Memorandum for the Secretary of State

Subject: Waiver of Restriction on Providing Funds to the Palestinian Authority By the authority vested in me as President by the Constitution and the laws of the United States of America, including section 650(b) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2008 (Division J, Public Law 110-161) (the “Act”), as carried forward under section 1417 of the Supplemental Appropriations Act, 2008 (Public Law 110-252) (the “Supplemental”), I hereby certify that it is important to the national security interests of the United States to waive the provisions of section 650(a) of the Act, as carried forward under the Supplemental, in order to provide funds appropriated for fiscal year 2009 under the heading Economic Support Funds to the Palestinian Authority.

You are directed to transmit this determination to the Congress, with a report pursuant to section 650(d) of the Act, as carried forward under the Supplemental, and to publish the determination in the Federal Register.

Secretary Condoleezza Rice delivered these remarks in Washington, DC

Secretary Rice. It is absolutely true that security is clearly very important for the Palestinian people, for the neighborhood that both Israelis and Palestinians can feel secure. But that is not going to happen also without a sense of economic development and the work that Jim has done with the Palestinian businesses, the work that he has done with the city government, and most importantly, the work that he's done with our great partner, Prime Minister Salam Fayyad, is really very much to be—very much appreciated.

As I had mentioned, we have with us today many Palestinian entrepreneurs and representatives of the Palestinian American Chamber of Commerce in Ramallah. As representatives of the Palestinian private sector, you are the real catalysts for Palestinian economic growth. The employment and economic opportunities that you offer will make a tangible difference in the lives of Palestinians and in their ongoing battle to end extremism among them. Your presence here today speaks to your faith in the future of peace between Israel and Palestinians and the willingness to invest in it. We promise to match your faith in that future and to do what we can to support your efforts to turn the wish and the hope into reality.

To the members of the U.S. business community who are participating today, I have no illusions about the challenges of doing business in the West Bank. But the Palestinian businessmen among you are your best resources to face and overcome those challenges as well as to share insight on future opportunities that exist. Both today's forum and the Palestinian Investment Conference held last May in Bethlehem demonstrate that there is a commitment to private sector development.

I want to tell you a story about that conference in Bethlehem because, of course, as Walter said, it was thought to be about 500 people; it ended up being three times that much. It shows something to the organizational skill of Prime Minister Fayyad's government that he was able to pull it off anyway with a thousand sudden guests, and to pull it off in a way that gave new hope to this very special city of Bethlehem.

I had visited Bethlehem not too long before that and I had seen the difficulties of the hotel that was empty, of really not very much economic life. But of course, even before that, there had been another Bethlehem. The Bethlehem just a few years ago, in which tanks had been in the streets and in which literally, a hole had been blown in the Church of the Nativity by mortar fire—now, to see, as I was told, a thousand people in Nativity Square in the open air having dinner just several years after that terrible scene of a hole in the Church of the Nativity speaks to what is possible when people give voice and give reality to hope. And that is what we are engaged in: giving voice and giving reality to hope.

Prime Minister Fayyad has worked hard to create an environment in which the private sector can be an engine for economic growth. He has erased millions in private debt and public salary arrears. He has instituted reform measures to improve the efficiency of government. And he continues to work to improve the business climate in the West Bank. As a result of those efforts, the Palestinian Authority is positioned to shift its resources to invest in the infrastructure necessary to support the continued expansion of the private sector and to grow the Palestinian economy of the future.

And it is more than that, ladies and gentlemen. I can tell you that when I go to international conferences now, the question on everyone's lips is how can we help the Palestinian Authority to do what it is going to do. No one questions anymore its will, its honesty, and its capability to do so. That too is a major change from just a few years ago. In recognition of that, the United States has been committed to supporting the Palestinian Authority and to ensure that these reforms can continue. The United States has provided almost $600 million in total assistance to the Palestinians during 2008, surpassing our pledge at the 2007 Paris donors conference.

As a sign of this ongoing commitment, I announced at last month's ad hoc liaison committee in New York that the United States has appropriated $150 million in budget support for the Palestinian Authority in fiscal year 2009. I have urged other members of the international community, particularly those in the region, to be as generous as the American people are being in supporting the Palestinians.

It is a sign, of course, of the support, but also the confidence that the United States Government has in the Palestinian people and in their government that much of that money has been in direct budget support, a new threshold for the United States. And I want to thank not just the members—not just the Administration for that and the support that I have gotten from my colleagues, but most especially from President Bush in doing so. But I want to thank the bipartisan consensus in Congress that has made this possible.

As we look to the future, it is important to recognize that this steady on-the-ground progress that is being made by Palestinians is only going to ultimately succeed if we can also create an economically viable Palestinian society, but eventually a Palestinian state. Since the Annapolis Conference in November 2007, the Israelis and the Palestinians have engaged in sustained, substantive negotiations to resolve the permanent status issues and implement a two state solution.

A year ago, this was not the case. And now there is a robust Palestinian-Israeli negotiating track that I am certain will give birth to the Palestinian state. The Israeli-Palestinian conflict would not have endured for 60 years if the obstacles to peace were not difficult ones. The solutions are, of course, not easy. But the framework for negotiating a final resolution of the conflict is before us: Determined, professional negotiations between the parties supported by consistent and constructive international engagement is taking place. And the United States is committed to supporting the Annapolis process and leading the international community's efforts to create the environment for sustained success. The parties also need to redouble their efforts.

The Palestinian Authority has to continue to dismantle the infrastructure of terrorism and to promote an atmosphere of tolerance. Again, I have heard Salam Fayyad say that the first infrastructure of terrorism that must be dismantled is in the people's minds, that the people must be willing to say that terrorism and extremism are simply not and will not be the future of the Palestinian people. And Prime Minster, you are a long way toward doing that.

Israel must also halt settlement activity, which can be seen as prejudging the outcome of negotiations and undermining its negotiating partner. And while there have been some lowered restrictions to access and movement, more progress needs to be made in order for Palestinian business people and workers to be able to conduct business in an environment in which they can thrive.

We are far done from our quest for peace and economic security in the West Bank and in Gaza. As you know, there are many challenges, yet it is evident by this great turnout that the private sector has a vital role in overcoming these challenges. Through investments in the Palestinian people, you are going to make sure that they see tangible improvements in their daily lives, and begin to really believe that there is a path to peace.

I want you to know that as the time draws nigh for the end of the year and, shortly after that—as a matter of fact, on January 20th at 12:01—the [end] of this Administration, I still believe that we must make every effort in the time that we have to lay this foundation for peace. And that still means that we must do everything that we can with the negotiating partners to get to the Annapolis solution. And that would be to find an agreement between these parties by the end of the year. It is very difficult. There is a hard road ahead. But if we do not try, we most certainly will not succeed.

And so I want to assure you, in closing, of one thing: As you think about your investment, as you think about the risk that you will take in an undoubtedly difficult situation to give the Palestinian people a chance of hope. Know, too, that until that moment when I leave office, I will leave no stone unturned to see if we can finally resolve this conflict between peoples. It will mean more than the two-state solution which, frankly, sounds a bit antiseptic. It will mean that Palestinians can finally live in dignity in their own state. It will mean that Israelis can finally live in security with a partner that is democratic and that accepts Israel as a neighbor and as a partner. It will mean that the region can finally overcome the many, many differences and the many, many conflicts that it has, to live as a region that should be building on the potential of its people, not going down to their worst fears. And it will mean that the international community could finally put behind it this seminal conflict and turn to a world that is certainly more hopeful, more peaceful, more democratic, and more secure. Thank you very much.

Secretary Condoleezza Rice was interviewed by Al Arabiya in Washington, DC

Q. How worried are you about this notion in the Middle East as well as here that America's adversaries are on the ascendancy—Iran, Hezbollah, Hamas, radical Islamists, armed groups—challenging the United States and its allies in the region?

Secretary Rice. I just don't see it. I think that what we have is that yes, the Middle East is seeing extremism exposed in ways that it was undercover preparing for September 11th, but now it's exposed and it's being fought across the region by all kinds of states and all kinds of people. You know, I saw an interesting poll the other day. Osama bin Ladin has just been dropping in terms of, quote, “popularity.” Why? Not because of what the United States says, but because decent, honest people in the Middle East, decent, honest Muslims, are saying that is not a message with which we resonate.

We're seeing al-Qaida defeated. Yes, they're still dangerous. But in Iraq, they are well on their way to defeat because Iraqis rose up against them. You are seeing that suicide bombing as a technique doesn't have legitimacy throughout the Middle East, and instead you see a Middle East that is looking to women's education and women's rights; a Middle East that is looking to technological change—cell phone usage is up, satellite TVs are up; and a Middle East that is increasingly linked to the outside world and determined to live in peace.

Q. Let's talk about Iran, the source of a major headache here in Washington. Iran is still on the path of trying to acquire nuclear capabilities for military application, notwithstanding UN resolution, notwithstanding unilateral American measures against it, notwithstanding a basket of incentives.

I mean, is it still possible to pursue a policy with real options with Iran during the few months of the Bush Administration and for the next president? I mean, what is the next president going to inherit when it comes to Iran?

Secretary Rice. Well, the next president will inherit an international coalition against Iran and against Iran's desire to have nuclear capabilities that could lead to a nuclear weapon. The six parties that work together have passed four Security Council resolutions. Iran's economy is having very deep difficulties, I think in part because of the increasing isolation of Iran. And Iran is getting a very strong message from the international community that it can have civil nuclear power, that there is another way for the Iranian people, but that it's not the path that its leadership is on. And frankly, it's touched off interesting debates even inside Iran about what Iran's future course should be.

Q. We are sitting in Bill Burns' office. I guess we invaded him—his office.

Secretary Rice. Yes.

Q. Why shouldn't we see his participation in multilateral talks with a senior Iranian official recently as indicating some sort of a shift towards a degree of or a measure of engagement? And is there a softening here of policy towards Iran, or just a recognition that we need to have an international framework to ratchet up pressure on it?

Secretary Rice. Well, the United States has been very consistent in its approach to Iran, and that consistency has been with our friends and allies to have two tracks: on the one hand, a track that can go to the Security Council and show Iran that there are costs for being unwilling to do what the international community demands; and on the other hand, there can be negotiations and a track toward better engagement with the world. And what Bill Burns did when he went to meet with his colleagues in the six parties was to simply go to receive the answer from Iran to the very generous package that had been put on the table. Now if Iran wants to have sustained engagement with the international community and with the United States, it's easy to do: Just suspend enrichment and reprocessing; we're ready to sit down and talk with Iran about anything at any time, at any place.

Q. But they keep saying no; and they keep enriching uranium.

Secretary Rice. They do, but they're doing it at an increasingly high cost to Iran, and we have to hope that there are, indeed, reasonable people who will see that this course of isolation is not good for Iran. And I do believe that there are now very extensive debates inside Iran about exactly this question, because the Iranian leaders, the Iranian regime, wants the Iranian people to believe that they can't have civil nuclear power, that they're being denied civil nuclear power. In fact, they can have civil nuclear cooperation through the IAEA as soon as they stop enriching and reprocessing material.

Q. Iranian officials have warned Iraqi officials publicly that they should not accept certain aspect of the agreements that are being discussed now between the United States and Iraq on the SOFA agreement and other agreements. And the Iranians have friends in Iraq and they have some influence. To what extent Iran's influence is being felt here in these sensitive negotiations that you are in charge of now with the Iraqis?

Secretary Rice. Well, the negotiations with the Iraqis are between the United States and Iraq. And Iraqi leaders are plenty capable of defending their own interests and standing up for their own interests. They have been determined that this new agreement, when we have an agreement, will defend—will protect Iraqi sovereignty. We agree. We have been determined to find an agreement that allows our forces to operate with a legal basis and, more importantly, a framework agreement that speaks to the broad relationship with Iraq that the United States will have over time.

Now Iran, of course, is an external power and it should act as an external power. I think you see that Iraqis are not really willing to allow Iran to control their future. Iraq is, first and foremost, an Arab state. It is a founding member of the Arab League. It is a state that has always had a voice within the Arab world, and that is a voice that is regaining within the Arab world, whether it is now the Arab League going to Iraq, the visit of the King of Jordan, the visit of Lebanese officials, the visit of the Crown Prince of the UAE. On and on and on, you have seen many, many, many different leaders go. Negotiations are underway for the establishment of a number of embassies, and a number of embassies have already been established. And so Iraq seems to me to be finding, absolutely finding its place in the Arab world, and that is not what Iran would have wanted.

Q. Yeah. Speaking of Arab diplomats from the Gulf, I heard some of them somewhat expressing a degree of maybe concern that a restructured Iraqi military force could, in the future, you know, cause them some alarm, given the previous experiences—

Secretary Rice. Yes, yes.

Q.—with the previous regime in Iran—in Iraq and then, because of that, the Iranian—what they perceive as a strong Iranian influence in Iraq. Do they have a basis for these concerns?

Secretary Rice. I don't think that there is a basis for that concern. I think Iraq will rebuild its armed forces. They are going to be independent. They are going to be strong. They, in fact, do have primary responsibility for security throughout much of the country now, and the time is coming when they're going to have complete responsibility for that security.

And that should be a good thing, but that same security force has demonstrated that it is willing to go after violent people, whatever their group, so that they went after the special groups of the Jaish al-Mahdi in the south, some of whom had been trained by Iranians. The security forces of Iraq are going to be under the control of a democratic Government of Iraq, not a dictator like Saddam Hussein who threatens his neighbors. And I think what you're going to see is an Iraq that can both be a bulwark against undue Iranian influence in the region, and a strong partner for the other states of the region in making sure that the Middle East is stable and that the Middle East can be a place where reform and change can take place over the next years.

Q. Quickly, are you still hopeful that an agreement will be signed with the Iraqis on the SOFA—on the strategic framework?

Secretary Rice. Yes. We are working through and I believe we will get there. We are very, very close and I think we will get there.

Q. Madame Secretary, what is the state of play with the Syrians now? You met with your counterpart, Walid Muallem, for ten minutes, I guess.

Secretary Rice. Yes.

Q. And then Ambassador Welch met with him. This was after the Syrians massed troops on the Lebanese borders. And I heard that Secretary Welch, in no uncertain terms, told them that the United States would never accept any-thing—Syrians exploiting the security situation, whether in Syria or in Lebanon, to intervene militarily in Lebanon. Was this message sent clearly?

Secretary Rice. The message has been sent clearly to the Syrians. First of all, we don't believe Lebanese will tolerate such a thing. And Syria is sending signals that it wants a different kind of relationship with Lebanon. It needs now to carry through with that different diplomatic relationship with Lebanon.

We did talk also with the Syrians about the fact that there is an indirect channel with the Israelis through the Turks and what hopes there might be for that. We talked as well about border controls between Syria and Lebanon that would stop the flow of arms. We talked about border controls between Iraq and Syria that would stop the flow of foreign fighters. It was a wide-ranging discussion. There have been some developments that are worth following up on, and that's what David has done.

But the fact is that Syria still needs to make clearer choices about where it stands, about a Middle East in which there is overwhelming commitment to a two-state solution, a Middle East in which there is overwhelming commitment to Lebanon's sovereignty, independence, well-being, free of foreign independence—interference; a commitment to an Iraq that is stable and democratic, without foreign interference, and fully anchored in the Arab world. These are the essential now agreements, understanding, commitments of most of the states in the Middle East, and Syria needs to be committed to the same thing.

Q. Speaking of the Turkish role and mediating between Israel and Syria, there's a view in Israel that one of the benefits of peace with Syria, not only ending the state of war, and peace, and all that—trade, but also peeling away Syria from Iran. Is this something that you share and is this something the United States should encourage, pursue, or maybe even reward?

Secretary Rice. Well, I believe that the problem is that Iran's agenda is overwhelmingly negative for the Middle East. In Lebanon, it's negative. In Iraq, it's negative. In the Palestinian Territories, it's negative. Why? Because it stops the Palestinian people, the Lebanese people, the Iraqi people from pursuing their dreams and aspirations for democracy, prosperity, and safety, and security. And those peoples deserve to have exactly that.

Now, to the degree that Syria is somehow associated with that negative agenda of Iran, it is playing a negative role in the Middle East. I would hope that the fact that there is a channel with the Israelis for a Syrian-Israeli peace—after all, we said at Annapolis, eventually the peace in the Middle East has to be comprehensive.

To the degree that Syria is serious about a correct, proper relationship with Lebanon rather than one that treats Lebanon like a client, to the degree that Syria is indeed serious about following up on the establishment of diplomatic relations with Iraq and stopping these terrorists from coming in, to the degree that Syria is no longer—or does not want to be associated with terrorism—by the way, with real implications for Syria—when you start seeing the bombings in Syria and extremism in Syria, maybe there's a self-interested reason that Syria ought to be on the side against extremism. So that would—we hope would be the policies that Syria would be prepared to follow.

