middle Eastern peace conferences, including the September 4, 1999 agreement to restore Palestinian self-rule over the Gaza Strip. A second summit was held at Sharm on October 17, 2000 following the outbreak of the second Palestinian intifada, but it failed to end the violence. Another summit was held on August 3, 2005 in this city on developments in the Arab world such as the situation in Iraq and the Arab-Israeli conflict.
On July 23, 2005, the city was struck by the 2005 Sharm el-Sheikh attacks. In total, 88 people were killed, including foreign tourists. The attacks are believed to have been carried out by a militant Wahabbi group.
However, Sharm El Sheikh is still regarded as a safe haven, and the city of Peace.
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