Historically the islands had a few villages who apparently made their living by extracting tolls from passing ships. I'm not sure how dense the population was in Antiquity (enough to have a Christian bishop along with a Jewish community) but apparently the islands were abandoned during a lot of history. Seems likely they simply don't have enough water to be viable for much more than a few villages.
It does seem like you could have a sizable resort city like Sharm el-Sheikh on the islands however. The completion of an Egypt-Saudi Arabia bridge would also bring development to the area. Possibly a total of maybe 100,000 people combined on both the islands?
Maybe if in the 1970s peace agreement, Egypt retook the Sinai peninsula but Israel kept those islands. Israel would undoubtedly develop them, not as a country but as a significant city.
I doubt it since Israel already has the port of Eilat right to the north which is precisely why the islands are strategic for Israel. I think they'd have military facilities and maybe a few fishing villages and tourist areas. It's too remote and surrounded by enemies to be much more to Israel since it would be easy to mine the area.