Q. And I think you were asked once what would you like your legacy to be, and I think you talked about the transformation of, you know, policy in the Middle East, and you gave that major speech in Cairo. And yet, I don't know if I'll call them the cynics or the doubters or the critics, whether in the region or here, say that the United States, in the last couple of years, at least, did not stress that issue very much because they were concerned about the elections that brought Islamists to power, whether—you know, in a number of Arab states. And yet, you still see journalists—I mean, we always—we journalists talk about our colleagues as belonging to the same— one tribe being jailed, being harassed, being even killed throughout the Arab world and in the Middle East and in Iran. Are there areas where you see your hopes kind of dashed or disappointed in that particular issue?

Secretary Rice. I'm well aware that it takes time and that no one believes that democracy is going to be achieved in a couple of years. But I think that the Middle East has made progress in this. There are still many setbacks and disappointments. The progress—women voting in Kuwait. Iraq is an enormous step forward in this regard. Truly, the popular will is being exercised in Iraq, and it will be exercised even more when there are new provincial elections very soon. I think the popular will is being exercised in Lebanon. I know that people say, well, Hamas won an election. We recognized that election. But there's a certain responsibility that goes also with governing, which is to be in step with international norms, which is to be able to govern your people.

We have been overwhelmingly in favor of elections, because without them people cannot express their will. But we've also been a strong voice for places where this is not being carried forward. Where journalists have been jailed, we've spoken out for them. Where political opposition has not been allowed to express itself, we've spoken out about it. Where there have been elections that did not meet international standards, we've spoken out about them.

And I would say just one thing to reformers throughout the Middle East, and they are there. I hope that no one will ever again say that the Middle East is a place where people don't desire a democratic future, that somehow the Middle East is different, that it's an exception to the rule that human beings desire the dignity of being able to choose those who will govern them, to being able to say what they think, of being able to worship freely. I hope that those in the Middle East will stand up, as intellectuals did in the Arab Human Development Report, as nongovernmental organizations will be doing when the Forum for the Future meets this weekend in Abu Dhabi, that people— these young reformers do when they come to visit us here at the State Department.

I know that people have wanted that the change would come overnight. But in fact, changes are coming, and change is inevitable in the Middle East because people are going to demand it. And I know that the—whoever is the next president of the United States is going to stand for the fact that America's interests and values are inextricably linked and that America is always going to stand for those who desire freedom.

Secretary Condoleezza Rice was interviewed by BBC Arabic Television in Washington, DC

Q. There is a perception in the Middle East that says Iraq has now been destroyed, Afghanistan in a civil war, Israel-Palestinian conflict is still in limbo, Pakistan is on the edge of civil war, Usama bin Ladin is still at large, and the U.S. world economy is in chaos. Looking at this, how do you think the history will judge this period, first, whether you agree or disagree with that? And do you think that all happened because the Bush Administration following ideology instead of policy?

Secretary Rice. I believe the Middle East is a very different place today, but I think it's a different place for the better. I can give you a long list of changes in the Middle East: Saddam Hussein is no longer in power; and quite to the contrary, Iraq is not actually destroyed. Iraq is emerging as a multiethnic, multiconfessional, democratic state, whose security forces are increasingly able to carry out the security responsibilities of the country. It is a country that, under its new democratic leadership, is being fully reintegrated into the Arab world. And instead of Saddam Hussein, who threatened his neighbors, started two wars, sought weapons of mass destruction, and put 300,000 of his own people in mass graves, you have a leadership that is actually responsive to its people. So I think Iraq has now reached a different stage, where it's going to be a netplus for the Middle East. And you can see that in the many Arab leaders that are now going to Iraq, the Arab ambassadors that are there, the Arab League establishing itself there. Iraq has improved a great deal.

If you look at Lebanon, Syrian forces are out and you have an elected President in Lebanon. Syria has now established proper diplomatic relations with Lebanon.

If you look at the Palestinian-Israeli issue, when this Administration came to power, there was a raging intifada and the peace process had collapsed. You now have a peace process that is the most serious peace process that the Israelis and Palestinians have had in many, many years.

And if you look across the way at Afghanistan, yes, it's a difficult situation in Afghanistan, but it's a country that's no longer ruled by the Taliban. It is a country that faces challenges. But it is a country that is no longer the safe haven for terrorism that it was in 2001, which the attack against the United States took place from Afghanistan.

And I could go on and on: women voting in Kuwait, what a change; leaders throughout the region who are trying to find ways to have popular will expressed. No, I think, actually, the Middle East is a different place and a better place.

Q. So you are saying the contrary, and the democracy is being flourished, and you think the next administration should carry on those things you have just described as sexist?

Secretary Rice. Well—well, actually, I think that democracy is now finally in the vocabulary of the Middle East in a way that it had not been before. And you know, it's not going to be up to the next American president whether or not popular will is expressed in the Middle East. The reason that the next American president will carry through is because the people of the Middle East are demanding that their leaders listen to them. Civil society is growing. Women are demanding their appropriate place in the political and economic lives of the countries. And so that's why there will be a continuation of the democracy agenda, the freedom agenda in the Middle East.

Q. You have been a strong advocate for women empowerment and also opportunities in the people—especially in the Middle East and other areas. Now, with this financial crisis, how do you think this will impact the U.S. status in, you know, among those world in the future, especially in increasing economic power, countries such as China and Russia?

Secretary Rice. Well, you still have to look at the fact that the United States is, by far, the largest economic power in the world, more than 20 percent of the gross national product of the world, and that, frankly, isn't going to change because of the financial crisis. The financial crisis is a very serious one. And Secretary Paulson and the President and our Treasury people are working very hard to improve the possibility for the lifeblood of the financial system—that is, the flow of credit—to begin again. But while the U.S. economy has slowed, it is still an innovative economy, a creative economy, the economy in which still more than one in every 10 patents in the world are done in a very small area in California. This is a big and strong economy. And I doubt very seriously that it's going to be supplanted by any other economy in the world for a long, long time to come.

Q. We are going to this security arrangement or agreement that you are hoping to conclude between the United States and Iraq. And with the strong commitment that you are going to have on Afghanistan, many analysts in the Middle East, they are suggesting that you are not going to leave any maneuvering room, you know, for the next administration to have its say on Iraq and Afghanistan. What do you think about that?

Secretary Rice. Well, the next administration will because there will be a new president and that president can set the direction. But I think that we have to recognize that in—particularly in Iraq, the security situation has improved and it's improved by the joint efforts of coalition forces and Iraqi forces. The Iraqi people have a new opportunity to build a more stable, democratic foundation.

And the Iraqi leadership is negotiating with us for an agreement that would allow American forces to continue to operate on a legal basis in Iraq. Now, it is a difficult negotiation because the sovereign Iraq is insisting on its sovereignty—something that we believe is a good sign for Iraq. The United States is not seeking permanent bases in Iraq. We're not seeking a permanent presence in Iraq. We're seeking to work with the Iraqi Government to keep forces there until Iraqi forces can carry out their own security obligations. And that day is approaching more and more. And so yes, the next American president will have a lot of flexibility. What this agreement does is to give a legal basis for American forces to be there for the time that they are needed.

Q. Have you settled the issue of the immunity and—for the American contractors and military over there?

Secretary Rice. Well, for most classes of people, this is settled. In fact, I think we've come to an agreement that both recognizes Iraqi sovereignty and gives adequate protections to American forces operating there. But no one is going to question Iraqi sovereignty. I think this is a good agreement for both sides.

Q. Any idea about when this agreement might be concluded and be signed?

Secretary Rice. Well, it'll be concluded when it's concluded. It is working its way through the Iraqi process at this point. Iraqis have strong views. It's a good thing that they finally have an opportunity to express those strong views. They wouldn't have been expressing them had Saddam Hussein still been in power, I can assure you that.

And we're encouraged by the fact that this democratically elected Iraqi Government can represent the views of its people. But I believe we'll conclude it soon. We've concluded the text. It's a matter of now working this through the system.

Q. There is some opposition among the Iraqi parliament. There are people there against this agreement, and they suppose that Iran is involving in and influencing those parliament members not to ratify this agreement. Do you think there's enough support from Iraqis to ratify this agreement and conclude it?

Secretary Rice. Well, that is a matter for Iraqis to decide. But I can say this: Without coalition forces in Iraq, it's going to be a very hard road for Iraqis to secure themselves in the current circumstances. Their forces are good and getting better, but I don't believe that anyone believes that the Iraqi forces can both crush the remaining remnants of al-Qaida, deal with special groups like those that Iran trained, and protect Iraqi sovereignty until those forces are a little bit stronger. And so this agreement would allow American forces to remain, have a legal framework to remain. But you know, without a legal framework, American forces are not going to be able to remain.

Q. But without ratification from the Iraqi parliament, this agreement might not fly. Are you planning to twist some arms if it gets to that point?

Secretary Rice. Look, I think it's up to the Iraqi Government and the Iraqi parliament. But I would hope that the Iraqi Government and the Iraqi parliament are cognizant of and that their people are cognizant of the work that still remains to be done in Iraq. We've come a long way. Iraqi citizens are safer, but they are not yet safe.

Q. Let's move to Iran. The Democratic candidate, Senator Barack Obama, mentioned his willingness to talk to Iran if it's going to produce any result. Why your position was the opposite? Was your policy toward Iran based on ideological stand or political strategy, and can you explain?

Secretary Rice. Well, let's remember that the policy toward Iran is a policy not just of the United States but also of the European 3—Germany, Britain and France—and Russia and China, which is to say that there are two tracks. If Iran is willing to negotiate and to suspend its enrichment and reprocessing, and accept the very generous offer that the six have put on the table, including, by the way, an offer for civil nuclear power, then there's an open path to not just negotiation about the nuclear program but negotiation about anything that Iran wishes to talk about.

I hardly think that that's saying that we won't talk to Iran. We're perfectly ready to talk to Iran. But what we don't want to do is to give Iran cover to continue improving its nuclear programs that could lead to a nuclear weapon, which, by the way, no one in the international community wants to see Iran with a nuclear weapon. So my question has always been not why won't the United States talk to Tehran, why won't Tehran talk to the United States.

Q. But you haven't had a visit at a higher level, you know, in talking with Iran till now, only with strong conditions.

Secretary Rice. Well, those conditions are set by four Security Council resolutions, not just by the United States. But we're prepared to talk to Iran at anytime. But suspend the program, even for a while, and demonstrate that there is not a desire to have a nuclear weapon.

Q. And that will lead me to this following question about Israel, that a lot of Arab analysts say that you follow double-standard policy. Israel is believed to have nuclear weapon. It's not a member in the (inaudible). And Israel, the clear policy said that it will not be the first to introduce nuclear weapons in the Middle East. Now, what is your understanding to introduce? Do you understand that Israel is not the first use, or not to acquire or not to develop?

Secretary Rice. Look, I'll leave it to Israel to talk about Israeli security doctrine. But there is going to come a day when the Middle East does not even need to talk about nuclear-free zones, because it will be a region of peace. And that is what this Administration has been seeking. And in that regard, I don't think that you have had an administration that has been more actively seeking a Palestinian state, something the President declared to be in the interest not just of Palestinians and of Israelis, but in the interest of the United States as well.

And with that now growing consensus with the Arab states, with Israel, with Israelis of many different political stripes, with Palestinians, with the international community, that the only real option is a two-state solution, I think this President has moved the debate in the Middle East quite far forward and launched the most active and robust negotiations toward a two-state solution, perhaps that the region has ever seen.

Q. And we have one or two minutes left and we're going to go to a two-state solution. After Annapolis, there was high hope from you and from this Administration that something would be concluded by the end of this Administration, even could be something like the creation of the Palestinian state. Right now, three months before the Administration will go, is this process dead?

Secretary Rice. The process is very much alive. I think it speaks worlds that the day after Tzipi Livni was asked to form a government by the President of Israel, she sat down with Abu Ala. And indeed, these parties continue to negotiate. Now it is true that there has been a transition going on in Israeli politics and that undoubtedly has made things more complicated, but this is a Israeli leadership and a Israeli Government that is committed to the Annapolis process, a Palestinian leadership under President Mahmoud Abbas that is committed to a process of negotiations.

And I believe that they still have a chance to get to agreement by the end of the year. One thing is very clear. They have been in the most robust discussions. Of all the issues of final status, of all of the problems of getting to final status, this is the most robust negotiating process they've ever had. I don't think anyone's going to walk away from that. I don't think the parties are going to walk away from that. I don't think the Arabs are going to walk away from that. And that is a far cry from where the President found this problem, when the second intifada had been launched by Yasser Arafat, when Ariel Sharon had come to power in Israel not talking about peace but in talking about breaking the back of the intifada, and where for years there was no process of negotiation because neither side believed in a negotiated solution to the conflict. We are a long way from that now, and President Bush deserves a lot of credit for that.

Q. My time is up and this is going to be the last question for you. Still, you think—you are hoping that something might be concluded by the end of this year. And you must be having something that you would be proud of achieving during those eight years. What are the things that you are proud of achieving and what is the thing that you regret during this eight years?

Secretary Rice. Well, I'm actually very proud of Annapolis because I do think that it launched a very robust process between Israelis and the Palestinians, and not just the negotiations. But if you look at a place like Jenin, where the security forces of the Palestinians have taken over and where they're extending their presence throughout parts of the West Bank, I think that's in large part because of efforts that we've made.

I'm proud that we are—the United States—giving direct budget support to the Palestinian Authority for the first time. I'm very proud that Syrian forces are out of Lebanon and that Lebanese armed forces are throughout the country now, and that Lebanon has an elected president who can defend Lebanese sovereignty and Lebanese interests, and very pleased that the freedom agenda is actually the topic in the Middle East now, and that the people, particularly women, are finding their voice in Middle Eastern politics.

And perhaps most importantly, I'm really proud that Saddam Hussein is out of power and that he won't threaten his neighbors again the way that he did for decades, that he won't arbitrarily and cruelly execute his own people, that he won't seek weapons of mass destruction and that he won't drag the region into war, as he did in the past, and that the United States will have a good friend in a strong, proud Arab state like Iraq, fully and completely integrated into its Arab identity, able to defend Iraqi sovereignty from all of its neighbors.

Q. And what do you regret?

Secretary Rice. Well, I think we'll look back and there will be many things. I would hope that the Palestinian and Israelis take advantage of this opportunity. I'm sorry they don't have more—that we don't have more time. We'll do everything that we can to help them come to a solution before we leave. But I think we leave a good and broad process that others can pick up should it not conclude by the end of the year.

Secretary Condoleezza Rice delivered these remarks en route to Tel Aviv, Israel

Secretary Rice. All right. I'll just make a brief statement and take your questions since we'll be landing fairly soon.

I'm looking forward to this meeting, this set of meetings. The meetings in Israel and in the Palestinian Territories are in advance of a meeting of the Quartet which was requested by the parties to report on their progress in the negotiated track of Annapolis, that is, to talk about not the substance, which they continue to want to maintain confidentiality, but to talk with the international community about sustaining the process, about supporting it until a two-state solution can be reached.

And so the meeting that we're having in Sharm is that meeting. But I'm going to go in advance and my purpose here is to continue to work on the Annapolis process and all of its elements by going to Jenin to look at and, I hope, to underscore the progress that is being made on the ground in building the institutions of a future Palestinian state, particularly the security institutions where there's been significant progress, and then continuing to talk with the parties about how they might move forward on core issues.

I think it goes without saying that this is a period of political uncertainty in Israel. There are some political uncertainties also on the Palestinian side, although I think they will be resolved, and it is our expectation that the process, the Annapolis process, has laid groundwork which should make possible the conclusion of the Palestinian state, or the establishment of a Palestinian state when political circumstances permit. So with those comments, let me—

Q. When might those circumstances permit? You're talking about after the Israeli election or after—so it's done and the end of year goal is finished?

Secretary Rice. I've learned not to predict in this business, and I think that the Israeli Government remains committed— the caretaker government remains committed to the Annapolis goals. What's very important here, though, is to note that with the kind of international support that the Quartet meeting represents, the Arab support that is represented by, again, a meeting between the Quartet and the Arab follow-up committee, the progress along the track of Annapolis that was to build the institutions of a Palestinian state, and finally, the robust discussions that the parties are able to have on core issues. I think that whatever happens by the end of the year, you've got a firm foundation for quickly moving this forward to conclusion.

Q. But you seem to recognize that there won't be any agreement. Does it mean that you would be ready to offer a document or to prepare something, kind of frame—role—framework that the parties would use in the next—in the future?

Secretary Rice. I think the fact is that the parties have a framework themselves; not in the sense that some people talk about a framework agreement, but they have established mechanisms, they have established ways to deal with most of the core issues. They have established—we have established a way to help them deal with Roadmap obligations, a way to help them deal with the building of the Palestinian institutions on the ground.

And I think at some point, it will be important to wrap all of that work up one way or another because, you know, international politics is a continuous process. It doesn't stop with changes of American administrations. And I know that there is a solid—that a lot of solid groundwork has been laid here.

Now you say, is this the end of the process, or someone asked is it the end of the process for me. As I said, I've learned not to predict. And I expect to be continuing to work on this with the parties until the day that we leave. But the important thing is to make certain that there is a recognition of the substantial progress that they have made, a recognition of the commitment that these parties have made to concluding the work of Annapolis, and a solid international foundation of support for what they've tried to do and what they're going to continue to try to do.

