One of the men Brandon Kutz, told the pair were still in the custody of their captors Thursday, though they believe their release is imminent.

They are being treated "extremely well," Kutz said. Kutz contradicted the statement by Gen. Ahmed Fawzi, secretary for the governor of South Sinai, who earlier told CNN the two men were on their way to a hotel with Egyptian security forces. Fawzi had said a deal had been reached with the kidnappers.

Fawzi could not be immediately reached for comment Thursday evening. The U.S. State Department has not yet confirmed the release of the two men.

Gunmen kidnapped the two tourists Thursday morning. They had demanded the release of a man arrested a day earlier for drug possession, authorities said.

It is not clear if the man has been released as part of a deal to secure the two Americans' freedom.

The tourists, both 31, were in a car headed to a hotel from the town of Dahab when they were stopped, the state-run Ahram newspaper said.

The gunmen forced the tourists out of the car and took them away, demanding the release of a man named Eid Suleiman Etaiwy, the newspaper report said.

Etaiwy was arrested Wednesday with "a large amount of drugs" on him, the report said.

"We are working closely with Egyptian authorities to resolve this situation," Katherine Sweet, a spokeswoman for the U.S. Embassy in Cairo, said earlier Thursday.

"They are unharmed and the Bedouin are treating them well and are friendly to them," the message read.

Kidnappings and daylight armed robberies have become increasingly common in the turbulent year since Egypt's long-ruling dictator, Hosni Mubarak, was overthrown.