Arid regions experience climatic stress under climate change: increased drought frequency coupled with intensified storm events. This disruption and lack of precipitation patterns leads to water scarcity and hinders the achievement of sustainable development goals. Egypt drainage basin exhibiting the greatest suitability for the implementation of rainwater harvesting (RWH) strategies. To facilitate the development of sustainable water resource management practices in the region, this study uses a multi-criteria methodology to delineate optimal zones for RWH within the Wadi Safaga. Integration of radar and optical remote sensing data obtained from Sentinel-1&2, Landsat-8, ALOS/PALSAR, and Sentinel-1 Interferometric SAR with climatic Tropical Rainfall Measuring Mission (TRMM), hydrological, and geological datasets emphasizes the hydrologic characteristics of the catchments. Additionally, the analysis of rainfall intensity patterns within the basin was undertaken. Thirteen factors are used in the predicted model including elevation, slope, curvature, depression, lithology, radar, InSAR CCD, drainage density (Dd), distance to river (DR), vegetation, topographic wetness index (TWI), rainfall, and lineament density. A knowledge-driven Geographic Information System (GIS) methodology, including weighted factors based on the Analytical Hierarchy Process (AHP), was implemented to delineate plausible areas for RWH and groundwater potential zones (GWPZs). The resultant map categorized the basin into five GWPZ classes: very low (14%), low (28%), moderate (27%), high (21%), and very high (10%). Furthermore, the study identified optimal locations for constructing reservoirs to store harvested rainwater and provide protection for downstream mining, industrial, and tourism activities. In conclusion, the obtained information is crucial for planners and decision-makers to implement sustainable water resource management strategies within the Wadi Safaga basin.