Rumsfeld arrived on Sunday in Algiers from Tunisia where he toured the North Africa American Cemetery and laid a wreath in honour of the 2841 US servicemen buried near the ancient city of Carthage on the Mediterranean coast.
Algeria was Rumsfeld's second stop on a three-day North Africa tour that will end on Monday in Morocco.
Rumsfeld is trying to encourage more co-operation to fight Islamic extremism.
After decades of chilly relations, the Algerians are seeking closer ties with Washington. US officials are encouraged by the prospect of closer co-operation with the Algerian military, which is the largest in North Africa.
Algeria in the 1990s battled an insurgency against the government that saw intense fighting and caused more than 100,000 deaths, many of them attributed to massacres of civilians by Islamic extremists.
Algeria fought an insurgency
from 1992 to 1998
The GSPC, the most structured group among Algerian Islamic insurgents battling the state since 1992, has in recent years turned its sights on jihad, or holy war, beyond Algerian borders.
Nabil Sahraoui, a GSPC leader who took over in 2003 before reportedly being killed by Algerian soldiers, declared the group's allegiance to al-Qaida.
On Saturday, in Tunisia, Rumsfeld and local leaders pledged to build closer military ties to help combat extremism.
"They have been attacked by terrorists in this country, they have felt the sting of that type of violence," Rumsfeld told reporters after meeting Zine El Abidine Ben Ali, the Tunisian president.
A written statement issued by a presidential spokesman said Ben Ali assured Rumsfeld that Tunisia was committed to fighting "all forms of terrorism and extremism".