You may do it using a Spin Tool. In right view add a single vertex and extrude it creating the arch's profile. In Object Mode press Shift+C to place the cursor in the center of a grid. In Edit Mode grab the profile and translate it along the Z axis. Press the Spin button in a tool shelf. Your arch is ready.
You can model a niche in the same way. After spinning it divide it using loopcuts (Ctrl+R). Then extrude single segments downwards as pictured below. You have a clean geometry to add creasing loopcuts for the Subsurf Modifier.
Finally join the meshes with Ctrl+J, remove doubles and give the object a Mirror Modifier.
Add some loopcuts (CTRL+R) (use mousewheel after entering loopcut move to increase the number of loopcuts) or subdivition on the faces, active propostional editing>connected and move the bottom edge (G) (and lock to an axis if prefered). Use the mousewheel to increase/decrease the effect radius while moving.
After that, you can add some bevel (CTRL+B) to the edge for the final curve (in this case, you would probably prefer to set Amount type to Width in bevel tool options as well).
PS: I would suggest using mirror modifier for such symmetrical projects: