i think you will find that the valley of the kings is in luxor, and diving is in sharm...
there are a few well travelled egypt lovers here who will tell you more info...

closest coast to Luxor would be Safaga - this is still a developing area but there are some nice hotels around. More developed is Hurghada is about 4 hours drive to Luxor (you HAVE to go in a convoy which limits your time options unless you take internal flights) or a little bit further still, El gouna.
There are plenty of diving centres in Hurghada and El Gouna (I'd personally recommend Divetribe at the latter but there is a lot of choice) or you could consider a liveaboard?

Sharm to Luxor doesn't bear thinking about unless you fly as it would probably be eleven hours or more by road - it's easy to forget how big a country Egypt is. If you were thinking about pyramids, Egypt museum etc as opposed to the valley of the Kings, Karnak etc in Luxor, you are looking at an overnight train from Luxor, or 5 hours by road from Hurghada to Cairo.

Portland/Thomsons do some good 2 centre holidays with Luxor plus either El Gouna or Hurghada which might suit you ?

Thanks - it's given me a lot to think about...

Anthony Osude

Closer to Luxor than Safaga would be Al Quseir... and further south where the diving is even better... Marsa Alam.

You could combine Upper Egypt with Sinai ( as there are lots of sights to see as well as great diving ) simply by planning your schedule around the Luxor - Sharm el Sheikh air connections.