Q. Just to ask the question in a very bald way: Both the parties, at very senior levels, have said an agreement is not possible this year. Do you concur?

Secretary Rice. I am going to—we'll continue to work on this until the day that we're done. Obviously, Israel is in the midst of elections, and that is a constraint on the ability of any government to conclude what is the core conflict, or core issue of conflict, for Israel and the Palestinians and has been for 40 years. But I think we can sustain momentum. I think we can sustain international support. I think they can continue to work, as the government has made clear they intend to do. And we'll see where they are at the end of the year.

But obviously, Israel is in the middle of an electoral period and that makes a difference. It is a different circumstance than had a coalition formed. So I think we have to recognize that. But the Annapolis process, which the President launched a little over a year ago, or not quite a year ago, I think has brought them closer to resolution of this conflict than they have been, maybe ever, and certainly in some time.

Q. One other on this. You said it was going to be important at some point to wrap all this together. How do you envisage that? Do you, for example, envisage some kind of a statement or public airing of where they are to try to memorialize what they have achieved?

Secretary Rice. I'm going to continue to respect two principles that have been very important to keeping this process vital. First of all, that there is confidentiality about the most serious issues, because they've been the—they've made very clear, and I think they're right about this, nothing is agreed until everything is agreed. And in some ways, partial agreements have the worst of both worlds. You end up creating vetoes when, in fact, when all of the issues are resolved, people can look at the tradeoffs. And so I think they're absolutely right to insist that nothing is agreed until all the things—every-thing is agreed, and therefore, they do not have to worry about the United States breaching the confidentiality of their negotiations.

Secondly, we're going to respect the principles—principle which has gotten us this far, that the United States is assisting the parties in their bilateral negotiations. And I think that when we get ready to put this all together, it will be possible to be clearer in how the United States has assisted. But I'm not going to—I don't think it helps anyone for us to move away from those two principles, because I think that's why they've gotten as far as they have.

Q. You mentioned—

Q. You said that they will keep the confidentiality with the Quartet also. I thought during the UNGA when the Quartet meeting—the Quartet issued this—its last statement, I thought they were supposed to inform the Quartet of the advancement of their progress.

Secretary Rice. They will inform the Quartet, but I'm quite certain that everybody understands that there are some elements that are very sensitive, and I'll leave it to the parties to determine how they're going to approach the meeting with the Quartet. But I think it will be a very important briefing for the Quartet, because I think it will help to sustain international support for the Annapolis process, and that's extremely important.

Q. You mentioned the follow-up committee, the Arab League follow-up committee. The Syrians are on that. Are you expecting to see the Syrians there?

Secretary Rice. I don't know which members of the Arab follow-up committee are coming this time. If the Syrians are there, of course I expect to say hello to my Syrian counterpart. But I don't know who—which members (inaudible). It varies sometimes, not—it's a huge follow-up committee, and they tended to only bring only a few members of it in—at one time.

Q. Right now, the Israeli Government not formed is a problem, obviously. Are you relieved that Tzipi Livni decided not to form a government with the Shas, which would have been a problem for the Jerusalem question? Instead of—she decided not to form it and to wait for February. Do you think it's a good sign?

Secretary Rice. Well, I'm not going to comment on internal Israeli politics or the decisions that Tzipi Livni made. I would note that the government has remained committed to the process; that she, as Foreign Minister, has remained committed to the process. And I would just state what is obvious: In order to create a Palestinian state, all issues are going to have to be resolved. And that includes—there will have to ultimately be a resolution of the issue of Jerusalem one way or another.

But I can't comment on and won't comment on her decision. That was her decision.

Q. What about internal U.S. politics after your statement from yesterday? Would you have preferred if McCain had won?

Secretary Rice. I told you I wasn't going to talk about politics before and I'm not going to talk about politics now. But I think it should have been obvious to you that I was very moved by what happened, and it's an inspiring moment for Americans. You know, I was asked by a friend a couple days before—we're both from Alabama, and she said, did you think you'd ever see it? And I said yes, but I thought I might be 80.

Q. You talked to—a moment ago about sort of stating the obvious. Why are you reluctant to just state the obvious, that the end of the year simply isn't possible?

Secretary Rice. Arshad, I said I don't— I've learned never to predict in this business. But it's clear that the—that we're in a different situation now because of— Israel is going to elections. And had we— had the Israeli Foreign Minister, Tzipi Livni, formed a coalition, and given that she was the chief negotiator, I think that would have meant certain things for the process in terms of perhaps even being able to move toward conclusion that probably now are very difficult.

But I believe that what we need to do is to continue to advance the process, continue its momentum, make certain that the progress that they've achieved doesn't go backwards, because I do think it's important for the parties to be able to represent to the international community, to the region, and indeed to their own people that they now have embarked on a process that they believe will lead to the end of this conflict. And when we set up Annapolis and launched these negotiations, what they said was they would make every effort to achieve an agreement by the end of the year. But this is a conflict of—

Q. (Off-mike.)

Secretary Rice. Count it, however many years you want to count it. If you want to count it at 3,000, you can. But I think you can at least use the number 40, and given that, the important thing is to get the fundamentals right. And one of the reasons that we're going to Jenin is that an underreported and undervalued element of this process is the creation of the institutions of a future Palestinian state.

I remember early on, we talked about this, that the reason that this is one of the pillars of Annapolis is that you can't imagine the emergence of an agreement without the institutions of statehood on the other side. And I think you will see that with the work that Keith Dayton has done, that General Jones has done, that Tony Blair has done, but most importantly, that Salam Fayyad has done, that those institutions of the Palestinian state, particularly the security institutions, are well on their way to being able to support and sustain a democratic Palestinian state. And that, perhaps more important than anything, will make it possible to conclude this agreement. Okay. Thank you.

Secretary Condoleezza Rice and Israeli Foreign Minister Tzipi Livni delivered these remarks in Tel Aviv, Israel

Foreign Minister Livni. Hello. I would like to welcome my friend and colleague, Secretary Rice, in the region once again. You come at a time when the election process in the United States has ended, while here it is just beginning.

Let me first express my personal admiration and congratulations for the wonderful example of a democratic process that the elections in the United States represent. This is a source of inspiration to millions around the world. I would of course like to congratulate President-elect Barack Obama on his historic victory, a man who has impressed Israelis during his visits here and throughout the campaign by what he represents. I would like also to express our appreciation to Senator John McCain for his leadership and his longstanding friendship, which we never take for granted.

Israel and the United States have a unique strategic relationship which enjoys bipartisan support and is based on common interest, but more importantly on shared values. We look forward to working with the new U.S. administration when it comes into office in order to enhance the unique and unshakable U.S.-Israel partnership, a partnership which has truly been strengthened in the last eight years under the leadership and vision of President Bush, which is based on deep and uncompromising values. His contribution will never be forgotten.

Israel and the United States have a unique strategic relationship which enjoys bipartisan support and is based on common interest, but more importantly on shared values.

Secretary Rice and I will discuss today regional issues, including Iran and the Israeli-Palestinian track. We remain committed to the Annapolis process and to the solution of two states for two peoples. I know that there are doubts about this process. I think we need to remember that Annapolis came after seven years of intifada and terror, and after Hamas took control in Gaza. It created, after years, a framework of continuing dialogue and developing basis—and developed basic trust between the parties. It is important that we preserve the process within the structure that we have created. We are realistic enough to recognize the reality we face, but we are also determined enough to change it.

I believe deeply that stagnation is not in Israel's interest, and it cannot be our policy. The Israeli people do not need slogans; they need solutions. And any solution must provide an answer to Israel's interest: first and foremost, security and Annapolis and the process, preserve it.

We are committed to negotiations with the Palestinians not as a favor to anyone, but in order to ensure a peaceful and secure future for Israel and for the Israelis. We also expect the continued process to be made on the ground to ensure that we have a peaceful and responsible neighbor, rather than a terror state or a failed state on our borders.

The comprehensive approach of the Annapolis process, which combines negotiations with steps on the ground and a firm stand against extremism, has made the recent progress we have seen on the ground possible; to take one example, such—a place such as Jenin that was once the capitol of terror and is now a source of hope.

Finally, I want to make clear that we can never compromise on confronting terrorism and extremism, whether it be from Iran, Hamas, or Hezbollah, so that we guarantee that the moderates and not the extremists of this region dictate the agenda.

I am looking forward to the opportunity next week to brief the Quartet together with our Palestinian partners. While the negotiations themselves are bilateral and confidential, the unique quartet meeting will be an opportunity for the parties to express their commitment to negotiations and the Annapolis process, to share their assessments of the serious of this talk and the challenges ahead, and to maintain and enhance international support for the process in accordance with the guiding principles that the parties themselves have agreed between them. Thank you.

Secretary Rice. Well, thank you very much, Tzipi, for welcoming here to the region. Let me welcome you also to the residence of our Ambassador here. I look forward to our discussions, but I first want to thank you for the very kind and moving words that you've just expressed about the American elections, because this is something that Americans feel very deeply.

I think that what we saw yesterday—or is it the day before now—on Tuesday, November 4th is evidence that democracy is not something that is born and then you're done with it. It is something that you have to continue to work, you have to continue to perfect. You build it brick-by-brick, day-by-day, but it is a process in which human dignity can overcome old wounds and old differences. And particularly as an African American, as I've said, it was an historic day, but it shows why democracy, a value that Israel and the United States share, is really only the answer—the only answer for human beings worldwide. And I know that that is something that we deeply believe, the two of us.

We will have a discussion of the negotiations between you and the Palestinians, as well as regional issues. I just want to note that the Annapolis conference launched the first serious negotiating between Israel and the Palestinians in nearly a decade. Over the last year, the parties have really bravely demonstrated their commitment to substantive negotiations in an effort to reach a comprehensive peace covering all of the core issues. I want to thank you for your leadership as the chief negotiator for Israel and as Foreign Minister, and to assure you that the United States will continue to support and facilitate the efforts of the parties to reach a lasting peace.

We have a national interest—the United States has a national interest in sustaining that progress. We believe that it is essential for the security of Israel, to which the United States is deeply committed.

President Bush's vision of a Palestinian state at peace with Israel doesn't come and will not come in a single, dramatic moment, but as the result of methodical, sustained, sincere initiative to conclude a final agreement that benefits both Israelis and Palestinians. And such an initiative is now underway with the Annapolis process, and it should be carried forward.

It is critical that we continue to advance the pillars established at the Annapolis conference, and those pillars were bilateral negotiations, improvements in the situation on the ground, and institution building for the future Palestinian state, as well as marshaling international and especially regional support for the process.

We will have an unprecedented meeting of the Quartet in a few days to hear directly from Israeli and Palestinian participants in the negotiations. The Quartet expects to hear about the parties' commitment to the Annapolis process, their views on the progress that has been made on the key pillars, and their desire for international support in continuing their efforts.

We expect that the parties will reaffirm their commitment to a two-state solution, to negotiations toward that goal, and to a process that builds on the important progress that has been achieved in previous agreements and understandings.

Let me just close by saying that the Israeli-Palestinian conflict is one that should be resolved and should be ended because it will be so important to Palestinians to live in their own state and for Israel to live alongside a democratic neighbor who can help to secure the peace.

The United States is fully committed to that goal, and I remain committed to that goal until the day that we leave office. But I want to say that I am very grateful that in the last almost eight years now we have been able to move a situation which, at the time when President Bush came to office, was the second intifada, with hundreds of Israelis under siege, with Palestinians dying in large numbers, a situation in which the thought of peace between Israelis and Palestinians was one that was quite distant with the undeniably important, but ultimately unsuccessful, attempt to reach peace at Camp David.

President Bush has been devoted since then to bringing about a two-state solution on the right basis, through strong support for Israel's security, for a belief that no Palestinian state could ever be born of terror, for a belief that democratic institutions would be important to the future of the Palestinian people, as they would be important to the future of the Israeli people, and a belief that the Arab neighbors would need to come to terms, finally, with Israel's permanent existence in this neighborhood, and with an international community that would support efforts by the parties themselves to finally resolve their conflict. And I believe that those principles remain the basis and the foundation on which this conflict will finally end.

Q. Madame Secretary, do you think that your service as Secretary of State, one of the highest jobs in the United States, as Secretary Powell's job, was one of the elements that led to a change of hearts in the American people and led to the election of Barack Obama as the first African American president? And what you will recommend him to do? You know that he is for engagement. Will you recommend him to engage on the Syrian track or to neglect it totally, ignore it, as you did?

And if I can ask a question for our Foreign Minister, Foreign Minister Livni, what you will recommend Madame Secretary to do until the practical change of governments, and what do you think—

Foreign Minister Livni. (Inaudible) advice.

Q. What do you think in that regard about the idea of American interests section in Iran?

Secretary Rice. Let me just say that I will give my advice and assessment to my successor when that person is named, and I'll do so privately, and then I will happily return to California and comment no further on the matter.

It's in the great American tradition that when there is an election and when a new president is installed and inaugurated, it then becomes the—that government that is responsible for American foreign policy. But there are some perennials, some constants in American foreign policy, and the friendship for Israel is a constant. It has been since Harry Truman recognized the state of Israel in 1948, and I don't think that that's going to change.

As to the question about the road that paved the way for President-elect Obama, he was an extraordinary candidate, he is an inspirational leader, and I think that that is the first thing to say. I do think that America has been on a long journey to overcome what I have personally called its birth defect of slavery, a birth defect that was not fully overcome, because when I was a child in Birmingham, Alabama there were still laws that kept the races separate. And it's been a journey. It's been a journey of the civil rights movement, of great civil rights leaders. I think of Colin Powell as the first black Chairman of the Joint Chiefs of Staff, which I think was a landmark for the United States. I think it was a landmark to have then the Secretary of State and National Security Advisor both be black at the same time, and then back-to-back black Secretaries of State. So I think there has been a process of overcoming this, but let's not take anything away from the enormous leap that Tuesday, November 4th was, from whatever basis we were on November 3rd.

Foreign Minister Livni. Thanks. Well, it's not for me to advise Secretary Rice, even though you said that you are going to be devoted to the process until the last day in the office. I'm sure that you are going to be devoted even later because this is something that need to be to understand. In the last eight years, in different positions of—for both of us, I discovered that in our talks that Secretary Rice really is devoted to make a change in the region, in an understanding that peace and security is not only an American interest, but this is an Israeli interest and a Palestinian interest as well. And during these years, Secretary Rice will meet with others, try to see what are the gaps, where we stand, what are the interest of the parties, what are the interest of Israel, what are the concerns of Israel, in terms of security, in terms of the fear and maybe the need to create a state that—which is not a terror state.

So there's a need to fight terrorism on the other side of the future borders within the Palestinian Authority. And this comes from a determination and understanding and something that I believe goes beyond the duty. And it is something that—and this is the reason why I believe that I'm sure that it's not part of the job, but this is something that's part of you as a person.

And this is part of the determination and this is part of our determination because of the interest of the state of Israel, not as a favor to anyone; as I said, not even to the United States of America, but because this is something that the Israelis deserve to live in peace and security. And I do believe that the continuousness of the process is crucial for us Israelis, for the Palestinians as well. And I do believe that in doing it in the right way, we can have the to support of the international community.

So the idea is to continue the process in a manner in which we decided between us before, Israelis and Palestinians, in accordance. And it was agreed also by the United States of America and others. It is bilateral. We need to continue it. We need to find the way to continue it regardless to the question of timelines or timetables or changes of administration in the United States of America. This is crucial for both sides to understand that this is what we need to address. And I'm sure that during the next few months, this is what we are going to continue to do.

And I know that Secretary Rice, as other leaders within the international community, know where Israel stands. And when Israel sent a message, and not only a message, a oral message, but something that is being done during this process, saying that a process is part of our interest, we want to continue this process as long as it preserve our own interest, especially when it comes to security. The world can support this process without pressuring Israel to do something which is against its interest. And I believe that this is a change that Israel during the last eight years, have done within the international community, because there was—there was sometimes old perceptions and images of Israel. And I think that now, it is clear to the international community that Israel is serious, that stagnation is not our policy, and we are determined to continue the peace process as long as it preserve our needs and interest.

When it comes to other topics on the agenda, this Administration—I was talking about President Bush and also Secretary Rice—represent the understanding that we need to fight extremism. Iran is an example of a state that represent this kind of extreme ideology. We need to continue the pressure on Iran. And I believe that the idea of continuing the pressure comes with more intense and effective sanctions on the Iranian—and I think that this gives an answer to your second question as well.

Q. I'm sorry. You spoke earlier about how you wanted to lay a firm foundation of solid groundwork for the next administrations, both the United States and Israel. Well, what exactly do you mean by that? Are you talking about a document that goes beyond just a simple reaffirmation of the Annapolis goals? Are you looking for something more where the parties will say exactly how far they've gotten and that that will be a starting point? I think the question is: What are you hoping to present to the Obama Administration as: Here's where you can begin?

