President Hosni Mubarak said reports of a deal with Israel were exaggerated and denied that the Egyptian ambassador would soon return to Tel Aviv, a leading newspaper reported Friday. "There is nothing like that at all," the semiofficial Al-Ahram newspaper quoted Mubarak as saying in an answer to a question about the return of the ambassador. The ambassador was summoned home four years ago to protest what Egypt described as Israel's excessive use of force. News reports this week suggested a significant improvement in Egyptian-Israeli relations: a high-profile prisoner swap was considered by observers to be part of a bigger deal between Egypt and Israel that included the signing of a free trade agreement and the Egyptian role in controlling Gaza after the Israel's future withdrawal. But Mubarak, speaking in Bahrain Thursday at the end of a Gulf tour, said Egypt's actions had nothing to do with a deal with Israel.