American Defense Secretary Leon Panetta discussed his meetings with Egyptian military figures Tuesday, pointing to discussions surrounding the security situation in the Sinai Peninsula and denying that he was negotiating a prisoner swap regarding an American prisoner accused of espionage on behalf of Israel. Rumors had circulated that Ilan Grapel, 27, would be freed in exchange for American authorities' release of Omar Abdel Rahman, an Egyptian imprisoned in North Carolina for his involvement in the 1993 World Trade Center bombings. “I heard the same rumors when I was visiting in Israel, but frankly I haven't done anything or was involved in any direct negotiations with regards to that issue,” Panetta said. “We have expressed our concerns about his treatment, and have urged that he ultimately be released. We raised that issue today, as a matter of fact, in discussions and we're confident that ultimately the Egyptian government will deal with that fairly.” Panetta, who was formerly the head of the CIA, commented about the current situation in Sinai, saying that he is concerned about the security situation there. “There are continuing concerns about the potential for attacks,” he said, pointing to American support for securing in the Sinai. “I strongly urged Field Marshal Tantawi, as well as others, to use everything possible to try to provide better security in Sinai.” Panetta said equipping the Egyptian military to combat shared threats was “firmly in America's interest.” “There's an obligation to maintain security in the Sinai area. Regarding mutual military relations, I indicated that obviously we have a strong relationship in the past and we want to continue that and if the feel the need for additional support in order to be able to do the job we would be happy to work with them in providing that.” Egyptian presidential candidates have called for the renegotiation of the Egyptian-Israeli peace treaty, which limits the amount of military forces allowed in the Eastern Sinai Peninsula. However, Panetta said that the military was committed to keeping the treaty, and was not aware of any requests to change it. “They all committed to doing everything possible to try to deal with threats. They are all confident that they would be able to check those who are threatening peace in that region,” he said, pointing to the importance of security in the peninsula. “That's an important issue, and any faction in that area could create real problems for the region. That's why it's important that they deal with it.” Regarding domestic politics, Panetta said he was confident that the Egyptian people would successfully transition to a democratic form of government, pitching the transition as a matter of regional security. “I expressed my desire for an orderly, peaceful, and legitimate transition to a democratic system of government,” he said. “It is extremely important for the stability of this region that Egypt be able to develop a strong democracy for the future and meet the aspirations of the Egyptian people.” Panetta also commented on means to meet those aspirations. “I did make the request that I thought it was important that they lift the emergency law,” Panetta said, commenting on the transition. “The response I got back is that they are seriously looking at the first opportunity to be able to do that.” “I said it was important to be able to lift it if you are going to seek free and fair elections in Egypt. They agreed with that, and my hope is that they will lift the [state of] emergency.”