Secretary Rice. Look, I am not going to try to judge what the parties will want to do during this process and as it unfolds. As I understand it, they are going to— before the Quartet and I'm sure throughout the—this next several months—affirm that the Annapolis process and the framework that it establishes is indeed the basis on which they believe they can come to a resolution of their conflict regardless of timetable, regardless of anyone's timetable. And I think what's extremely important in this is there's a lot of focus on the political negotiations. And that is rightly so, because one has to have an answer to the core issues in order to establish a Palestinian state. That is quite clear. And I have been impressed at the seriousness of the parties in discussing how a Palestinian state might come into being.

But it is also the case that the pillars of the creation of reliable Palestinian institutions that can deliver for the Palestinian people and can be a stabilizing factor in this region when a Palestinian State is born, that that is an extremely important pillar. And to my knowledge, this is really the first time that a peace process has tried to build from both the ground up and from the top down. And I believe that that is one of the other elements that Annapolis brings.

And there has not been very much attention to the hard work that the Palestinians, under Prime Minister Salam Fayyad, has been doing to build those institutions of the future Palestinian state. And so that's another piece that I think has to be passed on. It is also the case that there are Roadmap obligations that the parties undertook some time ago. And the Annapolis process envisions that an agreement is really not going to be feasible unless those Roadmap obligations are met, and that's when we talked about it being subject to Roadmap obligations. That's another piece of this process. And finally, that there needed to be a framework of international and regional support for the parties to conclude. So I don't want to try to prejudge how this might all be, in a sense, passed on.

But I do want to emphasize again that in 2001, when President Bush came into office, we had a raging intifada, we had Israel under siege. There were still people who talked about, well, there are freedom fighters and then there are terrorists. The President laid that aside for all time. When we came into office, I do not think that you had the breadth of opinion in Israel in support of the two-state solution.

I would cite, for instance, Prime Minister Sharon's Herzylia speech which established new ground.

And so a lot has happened to change the environment. There is a very serious negotiation going on. I know that because I've sat with the parties. There is other serious work going on. How we express that and turn it over to those who will have to—in any case, even when an agreement is signed, there will be a lot of work to do to implement it and to make sure that it works. And so how we do that, I think, is still an open question. But I am so confident that the Annapolis process that was launched, now less than a year ago, is an extraordinary breakthrough in the history of this conflict.

Secretary Condoleezza Rice and President Mahmoud Abbas delivered these remarks in Ramallah

President Abbas. In the name of God, the merciful and the compassionate, once again I welcome Dr. Rice, who visits us today. This visit and the previous visits have expressed extensive and brilliant diplomatic—American diplomatic efforts towards the Middle East. And here it is important to thank President Bush, who had laid the foundations for such diplomatic efforts at Annapolis conference, and in his vision for a two-state solution and for his perseverance and his extensive follow-up throughout last year in order to lay the foundations for the peace process. And therefore, I would like to say we did not waste time, but we have benefited from every minute and every effort of the last year. And important and crucial foundations were laid down that will allow us to start again with a new administration, and also the American and the Israeli in order to conclude a peace agreement. I have reconfirmed and reiterated to Dr.

Rice, this time, that we are committed to a comprehensive peace with the Israeli side, in the sense that we want to reach a full comprehensive solution without looking for partial agreements or transitional agreements or postponement of any of the core issues that are well-known to everyone.

We have also asked that the tripartite commission will continue regarding the first article of the Roadmap, which is overseen and led by the U.S. And this mechanism that would allow the implementation and full implementation of the first article of the Roadmap.

We have also discussed, among others, about the issue of settlements and the continuation of settlement activities, about the roadblocks, about the incursions, as well as the issue of prisoners that we have always demanded that our Palestinian prisoners are released, those who are exiled to come back, and also the Jerusalem institutions that need to be reopened, and that we will be following up with the Israeli administration and American administration.

In recent days, there was an escalation, a dangerous escalation, in terms of the attacks by settlers against farmers, particularly during the olive harvest season. This was very inhuman and it was uncivilized actions by the settlers against these farmers and, unfortunately, sometimes in the presence of the Israeli army. And therefore, we have drawn the attention to these escalations and these dangerous escalations, in my view.

I have also spoken with Dr. Rice about the Palestinian dialogue, which will start—will be launched on the 10th of this month in Cairo. This dialogue that is being sponsored by Egypt and that is exerting all efforts in order to achieve the Palestinian reconciliation.

I have also stressed that we want to form a government, a Palestinian government, that is, that is independent, that is committed with the obligations of the PLO, the full commitments of the PLO. This government will run the affairs of the country and will also work to prepare for elections, legislative and presidential, that will take place simultaneously according to the elections law, the Palestinian elections law that talks about proportional basis.

Of course, no doubt, we will always need assistance, financial aid and humanitarian assistance because our people have no resources and, therefore, we need to see the continuation of the assistance and aid in all aspects, whether humanitarian or others. And in this context, we would like to reiterate the importance of some continued support to Gaza Strip and that all basic materials are accessible to people in Gaza Strip. And from our side, as you all know, we are paying the salaries of 77,000 employees in Gaza, in addition to 58 percent of the Palestinian budget that is allocated to Gaza Strip.

During this period we will continue our meetings with the Israeli side and with Prime Minister Olmert, and this is a natural thing. Until the elections—the Israeli elections take place, we will not waste time and we will not waste this opportunity, but we will continue to discuss all issues, including the day-to-day issues as well as issues of final status and negotiations. And the negotiation teams will continue to work as usual because they should continue their efforts, because all of this will help until we reach the final status negotiation.

And of course, I also informed Dr. Rice our thanks and gratitude for the financial assistance, alongside the political assistance, the financial assistance that American administration is also providing to the Palestinian people, and particularly the latest payments that were endorsed by the Congress.

On this occasion, we also wish to convey our congratulations to the American people for the democratic elections that took place. And these were—it was a long election campaign and were difficult elections, but they did take place at the end. And Mr. Barack Obama was elected as President of the U.S., and we convey our congratulations to him for his success in these elections, and thank you.

Secretary Rice. Thank you very much, Mr. President. And thank you for welcoming me here. Let me begin by saying that the American people appreciate the kind words that you have said about our own democracy. And we especially appreciate it because we know how hard you are working to build a truly democratic Palestinian state. You are someone who is yourself devoted to democracy, and I just want to take note of that.

When President Bush came into office in 2001, and it was a very difficult situation between Palestinians and Israelis, indeed the intifada was raging, large-scale Israeli military operations were taking place, many, many innocent Palestinians and Israelis were losing their lives. And I think that the idea of a two-state solution or an independent Palestine was a somewhat distant dream given that negotiations had collapsed at Camp David.

Some number of years later, we stand here as the Annapolis conference has launched the first serious negotiations between the two sides in nearly a decade. And the distance to that peace has been narrowed, although the peace has not yet been achieved. Over the last years—the last year, in particular, the parties have bravely demonstrated their commitment to substantive negotiations in an effort to reach a comprehensive peace which will cover all core issues. And I think that President Bush's vision of a state of Palestine, an independent state of Palestine at peace with Israel, while it will not come in a single, dramatic moment, it will come because the commitment of the Palestinian and the Israeli people to their peace will not waiver. And if there is methodical and sustained and sincere initiative to include a final agreement, I know that you will.

It's critical that in moving forward on the peace process we remember that other pillars were established at Annapolis as well, and those pillars cannot be separated; indeed, the work that is being done on the ground to improve the lives of the Palestinian people, the work that is being done to build the democratic institutions of a Palestinian state, the work that has been done to reform security services and to really improve their capability and to have them be professional security forces. I'm very much looking forward to going to Jenin because I think it is an example of this relationship between security provided by Palestinian forces for the Palestinian people, the willingness to fight extremists, as well as the ability to begin to deliver the economic and social benefits of a calm environment. I really hope, Mr. President, that in the days to come, there will be attention to what you have done and what your Prime Minister, Salam Fayyad, has done to improve the lives of the Palestinian people. And I want to take note of the fact that you have also not forgotten the people of Gaza. Despite the illegal activities of Hamas there, you have continued to act on their behalf and to their benefit.

We are going to have an unprecedented meeting of the Quartet in a few days to hear directly from Israeli and Palestinian participants in the negotiation. The Quartet expects to hear about the party's commitment to the Annapolis process, their views on the progress that has been made on the key pillars and their desire for international support for continued efforts. We expect that the parties will reaffirm their commitment to the two-state solution, to negotiations toward that goal, and to a process that builds on the important progress that has already been achieved. We also expect that the parties will strictly hold to their commitments under the Roadmap.

And Mr. President, you can be assured that I will pass on to our successors your request for maintenance of the monitoring mechanism and a U.S. role as the lead in that mechanism. I think that it has done important work. General Silva is here today and continues his work in that regard.

I also want to note that settlement activity, both actions and announcements, is damaging for the atmosphere of negotiations. And the party's actions should be encouraging confidence, not undermining it. And no party should take steps that could prejudice the outcome of negotiations and the United States will not consider settlement activity to affect any final status negotiations, including final borders. Borders are to be negotiated between the parties in accordance with UN Security Council Resolutions 242 and 338.

Mr. President, in closing, let me say that I will continue to work to help you advance toward peace and to help the Israelis advance toward peace until the day that I am done in office. But I do want to say that one of the really great joys of this last period of time in working with you has been to see your leadership and that of Prime Minister Fayyad, but also to see the extraordinary capability of the Palestinian people to persevere.

Against all odds, these are people who are building institutions of democratic governance. They're going to work every day. They're educating their children. They are doing what men and women across the world want to do, which is that they're seeking to live in peace and dignity. And they are a dignified people. And I am certain that the day is coming soon when they will have a state that will be in accordance with that great national dignity. Thank you very much.

Q. Mr. President, in a few days, you will be traveling to Cairo for the National Reconciliation Dialogue. Hamas puts conditions to release its prisoners that are held by the PA as a precondition to participate in the dialogue. So what is your response to that? Another question, Mr. President, what is the reaction of the PA to what is happening in the constructions at the graveyard in Jerusalem?

Ms. Rice, this is your last—probably your last visit to the region. And yesterday, you announced that the peace process will not witness any signature of an agreement this year, according to the understandings of the Annapolis conference. So what is the purpose of your visit? And do you have other future objectives that you would like to achieve before the end of this year and the swearing-in of the new administration?

President Abbas. Thank you. As for the Hamas detainees or what is—are described as political prisoners by Hamas, I would like to stress here that we do not have any political prisoner or a prisoner held on a political basis and we will not arrest anyone for their political affiliations or ideas or opinions or the expression thereof, whether politically or democratically. But what I would like to say very clearly, in order to maintain order and stability, we will not accept for anyone to practice any security actions, except for the Authority or that will obtain weapons or illegal money. These are the three issues we will not tolerate and we will not forgive.

But as for prisoners, in terms of political prisoners, but—we will never accept that. We believe in democracy and we believe in pluralism and we believe in the freedom of expression of any kind of opinion, whether it supports or is against us, or otherwise. For security reasons or for military reasons or for financial reasons, then we would arrest these people and we will take them to court.

The second point regarding the graveyard that is being now destroyed in Jerusalem—unfortunately, the Israeli Government is—and they're taking these actions which is destroying the Islamic graveyard, named Maman Allah. And this is a very dangerous issue, and I do not believe that the Israelis would accept this for themselves or for their own graveyards to disturb their dead, as they do with our Palestinian graveyards and what they do with the Islamic and Christian graveyards. And we raise our voices high and we reject completely these kinds of actions regardless of their justification and regardless of their source and initiators and regardless of any talk that they say that they have justifications for. This is something that we cannot accept.

Secretary Rice. Yes. Well, my purpose in coming is the purpose that I've had all along, which is to advance the Annapolis process as far as we possibly can. And I'm going to continue to work to do that, as I know the President will and the Israelis will as well.

I want to just say we knew when we said that at Annapolis expressed a desire, indeed, expressed an intention to try and help the Palestinians and Israelis reach agreement by the end of the year, that if that agreement was not reached by the end of the year, there would be those who would say that the Annapolis process, the negotiations, had failed. In fact, it is quite the opposite.

And one of the things that we must do is that we must show—and the President and I have had some discussions about that, as I've had with Minister Livni and with Prime Minister Olmert—that the Annapolis process has laid the foundation for the eventual establishment of the state of Palestine. It has done so by creating integrated pillars for peace to be built from the bottom up, on the ground, improvement of conditions on the ground, establishment of viable Palestinian institutions, Roadmap implementation and adherence to those obligations, and a peace process that addresses all of the core issues. That is what Annapolis stands for. It stands for the integration of all of those pillars. It also stands for the fact that the parties must come to agreement themselves. There can be no substitute for bilateral agreement between the parties.

The United States has tried to facilitate and to help, but ultimately, the parties have to come to agreement. That is also what Annapolis stands for. Annapolis stands for the international commitment to ending the conflict, both in the region by the fact that the Arab representation at Annapolis included Saudi Arabia under its own flag for the first time, and the international community which will be expressed again by the Quartet when we go to Sharm el-Sheikh this weekend.

So the Annapolis process is vital and it is vibrant and it is continuing. And I am quite certain that, carried to its conclusion, it will produce a state of Palestine. It is perhaps not surprising that a conflict that has now gone on for decades may take some more time to resolve, but the right elements are there. The right level of trust has been developing between Palestinians and Israelis to make this work. And just as Oslo was a basis, Madrid was a basis, Annapolis is a basis. And while we may not yet be at the finish line, I am quite certain that if Palestinians and Israelis stay on the Annapolis course, they are going to cross that finish line and can do so relatively soon. And so my purpose is to help the President and the Prime Minister and the chief negotiators to make certain that the progress of Annapolis is sustained and left in place and intact so that the cross— the finish line can finally be crossed.

President Abbas. I would like to add something here, that Annapolis had laid the real and the genuine and the concrete foundations for the peace process, and the negotiations between the Israeli and the Palestinians—Annapolis. For the first time after Annapolis, there was a real dialogue about the final core issues. This did not happen before.

But I would like also to say that Annapolis had brought about the Paris conference that—where more than 90 countries participated, the countries that are helping economically the Palestinian cause, and who committed themselves to assistance to the Palestinian people, and many of them fulfilled their obligations and commitments. And so Annapolis had very—a lot of benefits, and this is one— some examples of it.

Q. Secretary Rice, some senior Palestinian officials in recent days have expressed concern that the American and Israeli political calendars will lead to a vacuum, and that Israel will exploit the vacuum both to continue settlement activity and other activities on the ground that may be prejudicial to an agreement, and to conduct military campaigns—just one in Gaza on Wednesday.

I wonder if you share that fear or that concern about a vacuum and its effects? And as you now come toward the end of your term in office, if you feel a sense of lingering frustration that the Israelis have continued settlement activities throughout this period, including since Annapolis, despite their Roadmap commitments, and despite your and President Bush's repeated descriptions of this as a problem and as damaging, as you just said now, to the peace process?

Secretary Rice. Well, I think we're on the record about our views of the settlement activity, and that has been American policy in the past. I think perhaps we've spoken as clearly about it as anyone, perhaps more clearly, the President and I. And it is going to continue to be the case that settlement activity is inconsistent with the atmosphere that really helps promote negotiations.

Now that said, yes, it is a period of transition both in the United States, and ultimately, it will be a period of transition in Israel, although there is currently a government there—a caretaker government there. We are going to do everything that we can to make sure that this period of transition concentrates on solidifying the pillars of Annapolis. That means, more than anything, that the progress that is being made on the ground should be, if anything, accelerated. We should be working toward making certain some of the economic projects that are on the drawing board and the mission of Tony Blair, the security forces training that is going on, the improvement in conditions of the Palestinian people, that that continues.

President Abbas kindly mentioned the American assistance which has been direct support to the Palestinian Authority for the first time. I would expect that we will continue that, and I'm going to look at a USAID project. General Silva will continue to work on the Roadmap. So sustaining momentum is important, and sustaining momentum in the right direction, not in the wrong direction, is extremely important. So I—this is a period that can be used well. It can also be used to continue to advance the discussion on the core issues. And that's what we expect of both sides.

Q. Dr. Rice, we have heard that you would like to see a statement being prepared about the main issues that the Israelis and the Palestinians have agreed to, and presented during the Quartet meeting at Sharm el-Sheikh. Is this true? And would that be a general public statement? Would it be a written statement? And what about the recommendations that you would give to the new administration—American administration about the peace process?

Mr. President, did you ask Dr. Rice for specific issues to be conveyed to the new administration?

Secretary Rice. The Quartet meeting was, in fact, a request from the parties to brief the Quartet, and so it will be in the hands of the parties to brief the Quartet in any way that they deem necessary. I know that they have believed very strongly, and I think correctly, that the confidentiality of their negotiations is one reason that they've built trust, and I don't expect that that is going to change.

I do know that there has been a lot that has been done to develop mechanisms that will allow the parties to resolve key issues even if they are not yet resolved. And I would expect that we may hear something about that. But again, this will be briefings from the parties to the Quartet, and we'll wait and see. I'm sure that there will be, as is usually the case at the end of a Quartet meeting, some public statement concerning what took place at the meeting. But the bilateral nature of these negotiations and the confidentiality of them have been two hallmarks of the Annapolis process, and I think that will undoubtedly continue.

