Purchase a fake thumb at a magic store. Stuff the paper towel inside of the thumb and then put it on your own thumb. When you show the audience your hands, make sure your thumb is bent slightly so that they cannot see the false joint. Practice a couple of times in the mirror to make sure you are holding your hands correctly.
Place your false thumb in your other hand and make a fist around it. Pull the false thumb off for your hand and pull the paper towel out of your false thumb. Show the audience.
Take the paper towel and stuff it back into the false thumb (which should still be in your other hand's fist) and then replace your thumb on the false thumb. Bring your hands back to the position they were at first, slightly bent, so the audience cannot see your false thumb. Voila! You've made the paper towel both disappear and reappear.