As to advice to the next administration, I'll give that privately. I think it won't be all that different from what you've been hearing from me here. But again, I hope that the tremendous commitment of these parties, the Palestinians and Israelis, is fully understood by all who will come later. Because it is too easy to assume that the fact that negotiations take time, that negotiations raise difficult issues, that there are even disagreements from time to time about what is going on on the ground is somehow a signal that things are not moving forward.

In fact, I've seen them move forward a great deal over the last year, and more than anything, I will want to communicate that there is a momentum in this process and hope that it will be sustained.

President Abbas. Dr. Rice has mentioned many issues regarding the current Administration and the new administration, what can be conveyed as messages and recommendations. But our wishes, our desire that the current Administration will convey to the new administration that they start immediately addressing the Middle East issues and the peace process that we would benefit from the time so that we don't waste the previous efforts and we don't waste time in vain. And this is what we've asked and we hope that the new administration will follow up on this and will take up this point of view.

Q. Mr. President—okay, it's working now? Sorry. Mr. President, I wanted to ask you a little more detail (inaudible) what you want to see from the Palestinian dialogue; what would it mean for Gaza, what would you want to see in Gaza, and what would you want to see happen with the Palestinian security forces?

And Secretary Rice, if there is indeed a successful internal reconciliation with Hamas, what does—how would that affect dealings of the international community (inaudible)?

President Abbas. We—what happened on the 14th of June in 2007, we—we consider it as a coup d'etat. There's no discussion about this. We talked to our Arab brothers in order to reestablish the security situation and to reorganize the security forces on professional basis, and this is what we've asked of the Arab countries. That is in Gaza Strip, of course, in addition to the two other issues that we discussed and explained, about the elections and about the nature of obligations of any future Palestinian government.

Secretary Rice. As to reconciliation, we have noted, along with other members of the Quartet, that we fully understand the desire for unity on the part of the Palestinian people. That unity, if it is able to advance the desire of the Palestinian people for peace, which I think is a very deep desire, is something that of course should be supported. Now of course, the issue is the former agreements that Palestinian leaders have signed on to now for decades. The issue is to seek peace recognizing that negotiations, not violence, is the only course to peace. The issue is to recognize that there is a legitimate president of the Palestinian Authority. Those are issues that have been raised by—by the Quartet, were raised at the time of the elections, were raised at the time of other reconciliation efforts. But I want it to be fully understood that the United States really does understand why the Palestinian people want unity. We believe that they want unity that will serve their interest and lead to peace. Thank you.

Secretary Condoleezza Rice and Prime Minister Salam Fayyad delivered these remarks in Jenin

Prime Minister Fayyad. Good evening. I would like, at the beginning, to express my utmost pleasure to receive Madame Secretary of the United States of America, Secretary Rice, in Jenin.

This is for us, as Palestinians, a historic visit for numerous reasons. This is the first visit conducted by a Secretary of State of the United States to Jenin. When I say it is historic for more than one reason, it is because I believe that this visit has enabled Secretary Rice to see, firsthand, the consistent and persistent efforts of the Palestinian Authority, supported by awareness and ambitions and aspirations of the Palestinian people, in terms of building the Palestinian state, the upcoming Palestinian state. If we were here in this hospital and about to integrate on the road of rebuilding the Palestinian institutions of this important section in Jenin, this is just a part of the overall efforts and accomplishments in Jenin.

I would seize this opportunity to express my gratitude to—and appreciation to the U.S. administration for their support in this vital sector—in this health sector. And, as you know, this is not only about this effort—if we were talking today about the health sector, yesterday we were talking and addressing other sectors in which the United States helped us, in terms of implementation. There are many other infrastructure and other services. Today we are talking about health. But there are also other U.S.-supported projects in private sector: education, infrastructure, and different domains, roads, water, and other—in terms of capacity building of institutions.

Again, once more, I thank the United States for this support. As you know, the United States had actually given us direct assistance, in terms of dealing with the activities of the Palestinian Authority by financing our (inaudible) costs. They have covered about—with the sum of $300 million that were transferred directly from the U.S. administration, once in March of this year, and another time also three weeks ago. This is an unprecedented level of support, cash support, also in terms of the assistance itself, and also in terms of the means of direct transfer of the cash assistance to the treasury of the Palestinian Authority, which is—shows recognition by the United States and the international community, in general about the progress and the accomplishments that the Palestinian Authority has been able to make, in terms of building its institutions. In this case I am talking about the financial systems. So, I thank Secretary Rice for her support in this field, and thanks to President Bush, and thanks to the U.S. Congress and the American people for this support, which reached this year about $700 million. And you have seen me, on more than one occasion, along with my friends, the Consul General Jake Walles and his colleague, Howard Sumka, Chief of USAID, on numerous occasions where we inaugurated projects, and the same applies also to other friends from the international community who supported us in similar ways, in order to build the institutions of the Palestinian Authority, an effective and serious and professional Palestinian Authority services, to provide services to the people.

This is an important topic, and I say again that if we look at this in a general sense, in the context of state-building, this is what this project is about, is to end occupation and the creation and building of the Palestinian state. And, as you know, we have, on many occasions, have stated that we will exert all efforts in order to build the Palestinian state, despite the presence of occupation. We will continue to build, in spite of the occupation. And this is what the Annapolis process was all about, the foundations of this process is to build the institutions of the Palestinian state.

And, if you remember, the Annapolis conference focused and stressed the need to end the occupation which started in 1967, and to build the Palestinian state on the occupied territories in 1967. This concept has been stressed in the Annapolis conference with all its implications, in terms of implementing the Roadmap.

In the past year, we have exerted efforts. Since the conclusion of the Annapolis conference we have exerted tremendous efforts, in terms of building, construction, preparation towards the creation of the Palestinian state and its capable institutions. These are our obligations under the Roadmap. Our obligations fall under—are about improving our capabilities, and our abilities to deal with all the challenges, in terms of general governance, administration, in terms of building institutions capable of running a state, including the Palestinian national economy.

As you know, the Roadmap—there are other obligations that the Israelis have to meet. And we need assistance, in terms of implementing our own obligations in order to meet the aspirations and the Palestinian dream of ending the occupation and building the state. And we have received, and we continue to receive, a lot of international support in order to enhance our capabilities and make us able to bring about the state.

What we are about today, here, is to—is this hospital, which will provide services to the Palestinian people. And this is in evidence, again, of the assistance that is provided to us by the international community.

But in order to reach a point where the occupation ends, and that we'll be able—a point that we will be able to build the state, this will only come about once Israel fully meets the Roadmap as part of the Roadmap obligations, including cessation of settlement activities, immediate cessation of settlement activities, as stated in the Roadmap. And, in addition—and given the performance, the improvement and performance of the security sector, it's about time that the Palestinian citizen needs to feel tangibly the difference in a substantial way, in terms of the change in the conduct of the Israeli security services, with regards to the continuation of the Israeli incursions into Jenin and other areas.

In Jenin, there has been a significant improvement in the security environment, which has been witnessed and recognized by all. So this is a prerequisite. It's a must, in order to reach our destination and give the Palestinian people the chance to feel tangibly to the point where there would be a change in access. And here I am talking about the changes that need to be answered in terms of access, so that people in Jenin and other areas who continue to suffer from lack of access from movement restrictions.

When we talk about movement restrictions, first and foremost, what comes to mind is the Israeli-imposed siege on the Gaza Strip, as well. These are prerequisites for the success. These issues need to be resolved, and need to be focused on in order to reach the destination that we want. There are important aspects for this process, the political process and aspects.

The final status issues where there is a need to continue negotiations in order to reach acceptable formulas for the solution that would meet the international legitimacy and international law. And, in parallel to that, there is a need to continue and prepare to build and create the Palestinian state, and this is what we are focusing on. This is what requires cooperation from all, and this is what needs to actually be implemented.

Madame Secretary, again I welcome you here in Jenin. And, please, allow me to say, as we are about to go through a transitional phase of the new U.S. administration, we know that you will, as other previous administrations and American political traditions, that you will transfer the files to the new incoming administration. And I am fully confident that what you—what will be transferred to the new administration will basically cover all the issues, as we stand—as they stand today, and what are the prerequisites for success.

But I also hope that you would convey—in addition to that, that you would convey to the new administration what you have seen here in Palestine through your numerous visits here—about 19 visits, if I were correct—and the last of which, your historic visit here in Jenin.

I hope that you will tell the new administration that you found in Palestine people who aspire to freedom, people who are peace loving, people who are seeking to achieve peace, that you have found in Palestine a people who aspire in order to reach all of these goals, to end the occupation, to create their independence of state with Jerusalem, with (inaudible)

Jerusalem as its capital, to create a modern state that—built on democratic foundations where liberties and freedoms are respected, cultural and religious tolerance, and open—cultural and open state for the creativity of all the peoples and civilizations around the world.

This is the state that we want, and our people are seeking to build. I hope that you will—urge you to convey this to the new administration. This is our people and this is what we are trying to do with your support. There is no doubt that this is an occasion for me to express to you personally my utmost gratitude for your efforts in trying to help us in order to reach all of these goals that I mentioned earlier and please allow me your excellency that the noble human values do not recognize borders, in fact, they go beyond borders— south, east, west and north.

And I thank you because I know fully that the feeling that you and the American people in general have felt—and are proud of the elections that you have conducted in the United States. This is the same feeling that has pushed you to work so persistently and exert tremendous efforts in order to help us to reach our goals.

Our people here—what we are seeking and what we are eager to do is to get to the day where we enjoy as all the other peoples around the world to live in dignity and freedom in our own homeland named Palestine, to live in peace and security with all of our neighbors, enhanced security and stability in the region at large, which is also to the beneficial to the entire international community. Thank you again and I wish you success.

Secretary Rice. Thank you very much, Prime Minister Fayyad, Salam, for, first of all, your leadership and your friendship over these years. We first met in the early years of the Bush administration, when it was a very difficult time in this region. Indeed, when President Bush came into office, of course, the Camp David efforts had collapsed, violence was raging, both from the second intifada and from large-scale military operations of Israel.

We have talked about the different situation now. I remember our discussion about the Bethlehem Investment Conference, which you sponsored and which was a great success. And we shared the story of the terrible day when I remember getting an anguished call from the Vatican because, indeed, a hole had been blown in the Church of the Nativity by a tank shell. These are different days for Palestinians and Israelis. But the work is not yet done. I do believe fully that the day is coming soon when the Palestinian people will live in their own state of Palestine.

I said yesterday, and I want to underscore, that one of the great joys of my time as Secretary of State and the many, many trips that I have made here, has been to see the tremendous perseverance of the Palestinian people, their tremendous desire to live in peace and freedom, and their great dignity, and to respect their desire to live in that state which will be in full accordance with the dignity that they have, as a people. And that is coming.

That day is coming because the process of coming to peace, that Annapolis launched, of course, does have a political element that will deal with the final status issues, the core issues, and the parties are discussing those issues for the first time in almost a decade. And they are making progress, and they will report to the Quartet about that progress tomorrow.

But it is also going to come soon, the Palestinian State, because of what is being done here in Jenin, and under your leadership in other parts of the West Bank. You said to me once that the people of Palestine should begin to build the institutions of the Palestinian state in anticipation of an end to the occupation. And Jenin is an example of doing precisely that.

I met earlier with the security chiefs who are providing security and a secure environment to the Palestinian people, so that they can work and educate their children and have their daily lives.

This wonderful hospital, where I saw mothers with their newborn babies, is an example of an improvement in the life of the Palestinian people. There are shops open along the streets here of Jenin. And I know there are many other projects like this throughout the West Bank that you and the Palestinian authority under President Abbas's leadership have been bringing into being.

I want to thank our USAID representatives here, because we want, in the United States, to be good partners for the Palestinian people as they build the institutions of statehood and recognize and realize the creation of the Palestinian state. There are other international partners, as well, in the region and across the world, who are a part of this great effort to build a Palestinian state from the ground up.

And so, when Annapolis recognized the need for political negotiations to end the occupation that began in 1967, the importance, in a second track, of building a better life for the Palestinian people, there are improvements on the ground, but especially in the establishment of institutions of the state, and in particular, the security institutions of the state. And, on a third track, the need for regional and international support for the entire process.

We understood Annapolis to be an integrated process, in which all three elements had to work together. They are indivisible. A Palestinian state will not be built in a room negotiating the borders of the Palestinian state without the creation of institutions that are strong and accountable, that are able to deliver for their people. And those institutions of the Palestinian state will not be able to flourish without an effort to end the occupation.

And all of it needs the support of the international community and of the region, and so that integrated approach is what we have launched at Annapolis. And I am quite certain that that integrated approach will continue.

I want to say, too, Prime Minister, that the United States recognizes the importance that you attach also to the livelihood of the people of Gaza. We have talked about that today, about the fact that the Authority spends a significant proportion—I believe more than 50 percent—of its resources for the people of Gaza. And they and their humanitarian needs will also not be forgotten by international partners like the United States.

And so, I am just delighted to be here in Jenin to see, firsthand, what the Palestinian people are achieving, even under difficult circumstances, even with the difficult tasks. This is a place of hope, this is a place of inspiration. And, ultimately, it is a place from which the Palestinian State will spring forth.

Thank you very much for having me here.

Q. Do you think that the new U.S. administration will continue to support the Palestinian Authority and with this—the prevailing situation in the United States would affect the support to the Palestinian Authority?

Prime Minister Fayyad. There is no reason for us to believe that the incoming U.S. administration will not continue the same level of support and the same approach of the current U.S. administration in terms of supporting us economically and otherwise. But let me also say that we look at this situation pertinent to our own situation, with relying on our own selves. We need to continue exerting our efforts to improve our performance, our institution's capabilities and the ability of our own institutions also to deliver services in a very professional way to the Palestinian people. And also to look at reducing the level of assistance that we rely on from abroad—from the international community.

I'm not talking about immediate end to foreign aid that we receive. But I'm talking about putting the Palestinian Authority on the course of relying on ourselves and if we develop our own policies, as is the case today, if the current United States administration, continue to provide us the level of support, which as I said was unprecedented, about $700 million for this year, I think that this will be available and will continue and we expect that this will also come from other international donors.

I'm not talking about immediate end to foreign aid that we receive. But I'm talking about putting the Palestinian Authority on the course of relying on ourselves…

The United States today, in light of the assistance that they provided to us, is the bigger donor to us as the Palestinian Authority. We expect that this—that we'll continue to have the need and to receive foreign aid but at the same time we need to work and exert the force in order to reduce the level of reliance and dependency on foreign aid. As I said, the need for foreign aid today is a fact but it's not a policy. As long as we, the Palestinians, think this way and prepare ourselves and our policies to that end and work in order to improve the level of performance and our institution's capabilities, I think that this support will continue to come.

Secretary Rice. (Inaudible). I have to say that the support that the parties have had, has had a strong bipartisan basis in the Congress (inaudible). I want to emphasize that I think the American people want to see the Palestinian people living in their own state, and that is a shared goal.

I might just note, too, that what I have seen over the last several years that has been a really important change is in talking with the governor, or the director of the hospital here, or the security chiefs, and certainly the prime minister. There is a spirit of self-sufficiency and accountability among the Palestinian people that is very notable, a desire to do the best that they possibly can to deliver for their own people.

And, therefore, our responsibility, as Americans, or in the international community, is to be a partner, not—this is not a position of patronage. This is a partnership, because the Palestinians themselves are taking on governing in the right way.

Q. Madame Secretary, you are focusing on Israel with Tzipi Livni and Benjamin Netanyahu. Did you get the sense that whoever is the next Israeli prime minister, these security programs are going to be continued?

And also another question. Have you told this hospital that the U.S. can do something more for Jenin, for this hospital project here?

And a question for Mr. Fayyad. You— I wanted to know if you are optimistic. You said that the U.S. is going to continue to help. But are you optimistic that the Annapolis process, as it is —

Prime Minister Fayyad. (Inaudible) in the form of expectations.

Q.—the Annapolis process—are you optimistic it is going to survive the Bush administration?

Secretary Rice. Sylvie. First of all, in terms of the United States' support, as the prime minister said, there has been budget support, there are also numerous other projects that USAID is doing across the West Bank. There is a public-private partnership for Palestinian development that is doing what is one of the projects that I hope to come back and visit, which are centers for youth modeled on, kind of, boys and girls clubs, where youth can go after school and have computer support and the like.

And so, the United States has a broad program of support. And, of course, that is in addition to the very good work that General Dayton has done, in terms of the security forces. So, it's a broad program of support.

In terms of my discussions in Israel, I transmitted very strongly, communicated very strongly, my belief, after a number of years now in working on this issue, that the programs that are in place are programs that are benefiting, first and foremost, Palestinians. But in the accountable government, the competent government that is developing here, is also benefitting Israelis, because security has improved for Palestinians, and it is improving for Israelis, as well. And I think that that is in the interest of—that, and ultimately, the establishment of a Palestinian state, is in the interest of Israelis, as well as Palestinians.

Prime Minister Fayyad. Well, again, what has come out of the Annapolis process conference, what started there, a fully integrated approach for looking at things.

And so, to answer your questions of optimism, pessimism, I would not really address it this way. It's not really—it is a question of necessity. Really, this is not a conflict that is going to end by it being left to us and Israelis to deal with it alone, and somehow find a solution. I do not think that is going to happen.

Unless we have the active support, involvement by the international community, led by the United States, this conflict is going to take much longer trying to resolve if it will be ever resolved. Annapolis provided, conceptually, the framework within which the total issue can be approached in a fully integrated (inaudible). There is a political discussion that has to take place in order to come to agreement on the core issues that form so-called permanent status.

It is also our need to work well and very hard on getting to the point of having our state, actually, which is a key deliverable of this process, a key deliverable of Annapolis, to the point of actually being established.

So, to think that somehow, because there is a change of administration, this work is not going to continue, I think is really expecting too much in the negative direction, and I do not think we should do that. I mean, it is not plausible. I think the importance of this issue is well recognized. The leadership of the United States has been called upon in the past to help with this issue, and will continue to be called upon to help with this issue.

Let me also add that this conflict has spanned the terms of nine U.S. Presidents, and is about to outlast the term of a tenth U.S. President. But I do believe when this issue is resolved, the past few years will have contributed to that in an important way, in an important doctrinal way.

Ending this conflict on the basis of two states—and I remind everyone that was the program of national consensus on the Palestinian side going back to 1988—get-ting that solution, concept, to be a matter of international consensus is not a small thing. Placing it also in the context of what needs to happen in order for us Palestinians to get to the point of being able to govern ourselves effectively in all (inaudible) of government, is also an important concept.

Placing all of this in the framework of what each of the partners has to do is also a key contribution. Annapolis did that. There has been a failure. If anything, I feel in some important ways it tells of compliance, or lack thereof, as in the case in so far as Israel's obligations under the Roadmap are concerned. If anything, I think the effort should be strengthened and enhanced. There should be a stronger push to ensuring compliance with the requirements, rather than actually disbanding or abandoning this process. To the contrary, I think it makes perfect sense.

But first things first. If we are to go—to get to where we are going, elements of success—those elements that are necessary to get us there have to really get the world's utmost attention and full preoccupation.

Q. We heard reports today that Hamas is boycotting the participation in the national dialogue in Cairo because the PA refused to release Hamas prisoners in PA jails in the West Bank?

Secretary Rice. Well, I chose to come to Jenin because this has been, really, the first major Palestinian city in which the prime minister has brought together international support, security reform and responsibility, and economic development, with the help of the international community.

And, in fact, the dark days of 2002, which I remember with an enormous sense of tragedy for the people of Jenin, of the horrible carnage here, the terrible conditions here, that it could be reborn in this way is, in many ways, an affirmation of the fact that nothing is impossible.

And, in fact, it reminds us that, even though, as Salam said, this conflict has not ended decade after decade after decade, it is possible to end this conflict on the basis of the efforts of the Palestinian and Israeli people to say, “Enough is enough. It is time to have two states living side by side.” And I think that Jenin, in its own way, represents exactly that.

In terms of the political process, there is a political process that is taking place between the sides, negotiations are going on. The sides, the two parties, are the ones who requested the meeting of the Quartet, and they will report what they wish to report.

But I suspect that, given that the confidentiality of their discussions has been an important part of what they are doing, because these are extremely sensitive issues, they are the first time that these issues have been addressed in almost a decade, that they will want to maintain some of that confidentiality. But they will undoubtedly report on their progress, and they will report on how they intend to move forward.

Prime Minister Fayyad. Let me first say a few more words about the overall approach to dealing with this problem, and the necessity—then I will switch to Arabic when addressing the other element (inaudible) of the necessity of pursuing all of these tracks in parallel—all of what came out of Annapolis in parallel. This is important, because if some think that somehow, you know, by just doing what we are doing right now, you know, the conflict is going to end, all of this is necessary. But it is not going to be sufficient to really get us to where we are going.

What we are doing here is building towards statehood, toward ending the occupation and building towards statehood. If nothing else happens, or things do not happen on the other track to make it possible for us to realize that dream of getting to the point of being free, then that is not going to work. And it is going to increasingly be seen as an exercise in improving the quality of occupation. This is not what this exercise is about. This is about ending the occupation, not beautifying it.

So, it is of paramount importance for this process to be approached simultaneously on all of these tracks in order to make any sense. This, of course, imposes a requirement on us, first and foremost, and we're shouldering those responsibilities. Our sense of responsibility is what we have to do, ourselves. That is what inspires the Palestinian Authority now. That is what really explains why it is we have been pursuing all of these initiatives with the greatest vigor. And it is in this sense that I include dealing with our own domestic situation as a key element of what we have to do, going forward.

Yes, an important part of our responsibility, we as Palestinians, is to work with the biggest challenge and the main concern, which is the end of occupation. And this—in addition to this, initiatives that we have spoken about in terms of building the institutions, also it is important to remember that we need to work on rebuilding and restoring the unity of the homeland.

This is a main goal and a main target of our policy and on this basis we had welcomed the Egyptian efforts, which are supported by our brothers, other Arab countries, in order to help us reach our goal, which is to end the current division and splintering between the two parts of the homeland. And on this basis, we firmly believe that this is also a main goal for our Arab brothers and Arab countries.

This requires us as Palestinians to tackle our own domestic issues and focus on this goal, which is to reunite the homeland, that's why we welcome the Egyptian efforts, and we welcomed the Egyptian paper, which was the result of deliberations and consultations with all the Palestinian factions and was supported simultaneously collectively by all our Arab brothers.

This requires us that we, Palestinians, move forward in order to implement this initiative immediately. This (inaudible) if we were concerned and interested in reuniting our homeland—is to—I think what needs to motivate the Palestinian policies and actions, one is not to procrastinate and not to place prior conditions and terms in order to reach the goal of reuniting the homeland. That's if we were serious.

If there is seriousness we need to leave procrastination aside, reluctance aside, and move forward to implement the initiative. Another issue is that we need to work on the elements of the Egyptian paper and implement them because they are the key to rebuilding—reuniting the homelands and would give further room to discuss the political sphere—political aspects of it in order to either reach common agreement on this or maybe to manage those differences away from violence. This is the goal. I heard the reports that you indicated and I heard different statements. I can't even follow up on them because they are numerous statements. Instead of issuing statements and releasing all about procrastination, delay, reluctance—why do we continue with the delay? In whose benefit or interest this is?

I would like to stress what President Abbas, Abu Mazen, said yesterday. We in the Palestinian Authority have no political detainees. In other words, we as the Palestinian Authority enforce rule of law. We do not make arrests on political backgrounds. We do not detain or arrest a person because of their political affiliation. Yes, we do have detainees but those detainees and those prisoners are arrested because of violations of the law, including security offenses. And I stress again that we do not have political detainees whatsoever. So talking about this issue is basically trying to avoid talking about the core issues.

There is an initiative that Egypt has put forth and now it's up to the factions in order to take their final, and decisive positions. What we call for, again, is to leave aside procrastination and move forward sincerely, towards ending this catastrophic state of division and deal positively with what Egypt has reached with thankful efforts from all other Arab countries.

What we are carrying out in terms of security, I've addressed this today and I've spoken about this previously, that we need to empower and strengthen the Palestinian Authority today. Changing the policies of our security establishment, if this is what they are proposing, this actually leads to weakening the PA. There is a need to pursue the security effort in line with the same policy.

How can we talk about empowering and strengthening the Palestinian Authority and enhancing its esteem and standing, at the same time that the Palestinian Authority would give up its main goal and responsibility to provide law and order and security for the Palestinian citizens? This cannot be straight policy, even talking and addressing and demanding such a change in our policies, is, in addition to what I mentioned, which is avoiding to deal with the core issues, is also aimed at weakening the Palestinian Authority.

And my question is, to whose benefit that is? Weakening the Palestinian Authority is not our goal. If the Palestinian Authority is not strong enough on the ground how can we get to a point where we achieve our goal to end the occupation and build our state. These are two issues that cannot actually meet. And, as I said before, we will stick to our policies and will continue our efforts to strengthen our institutions and our authority to (inaudible) service with the citizens.

Q. Secretary Rice, to maintain continuity with the Annapolis process, do you think it would be a wise idea for the next administration to at least set a target date for an Israeli-Palestinian agreement?

And, Prime Minister Fayyad, do you think it would be helpful if the next administration, to resolve the situation in Gaza, should open a dialogue on some level with Hamas, a direct dialogue with Hamas?

Secretary Rice. I will give any advice that I have to my successors privately, and then you won't hear from me again. But let me just say that, obviously, when we did the Annapolis process we decided to set an aspirational goal of the end of the year, to make best efforts, I think it said, to resolve the conflict by the end of the year. And I do think that that helped in stimulating a sense of urgency.

Of course, the downside is that many things can intervene. And the political circumstances became quite complicated between the end of the Annapolis conference and where we are today.

And I would just underscore that, in setting aspirational goals—and, let me tell you, we thought about it. We thought about the fact that, in setting an aspirational goal, we might set up a circumstance where, if that goal was not reached, that if the best efforts didn't reach that goal, that people would say, “The negotiations are over.” I think we have managed, despite the fact that it is now difficult to see how that could happen by the end of the year.

We have managed, nonetheless, to maintain momentum in all of the tracks of Annapolis. We have managed to maintain the sense, principally because of the views of the parties, that these negotiations will continue until they result in an end to the conflict and an end to the occupation that began in 1967. So, in that sense, I think we have achieved what we had hoped to achieve in establishing an aspirational goal.

Prime Minister Fayyad. (Inaudible) engage in giving advice to incoming administration or others, I can tell you about someone who believes in the importance of dialogue, importance of clarity, also—as to what is required to change the adverse reality that faces us.

That to me, is what's important. And I often said, actually, we didn't get to where we are today for lack of dialogue. I am talking about us Palestinians, now, as I prefer to most of the time, evaluate issues. It's not lack of dialogue. We have plenty of it. What we didn't have enough of is dialogue that is driven by principles of what we know works, what we know does not work.

The first principle amongst those is actual recognition by everyone in the occupied Palestinian Territories that the Palestinian National Authority is home for everybody. It is not a party to anything. As and when this begins to be accepted with all that comes with it by way of requirements of governing the Palestinian people, managing their affairs, I think resolution to our domestic problems would not be difficult.

And as I just said, in answer to another question, we attach a great deal of importance to the dialogue now underway, or about to get underway. I mean, plus preceded by, again, (inaudible) dialogue, getting to the point where we are today. Let's see what happens the next few days. I attach a great deal of importance to that round of discussions to actually be meaningful, to be concluded, to produce something, and for it not to be a dialogue about dialogue, and dialogue about the potential of adding more dialogue.

The needs of the Palestinian people are quite pressing. There is a lot that is at stake: 1.5 million of our people continue to suffer, and the misery index has never been higher. For how much longer can that be allowed to continue while we are still thinking, you know, about modalities for dialogue? It is time to get on with it.

What is on the table is adequate to really get us to the point where we are going. And I believe it is essential to do that, both in order to end the misery I just referred to, but also to put us on a path that is consistent with the need for us to get to that point where we have a Palestinian state. Because, after all, Gaza cannot but be an integral part of that state. Thank you.

Secretary Condoleezza Rice, Secretary General Ban Ki-Moon, Minister Sergey Lavrov, and Representative Blair delivered these remarks in Sharm el Sheikh, Egypt

Secretary General Ban. Good morning, ladies and gentlemen, Salam ale-qum. Given the landmark nature of today's meeting, and the strong (inaudible) commitment that was displayed by President Abbas and Foreign Minister Livni in briefing the Quartet for the first time. I will read today's Quartet statement in full.

Representatives of the quartet met today and heard from Palestinian Authority president, Mahmoud Abbas, and Israeli foreign minister, Tzipi Livni, at their request. They were joined by Quartet representative Tony Blair.

President Abbas and Minister Livni briefed the Quartet on Palestinian-Israeli negotiating efforts since the November 27, 2007 international conference in Annapolis, Maryland that formally launched bilateral negotiations to bring an end to the conflict by achieving the goal of two states, Israel and Palestine, living side by side in peace and security.

The Palestinian and Israeli representatives reaffirmed their commitment, as stated in the Annapolis joint understanding, to vigorous, ongoing, and continuous negotiations in order to conclude a peace treaty resolving all outstanding issues, including all core issues, without exception, as specified in previous agreements.

The parties' representatives have found that over the last year they have engaged in direct, sustained, and intensive bilateral negotiations, based on a joint work plan that included the establishment of more than 10 committees. They described how the parties have been actively engaged, not only on core issues, but on an array of other topics necessary to turn the two-state solution into a reality.

Without minimizing the gaps and obstacles that remain, the representatives of the parties share their assessment that the present negotiations are substantial and promising, and they have succeeded in putting in place a solid negotiating structure for continued progress in the future.

President Abbas and Foreign Minister Livni stated the parties had reached a number of mutual understandings on the principles governing their negotiating process. These include: the need for continuous, uninterrupted, direct bilateral negotiations; the principle that nothing would be considered agreed until everything is agreed; the need to reach a comprehensive agreement addressing all issues, as agreed at Annapolis, rather than just announce agreement on selected items in isolation.

The parties' representatives also confirmed that, as stated in the Annapolis joint understanding, the parties remain committed to implementation of their respective obligations under the Roadmap, and to the agreed mechanism for monitoring and judging Roadmap implementation, and that, unless otherwise agreed by the parties, implementation of the future peace treaty will be subject to implementation of the Roadmap, as judged by the United States.

In addition to describing the structure of the negotiations and indicating areas in which progress has been achieved, President Abbas and Minister Livni expressed gratitude for international support provided during the last year, and requested continued support from the Quartet and all members of the international community.

First, they asked that the international community support the parties' sustained efforts in the framework of the Annapolis process, and that, in respect, the agreed principles for their negotiations as described to the Quartet.

Second, they asked that all states promote an environment conducive to peace, non-violence, and the two-state solution. In this regard, they urge political and economic assistance, especially in relation to institutional and security reform, capacity building, economic development, and the fulfillment of pledges to the legitimate Palestinian government, which has accepted the Quartet principles and respects the PLO commitment.

They asked the international community to redouble efforts to confront and deny support for extremism, incitement, terrorism, and intolerance.

Finally, the representatives stressed that, absent the joint request of the parties, third parties should not intervene in the bilateral negotiations. At the same time, they confirmed that international support and assistance will be vital, once an agreement is reached, and that they intend to jointly consult members of the international community on this issue at the appropriate time.

The Quartet expressed its appreciation for the description by the parties of their joint efforts, which confirmed the seriousness of the Annapolis process, and underscored the determination of the parties to reach a comprehensive agreement.

The Quartet reiterated its commitment to supporting the parties' efforts underlined as a commitment to the irreversibility of the bilateral negotiations, pledged to respect the bilateral and confidential nature of the negotiation, and called on all states to adhere to these same commitments.

The Quartet endorsed the goals set out by the parties, and called on all sides—all states, to lend their diplomatic and political support to that end, including by encouraging and recognizing progress to date.

The Quartet renewed its call on relevant states and international organizations to assist in the development of the Palestinian economy to maximize the resources available to the Palestinian Authority, and to contribute to the Palestinian institutionbuilding program in preparation for statehood, as decided during the Paris, Bethlehem, and Berlin conferences.

The Quartet cited Jenin as an example of the success of reforms instituted by the Palestinian government, and of cooperation between the two sides made possible in the context of the Annapolis process.

The Quartet further welcomed the recent deployment of Palestinian security services in the Hebron governorate as a sign of the progress that has resulted from increased security cooperation. The Quartet emphasized its determination to continue to work with Israel and the Palestinian government to facilitate access and movement, and an improvement in conditions on the ground, in order to address urgent humanitarian needs, foster economic activity, and improve the atmosphere for the negotiations.

The Quartet reiterated its call to the parties to fully implement their obligations under phase one of the Roadmap, including in relation to freezing settlement activity and the dismantlement of the infrastructure of terrorism.

The Quartet emphasized the importance of continuity of the peace process. The Quartet agreed that the spring of 2009 could be an appropriate time for an international meeting in Moscow.

The Quartet reaffirmed its previous statements, including the September 26, 2008 statement issued in New York, further welcoming the recent calls for a broader peace.

The Quartet offered its support for the expansion of ongoing diplomatic efforts toward regional peace, noted the importance of the Arab peace initiative, and reaffirmed its commitment to a just, lasting, and comprehensive peace in the Middle East, based on United States Security Council resolutions 242, 338, 1397, and 1515.

Thank you very much for your attention.

Q. Do you think that the Quartet can play a role in elevating the sufferings of the Palestinians in Gaza? Thank you.

Secretary General Ban. Thank you very much. As a secretary general, I have a broad responsibility and mandate to provide humanitarian assistance to all the people around the world who are in need of such assistance.

Particularly, I am deeply distressed about the plight of the civilian population in Gaza. Through the work of several United Nations agencies, including UNRWA, World Food Program and World Health Organization, the United Nations is standing by the people of Gaza and helping them in these difficult times.

The Quartet has also made clear it supports more positive strategy for Gaza. I have been discussing this matter with Israeli government leaders, Prime Minister Olmert and Foreign Minister Livni, on many occasions.

And today I am also going to discuss this matter, about the closure of crossings and road blocks, and also settlement issues and demolition of houses. All these activities are not desirable for the ongoing peace process. Creation of atmosphere conducive to the ongoing peace process would be extremely important.

The calm brokered by Egypt needs to be respected. I am concerned about the recent violence, and call for it to stop immediately. The Palestinian factions must also work together for their national unity and reconciliation. And they must be able to overcome their division. I urge them to work constructively with the parties concerned and the international community in this regard.

I stand ready to—not only in participating in facilitating political process, but also, most importantly, facilitate the ongoing humanitarian assistance to these people. Thank you.

Q. Question, first, for former Prime Minister Blair, and then for Secretary Rice.

Mr. Blair, how important do you think (inaudible) administration (inaudible) continue to stick to the Annapolis framework? Same question for Secretary Rice.

Mr. Blair. The single most important thing is that the new administration in the United States grips this issue from day one. And it can do so knowing that there is a foundation upon which we can build.

For the first time, we have comprehensive political negotiations through the Annapolis process. For the first time, we have a proper plan to build security capability for the Palestinians, which is necessary to create a Palestinian state. For the first time, through the Paris conference, we have the funding and the reform program to build the institutions of that state. And, actually, for the first time, through the efforts of Egypt, we have an agreed position for Palestinian unity, shared by the whole of the international community.

So, there is a foundation. It can be built on. It has to be built on. And it has to be built on by treating this issue as of fundamental importance, not just to this region, but to the world from the first day of the next administration.

Secretary Rice. I have very little to add. As I said, I will give my advice to my successor privately, and then you won't hear any more from me.

But I do think that what we heard today from the parties, which is the most important element of this, is that they believe in the Annapolis process. They believe in the integrated nature of this process that builds peace, both from the bottom up and from the top down. They believe that their negotiations are producing an atmosphere of trust, as well as a foundation on which to build.

And, as Tony has said, we have an international strategy now, to finally establish the two-state solution which President Bush set as a goal several years ago. And so, I believe that the Annapolis process is now the international community's answer, and the party's answer to how do we finally end the conflict between Palestinians and Israelis.

Q. (Speaks in Russian.)

Foreign Minister Lavrov. I just want to say briefly, in English, that the conference, which everybody agreed to have in Moscow some time next spring, must certainly be a step forward.

And this is why we are taking time to make sure that we prepare for it properly, talking to the members of the Quartet, to the parties themselves, to the League of Arab States, to all those who participated in Annapolis. Because our common desire is to make sure that the Annapolis process succeeds. It requires persistent efforts on the part of the parties, first of all, but also on the part of the international community. And the statement read today by the Secretary General clearly spells out this position of the Quartet after we heard the very useful and important briefing by the parties.

So, spring next year would be the time when we would have a new administration in Washington, and Tony Blair and Condi Rice addressed the importance of continuity. It would also be the time when we hope there would be elections in Israel, and the government would be fully ready to promote specific steps. And we also hope that, by that time, we would achieve progress in the efforts headed by Egypt, making sure that Palestinians are united and settled their domestic agenda properly.

So, that is why we think that spring next year would be the time for the conference. It would certainly be devoted, first of all, to the support of the direct negotiations, and hopefully there would be results by that time, which we could really encourage to be finalized.

And we would also, as we did in Annapolis, address the comprehensive settlement issues, including the positive developments on Israeli-Syrian track, and also not forgetting about Lebanon, of course. Thank you.

Q. This is addressed, actually, to Mr. Ban Ki-moon. You talked a lot about commitment. However, we understand that the Arab side and the Palestinian side has (inaudible) a lot about a mechanism to make this possible—the Annapolis process, and also the Roadmap. How can we do that without a clear mechanism, whether it is supported by the UN, international community—(inaudible) ever has been approved by the parties can be implemented?

For example, the Palestinians talked seriously about the settlement activity, about the current invasions. You never talked about a mechanism to implement this. Is there a mechanism?

Secretary General Ban. I think the most important mechanism is the Quartet, composed of all the principals. And, together, with the Quartet representative Tony Blair. We have been meeting on a regular basis. We have all other European-sponsored mechanisms, and we have General Jones and Fraser, who have been maintaining all these mechanisms to follow and monitor.

And through this ongoing progress of the Quartet, as well as making some meetings with the parties more institutionalized in the future, I think we can be sure of this continuing monitoring and support for the negotiations, bilateral negotiations, of the two parties. Thank you.

Memorandum for the Secretary of State and the Secretary of Energy

Subject: Proposed Agreement for Cooperation Between the Government of the United States of America and the Government of the United Arab Emirates Concerning Peaceful Uses of Nuclear Energy I have considered the proposed Agreement for Cooperation Between the Government of the United States of America and the Government of the United Arab Emirates Concerning Peaceful Uses of Nuclear Energy, along with the views, recommendations, and statements of the interested agencies.

I have determined that the performance of the Agreement will promote, and will not constitute an unreasonable risk to, the common defense and security. Pursuant to section 123 b. of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2153(b)), I hereby approve the proposed Agreement and authorize the Secretary of State to arrange for its execution.

The Secretary of State is authorized and directed to publish this determination in the Federal Register.

President George W. Bush and Prime Minister Ehud Olmert delivered these remarks in Washington, DC

President Bush. I am pleased to welcome my friend, Prime Minister Ehud Olmert, back to the Oval Office. And I thank you for bringing your wife to have dinner tonight with Laura and me. I'm looking forward to it.

We've been through a lot together during our time in office. We strongly believe that Israel will benefit by having a Palestinian state, a democracy on her border that works for peace. And, Prime Minister, that vision is alive because of you. And I thank you for your steadfast support for peace.

And it's not easy. It's not easy to try to change the paradigm, and I understand that. But one thing is for certain—you've kept your word. And in international politics, that's important. And I want to thank you for the friendship, and thank you for your vision. And I just want you to know that I believe that vision is alive and needs to be worked on.

And again, I welcome you. Appreciate you coming.

Prime Minister Olmert. Thank you very much, Mr. President. I'm delighted to have this opportunity to express again the deep gratitude we all have to you, personally, as a human being, as a friend, as a courageous leader who has helped Israel so much over the period since you were President of the United States of America.

I will never forget that you have removed one of the most threatening strategic dangers from Israel on the east side, in Iraq. And this is a great achievement that makes life much better for many people in our part of the world, particularly for us and for our neighbors, as well.

You have set forth in motion the Annapolis process, which I was very proud to take part in.

Prime Minister Olmert. It continues with your guidance and support and inspiration. And this is very important, because as you say, a two-state solution is the only possible way to resolve the conflict in the Middle East.

So, Mr. President, on behalf of the people of Israel, I want to thank you. The importance of your leadership is greatly appreciated in our country. And I'm sure that when the history books will be written, the contributions that you made to the safety and security of many people will be greatly appreciated.

Personally, I want to thank you for your friendship on behalf of my wife, Aliza, and myself. And I'm so happy and proud that I had an opportunity to speak of it to you before you leave this great place and before I leave my office. And I'm sure that we will continue our friendship for many years to come.

President George W. Bush delivered these remarks in Washington, DC

Introductory Remarks have been omitted

President Bush. The Saban Forum is one of the world's premier venues for discussion on the Middle East. I thank you for the debate you provoke, and the differences you have made. And I'm honored to be with you.

Over the past eight years, I have had the privilege to see the Middle East up close. I have stood on the shores of the Sea of Galilee, and I've hiked the cliffs of Masada. I've enjoyed dinner in the desert of Abu Dhabi, and prayed at the Church of the Nativity in Bethlehem. I have looked into the eyes of courageous elected leaders from Iraq, Lebanon, Israel, and the Palestinian Territories. I have been convinced that no region is more fundamental to the security of America or the peace in the world than the Middle East.

This evening, I'll share some thoughts on our policies in the region these past eight years, and our vision for the future—a Middle East where our friends are strengthened and the extremists are discredited, where economies are open and prosperity is widespread, and where all people enjoy the life of liberty that is the universal gift of an Almighty God.

From our earliest days as a nation, the Middle East has played a central role in American foreign policy. One of America's first military engagements as an independent nation was with the Barbary pirates. One of our first consulates was in Tangiers. Some of the most fateful choices made by American Presidents have involved the Middle East—including President Truman's decision to recognize Israel 60 years ago this past May.

In the decades that followed that brave choice, American policy in the Middle East was shaped by the realities of the Cold War. Together with strong allies in the Middle East, we faced down and defeated the threat of communism to the region. With the collapse of the Soviet Union, the primary threat to America and the region became violent religious extremism. Through painful experience, it became clear that the old approach of promoting stability is unsuited to this new danger—and that the pursuit of security at the expense of liberty would leave us with neither one. Across the Middle East, many who sought a voice in the future of their countries found the only places open to dissent were radical mosques. Many turned to terror as a source of empowerment. And as a new century dawned, the violent currents swirling beneath the Middle East began to surface.

In the Holy Land, the dashed expectations resulting from the collapse of the Camp David peace talks had given way to the second intifada. Palestinian suicide bombers struck with horrific frequency and lethality. They murdered innocent Israelis at a pizza parlor, or aboard buses, or in the middle of a Passover Seder. Israeli Defense Forces responded with large-scale operations. And in 2001, more than 500 Israelis and Palestinians were killed.

Politically, the Palestinian Authority was led by a terrorist who stole from his people and walked away from peace. In Israel, Ariel Sharon was elected to fight terror and pursue a “Greater Israel” policy that allowed for no territorial concessions. Neither side could envision a return to negotiations or the realistic possibility of a two-state solution.

Elsewhere in the Middle East, Saddam Hussein had begun his third decade as the dictator of Iraq—a reign that included invading two neighbors, developing and using weapons of mass destruction, attempting to exterminate Marsh Arabs and many Kurds, paying the families of suicide bombers, systematically violating U.N. resolutions, and firing routinely at British and U.S. aircraft patrolling a no-fly zone.

Syria continued its occupation of Lebanon, with some 30,000 troops on Lebanese soil. Libya sponsored terror and pursued weapons of mass destruction. And in Iran, the prospect of reform was fading, the regime's sponsorship of terror continued, and its pursuit of nuclear weapons was largely unchecked.

Throughout the region, suffering and stagnation were rampant. The Arab Human Development Report revealed a bleak picture of high unemployment, poor education, high mortality rates for mothers, and almost no investment in technology. Above all, the Middle East suffered a deep deficit in freedom. Most people had no choice and no voice in choosing their leaders. Women enjoyed few rights. And there was little conversation about democratic change.

Against this backdrop, the terrorist movement was growing in strength and in ambition. Three decades, violent radicals had landed painful blows against America—the Iranian hostage crisis, the attacks on our embassy and Marine barracks in Beirut, the destruction of Pan Am Flight 103, the truck bombing of the World Trade Center, the attack on Khobar Towers, the bombing of our embassies in Kenya and Tanzania, and the strike on the USS Cole.

And then came September the 11th, 2001, when 19 men from the Middle East carried out the worst attack on the United States since the strike on Pearl Harbor 67 years ago this weekend. In the space of a single morning, 9/11 etched a sharp dividing line in our history. We realized that we're in a struggle with fanatics pledged to our destruction. We saw that conditions of repression and despair on the other side of the world could bring suffering and death to our own streets.

With these new realities in mind, America reshaped our approach to the Middle East. We made clear that we will defend our friends, our interests, and our people against any hostile attempt to dominate the Middle East—whether by terror, blackmail, or the pursuit of weapons of mass destruction. We have carried out this new strategy by following three overriding principles.

First, we took the offense against the terrorists overseas. We are waging a relentless campaign to break up extremist networks and deny them safe havens. As part of that offensive, we pledged to strengthen our partnership with every nation that joins in the fight against terror. We deepened our security cooperation with allies like Jordan and Egypt, and with our friends in the Gulf. Saudi Arabia, long a breeding ground for radicalism, has become a determined partner in the fight against terror—killing or capturing hundreds of al Qaeda operatives in the Kingdom. We dramatically expanded countert-errorism ties with partners in North Africa. And we left no doubt that America would stand by our closest ally in the Middle East—the state of Israel.

Second, we made clear that hostile regimes must end their support for terror and their pursuit of weapons of mass destruction, or face the concerted opposition of the world.

This was the approach we took in Iraq. It is true, as I've said many times, that Saddam Hussein was not connected to the 9/11 attacks. But the decision to remove Saddam from power cannot be viewed in isolation from 9/11. In a world where terrorists armed with box cutters had just killed nearly 3,000 of our people, America had to decide whether we could tolerate a sworn enemy that acted belligerently, that supported terror, and that intelligence agencies around the world believed had weapons of mass destruction.

It was clear to me, it was clear to members of both political parties, and to many leaders around the world that after 9/11, that was a risk we could not afford to take. So we went back to the United Nations Security Council, which unanimously passed Resolution 1441 calling on Saddam Hussein to disclose, disarm, or face serious consequences. With this resolution, we offered Saddam Hussein a final chance to comply with the demands of the world. And when he refused to resolve the issue peacefully, we acted with a coalition of nations to protect our people and liberated 25 million Iraqis.

When Saddam regimes—regimes fell— when Saddam's regime fell, we refused to take the easy option and install a friendly strongman in his place. Even though it required enormous sacrifice, we stood by the Iraqi people as they elected their own leaders and built a young democracy.

When the violence reached its most dire point, pressure to withdraw reached its height. Yet failure in Iraq would have unleashed chaos, widened the violence, and allowed the terrorists to gain a new safe haven—a fundamental contradiction to our vision for the Middle East.

So we adopted a new strategy, and deployed more troops to secure the Iraqi people. When the surge met its objective, we began to bring our troops home under the policy of return on success. Yesterday, building on the gains made by the surge, the democratic government of Iraq approved two agreements with the United States that formalize our diplomatic, economic, and security ties and set a framework for the drawdown of American forces as the fight in Iraq nears its successful end.

After 9/11, we also confronted Libya over its weapons of mass destruction. The leader of Libya made a wise choice. In 2003, Colonel Ghadafi announced that he would abandon his weapons of mass destruction program. He concluded that the interests of his people would be best served by improving relations with America, and Libya turned over its nuclear centrifuges and other deadly equipment to the United States.

The defeat of Saddam also appears to have changed the calculation of Iran. According to our intelligence community, the regime in Tehran had started a nuclear weapons program in the late-1980s, and they halted a key part of that program in 2003. America recognized that the most effective way to pursue—persuade Iran to remove its nuclear weapons—renounce its nuclear weapons ambitions was to have partners at our side, so we supported an international effort led by our allies in Europe. This diplomacy yielded an encouraging result, when Iran agreed to suspend its uranium enrichment.

Sadly, after the election of President Ahmadinejad, Iran reversed course and announced it would begin enriching again. Since then, we've imposed tough sanctions through United Nations resolutions. We and our partners have offered Iran diplomatic and economic incentives to suspend enrichment. We have promised to support a peaceful civilian nuclear program. While Iran has not accepted these offers, we have made our bottom line clear: For the safety of our people and the peace of the world, America will not allow Iran to develop a nuclear weapon.

Third, America identified the lack of freedom in the Middle East as a principal cause of the threats coming from the region. We concluded that if the region continued on the path it was headed—if another generation grew up with no hope for the future, and no outlet to express its views—the Middle East would continue to simmer in resentment and export violence.

To stop this from happening, we resolved to help the region steer itself toward a better course of freedom and dignity and hope. We're engaged in a battle with the extremists that is broader than a military conflict, and broader than a law enforcement operation. We are engaged in an ideological struggle. And to advance our security interests and moral interests, America is working to advance freedom and democracy as the great alternatives to repression and terror.

As part of this effort, we're pressing nations across the region—including our friends—to trust their people with greater freedom of speech, and worship, and assembly. We're giving strong support to young democracies. We're standing with reformers, and dissidents, and human rights activists across the region. Through new efforts like the Middle East Peace Partnership Initiative and the Broader Middle East and North Africa Initiative, we're supporting the rise of vibrant civil societies.

We're also advancing a broader vision that includes economic prosperity, quality health care and education, and women's rights. We've negotiated new free trade agreements in the region, supported Saudi Arabia's accession to the World Trade Organization, and proposed a new Middle East Free Trade Area. We have signed Millennium Challenge agreements with Jordan and Morocco to grant American assistance in return for anti-corruption measures, free market policies, and investments in health and education. We're training Middle Eastern schoolteachers, translating children school books into Arabic, and helping young people get visas to study here in the United States.

We're encouraging Middle Eastern women to get involved in politics, and to start their own businesses, and take charge of their health through wise practices like breast cancer screening. Efforts like these extend hope to the corners of despair, and in this work we have had a lot of help, but no finer ambassador of goodwill than my wife, Laura Bush.

Finally, to advance all the principles that I've outlined—supporting our friends, and pressuring our adversaries, and extending freedom—America has launched a sustained initiative to help bring peace to the Holy Land. At the heart of this effort is the vision of two democratic states, Israel and Palestine, living side by side in peace and security. I was the first American President to call for a Palestinian state, and support—and build support for the two-state solution has been a top priority of my administration.

To earn the trust of Israeli leaders, we made it clear that no Palestinian state would be born of terror, we backed Prime Minister Sharon's courageous withdrawal from Gaza, and we supported his decision to build a security fence, not as a political border but to protect the people from terror.

To help the Palestinian people achieve the state they deserve, we insisted on Palestinian leadership that rejects terror and recognizes Israel's right to exist. Now that this leadership has emerged, we're strongly supporting its efforts to build institutions of a vibrant democratic state.

With good advice from leaders like Former Prime Minister Tony Blair and Generals Jones, Dayton, Fraser, and Selva, the Palestinians are making progress toward capable security forces, a functioning legal system, government ministries that deliver services without corruption, and a market economy. In all our efforts to promote a two-state solution, we have included Arab leaders from across the region, because we fully understand that their support will be essential for the creation of a state and lasting peace.

Last fall at Annapolis, Israeli, Palestinian, and Arab leaders came together at an historic summit. President Abbas and Prime Minister Olmert agreed to launch direct negotiations on a peace agreement. Nations around the globe, including many in the Arab world, pledged to support them. The negotiations since Annapolis have been determined and substantial. Secretary Rice has encouraged both sides by hosting a series of trilateral meetings. And while the Israelis and Palestinians have not yet produced an agreement, they have made important progress. As they stated to the Quartet, they have laid a new foundation of trust for the future.

On this issue—and on our overall approach to the Middle East these past eight years—America has been ambitious in vision, we have been bold in action, and we have been firm in purpose. Not every decision I've made has been popular, but popularity was never our aim. Our aim was to help a troubled region take the difficult first steps on the long journey to freedom and prosperity and hope. Some have called this idealistic, and no doubt it is. Yet it is the only practical way to help the people of the Middle East realize the dignity and justice they deserve. And it is the only practical way to protect the United States of America in the long term.

As with any large undertaking, these efforts have not always gone according to plan, and in some areas we've fallen short of our hopes. For example, the fight in Iraq has been longer and more costly than expected. The reluctance of entrenched regimes to open their political systems has been disappointing. There have been unfortunate setbacks at key points in the peace process—including the illness suffered by Prime Minister Sharon, the Hamas victory in the Palestinian elections, and the terrorist takeover of Gaza.

Despite these frustrations and disappointments, the Middle East in 2008 is a freer, more hopeful, and more promising place than it was in 2001:

For the first time in nearly three decades, the people of Lebanon are free from Syria's military occupation. Libya's nuclear weapons equipment is locked away in Oak Ridge, Tennessee. Places like the UAE and Bahrain are emerging as centers of commerce. The region—the regime in Iran is facing greater pressure from the international community than ever before. Terrorist organizations like al Qaeda have failed decisively in their attempts to take over nations. They're increasingly facing ideological rejection in the Arab world.

Iraq has gone from an enemy of America to a friend of America, from sponsoring terror to fighting terror, and from a brutal dictatorship to a multi-religious, multiethnic constitutional democracy. Instead of the Iraq we would see if a Saddam Hussein were in power—an aggressive regime vastly enriched by oil, defying the United Nations, bullying its Arab neighbors, threatening Israel, and pursuing a nuclear arms race with Iran—we see an Iraq emerging peacefully with its neighbors, welcoming Arab ambassadors back to Baghdad, and showing the Middle East a powerful example of a moderate, prosperous, free nation.

To help the Palestinian people achieve the state they deserve, we insisted on Palestinian leadership that rejects terror and recognizes Israel's right to exist.

The most vexing problem in the region—the Israeli-Palestinian conflict— there is now greater international consensus that at any point in modern memory. Israelis, Palestinians, and Arabs recognize the creation of a peaceful, democratic Palestinian state is in their interests. And through the Annapolis process, they started down a path that will end with two states living side by side in peace.

In fits and starts, political and economic reforms are advancing across the Middle East. Women have run for office in several nations and been named to important government positions in Bahrain and Oman and Qatar, the UAE and Yemen. Trade and foreign investment have expanded. Several nations have opened up private universities, and Internet use has risen sharply. Across the region, conversations about freedom and reform are growing louder. Expectations about government responsiveness are rising. And people are defying the condescending view that the culture of the Middle East is unfit for freedom.

There are still serious challenges facing the Middle East. Iran and Syria continue to sponsor terror. Iran's uranium enrichment remains a major threat to peace. Many in the region still live under oppression. Yet the changes of the past eight years herald the beginning of something historic and new. At long last, the Middle East is closing a chapter of darkness and fear, and opening a new one written in the language of possibility and hope. For the first time in generations, the region represents something more than a set of problems to be solved, or the site of energy resources to be developed. A free and peaceful Middle East will represent a source of promise, and home of opportunity, and a vital contributor to the prosperity of the world.

Those who ask what this future will look like need only look around. We see the new story of the Middle East in Iraqis waving ink-stained fingers, with Lebanese taking to streets in the Cedar Revolution. We see it in women taking their seats in elected parliaments, and bloggers telling the world their dreams. We see it in the skyscrapers rising above Abu Dhabi, and living—thriving Middle Eastern businesses that are now connected to the global economy. We see it in a Saudi king sponsoring an interfaith dialogue, Palestinian reformers fighting corruption and terror, and Israelis who love their ancient land, but want to live in peace.

These are striking images, and they do point the way to a brighter future. I believe the day will come when the map of the Middle East shows a peaceful, secure Israel beside a peaceful and democratic Palestine. I believe the day will come when people from Cairo and Riyadh to Baghdad and Beirut, to Damascus and Tehran, live in free and independent societies, bound together by the ties of diplomacy and tourism and trade. The day will come when al Qaeda and Hezbollah and Hamas are marginalized and then wither away, as Muslims across the region realize the emptiness of the terrorists' vision and the injustice of their cause.

Earlier this year, I laid out this vision in my address to the Israeli Knesset, and then in my address to the World Economic Forum in Egypt. It was not a Jewish vision, or an Arab vision, or an American vision. It is a universal vision. It unites all who yearn for freedom and peace in the Middle East. And if we lead, and if we persevere, and if we keep faith in our ideals, that vision will become a reality someday.

Thanks for letting me come, and God bless.

President George W. Bush was interviewed by MBC TV in Washington, DC

Q. You sat on this desk for eight years, and you took many decisions regarding our region. You launched the Greater Middle East Initiative that you want to democratize, reform the Middle East. In retrospect, do you think that vision was realized? Would you do anything differently?

President Bush. Well, I think it began—the beginning of a very difficult vision to implement. But I felt it was necessary for a couple of important reasons. One, I believe we're in an ideological struggle against people who want to achieve their ideological vision through the use of violence and murder. And I believe it is essential that you have an alternative available for people—the one I happen to believe in is based upon liberty. I don't think this is an American vision, see. And I tell people this, that I do believe there is a universal God, and a gift of that Almighty to all of us—whether we be Methodists or Muslims or nothing—is freedom. And so freedom is a great alternative.

But I also believe there's a moral calling. If you believe there's an Almighty God, and a gift of that Almighty to everybody is freedom, then I think you have to—if you can do something about it, that you have to act on that—so that moms can grow up in a society that is hopeful for their children, you know, that their children are—can realize dreams. And to me the best type of society to do that is freedom. But it's very hard, it's difficult. And so you have to plant a seed, and then you have to cultivate the seed, and eventually the crops will bloom. And we're beginning to see the crops beginning to bloom in parts of the Middle East.

Q. Sir, some people say that the war on terror is a war on Islam.

President Bush. Yes.

Q. Yet you went to the first mosque after 9/11 and you spoke there. How do you convince people in the Middle East that George Bush is not fighting a war against Islam?

President Bush. No, I know, and it troubles my soul, because I believe we're all God's children. And I hear people say, George Bush doesn't like Muslims; he wants to fight Muslims. And, first, I thank you for giving me the chance to hopefully set the record straight. But I am objecting to anybody who murders innocent people to achieve their objectives. I don't think people who murder in the name of religion are truly religious people. And secondly, I would hope that people would know that when we try to use some of our influence to help on education programs, for example, or we welcome students, Saudi students, to the United States to study here, that it's a sign of respect and a sign of my desire to reach out to all people regardless of their religion.

Q. Absolutely. I wanted also to ask you about, in the last eight years, if you look back, would you do things differently? Would you have done things that you probably thought second—for the second time, I would have done them different—

President Bush. I'm sure there will be. I mean, there's been some disappointments.

Q. Like what?

President Bush. Well, like, Abu Ghraib was a terrible disappointment. And admittedly, I wasn't there on the site, but I was the Commander-in-Chief of a military where these disgraceful acts took place that sent the absolute wrong image about America and our military.

You know, parts of Iraq—it's taken longer than I thought it would. On the other hand, I am pleased to see a multiethnic society begin to emerge. I talked to the leaders of Iraq yesterday and today and congratulated them on doing some hard work. And I love to hear their spirit in their voice.

And so I'm confident history will say, oh, Bush could have done it better here, or, Bush could have done it better there. But I think from the strategic point of view, I'm confident that the idea of moving liberty in the region, a two-state solution to help the Israeli-Palestinian issue, the liberation of Iraq, and the follow-up with—to help the Iraqis realize their sovereignty—a strong push-back against Iran—I believe when people objectively analyze this administration, they'll say, well, I see now what he was trying to do.

Q. I mean, the Arab peace initiative, it was a framework. Do you think that President-elect Obama should use it in terms of achieving peace in the Middle East?

President Bush. I definitely think it was a major breakthrough for then-Crown Prince, now His Majesty King Abdallah, to take the initiative and lay out the conditions for peace. And it is, I think, a useful foundation to help solve a longstanding problem. I do believe there will be a Palestinian state. I feel comfortable in saying that the decision—my decision to promote a Palestinian state, being the first President to do so, was the right thing for peace—right thing for peace for the Palestinians, right thing for peace for the Israelis. And His Majesty was very useful and very bold in laying out the Arab peace initiative.

Q. And what's your plans?

President Bush. Well, I'm going to move back to Texas.

Q. And what are you going to do there?

President Bush. And I'm going to, you know, write a book, I think, about what it was like to be President and some of the hard decisions I had to make. I'm going to start a institute that will promote freedom. And this will be an interesting place, particularly in regards to the Middle East, because this will be a place where there will be a forum for people with different issues to come and discuss.

You know, I would love to have, you know, Palestinians—such as the President or the Prime Minister—to come and describe to the Americans what it was like to be in that part of the world or—you know, there's just a lot of really interesting opportunities for people to come and lecture and think and talk.

Q. And in your book, obviously we're talking about foreign policy. Most of it happened in the Middle East—okay, we're off camera now.

Q. Mr. President, thank you very much for this exclusive interview with us—

President Bush. Thank you.

Q.—and thank you very much for granting us, to MEBC, and to me, personally, on behalf of Arab media. I really do appreciate it, I'm very grateful.

President Bush. Thank you. I've enjoyed working with you. You've been a very fair journalist and it's been a pleasure to have known you.

Q. Thank you, sir. You are the first American President to call for the establishment of a Palestinian state. You had hoped that you would have this state realized when you leave office. Do you think that you could have done more, do you think that you have thrown all of the weight of the U.S. behind this vision?

President Bush. Absolutely we threw all the muscle and all the weight of the United States behind the vision. I am— you know, I wish there would have been a clearly defined state by the time I left office. However, I do take comfort in a couple of things.

One, the attitude toward a Palestinian state has shifted. I think there's universal recognition in the region that in order for there to be peace, there must be two states living side by side in peace. Secondly, I am pleased that Prime Minister Olmert and President Abbas, after Annapolis, have worked very hard to narrow the differences on a variety of issues. And they have; they've made substantial progress.

Thirdly, I am pleased that there is the Arab peace plan, which is an essential part of creating the conditions for a Palestinian state to evolve. Fourthly, I'm grateful that at the Annapolis conference all Arab nations were represented—which is an important signal, because I learned a lesson in studying previous efforts for peace, that there must be regional buy-in. In other words, the nations in the region must stand with the Palestinians, in particular, and say this is—we support you.

And so—and fifthly, by the way, I am pleased with the progress being made to help the development of an infrastructure in the West Bank. Prime Minister Fayyad has asked for help. A lot of nations are helping, including the United States— we're helping with security measures. Generals Dayton and Jones have been very helpful. My friend, Prime Minister Blair—former Prime Minister Blair, who was here the other night for dinner—and I talked about the economics that are beginning to take place in the region. In other words, a state can be defined on paper, but it also has to be defined in a civil society and a strong economy, and it's beginning to happen.

Q. How do you see the Palestinian issue evolving in the next few years? I mean, Prime Minister Tony Blair said, actually, there's no peace without Gaza—and I guess that means Hamas, as well. Do you share that vision?

President Bush. I share the vision that the only way there's going to be peace is where those who assume that violence is necessary to achieve peace cannot be a part of the process. In other words, people have to renounce violence in order to have peace. It's contradictory to say, I am going to use violence to achieve my objectives, and oh, by the way, I'm for peace.

And so, ultimately, Gaza has got to be— look, Gaza has to be a part of a Palestinian state, and the Palestinian state has to be contiguous territory, it cannot look like Swiss cheese. And it's got to be a state in which the sovereignty of the Palestinian people is—reigns supreme.

Q. So you're confident it's going to emerge?

President Bush. I am. I really am. There will be fits and starts. I mean, if this were a straight line between vision and reality, it would have happened. But there's a lot of complicating factors. Obviously the terrorists create complicating factors. Secondly, politics creates complicating factors, both within the Palestinians, as well as the Israelis, as we have seen.

But nevertheless, the foundation is there. People—if you give people a choice, ultimately give them a choice between two states side by side in peace, or this unresolved dispute, what would they choose? They would choose peace. And this will happen.

Q. What will President-elect Obama pick up from where you left?

President Bush. Well, I think we've left it in good shape. We've left it with the vision intact. In other words, a lot of people now share the vision of two states. As I say, there's been progress between the Israeli Prime Minister and the Palestinian President toward what a state should look like. I think the Israelis are getting—be more comfortable with the notion that a state won't create less security for them, but more security for them. And the Arab world, because of the Arab initiative, as well as the Annapolis conference, are showing more and more willingness to be constructive partners in getting peace.

Q. The U.S. and the Kingdom of Saudi Arabia have a close strategic relationship. You, personally, have a very good working relationship with King Abdallah. Yet you don't see eye to eye on many issues. How did you resolve that?

President Bush. I think we do. I think we got—I think we agree more than we disagree. First of all, I hold His Majesty in high respect. I appreciate, for example, the religious dialogue that he instigated, and I was honored to be invited to go to New York. I thought that was a very smart way to help promote understanding, and understanding eventually leads to peace.

He is a man who understands that terrorists can destroy his own society. And so I—I don't know if the world understands this or not, but Saudi Arabia has been very firm in dealing with al Qaeda. And remember, it was al Qaeda that tried to blow up their oil infrastructure, they killed their citizens. And His Majesty knows full well that that kind of terrorism cannot coexist with a peaceful society. When I have my discussions with him, I find there's a lot more common ground than not.

Q. So there's no disagreement with the Palestinian issue with what—

President Bush. I think His Majesty— look, the Arab peace initiative actually talks about, you know, Israel solving its problems with Lebanon and Syria and the Palestinians, and there will be universal recognition when that happens. And so to me that is a very positive statement. And that the idea of a Palestinian state as part—as far as being part of the solution to the overall problem is something I believe he agrees with. I don't want to put words in his mouth because he's my dear friend.

Q. In the recent years, there was an emergence of Qatar as a regional player in many of the countries in the Middle East. Do you see that played on the— kind of at the expense of traditional allies of the U.S., like Saudi Arabia and Egypt?

President Bush. I think it's going to be very important for the initiatives instigated by Qatar to show results—for example, with Hamas. Now, Hamas—in my judgment, the violent wing of Hamas damages the prospects for a Palestinian state. Or with Hezbollah—I believe that Hezbollah is a very destabilizing influence, particularly when they resort to violence.

So what I would look for, and do look for, and would hope the next President would look for is, okay, are these initiatives bearing fruit? We, of course, appreciate, you know, our basing agreement with Qatar, and we thank them very much for that. And we would hope that they would follow through to deliver the results for peace, which is what we all want, I hope.

Q. We're going to move to Iraq. Recently, the U.S. and the Iraqi government have signed the status of forces agreement. What do you think of it?

President Bush. I think that the strategic framework agreement and the status of forces agreement is a sign that the Iraqi democracy is emerging and is healthy. There was a lot of debate on the SFA and SOFA, and there were people that were— you know, a lot of people were saying, well, this will be bad for Iraq, and others say this will be good for Iraq. And after the debate was over, it was ratified by the people's assembly, and I think that's a healthy sign. I also think it's very good to have an agreement in place that recognizes the sovereignty of Iraq and recognizes that the United States will be moving its forces out of cities and then eventually out of the country based upon success.

Q. In retrospect, would you think that this war could be averted?

President Bush. We tried to avert it. I know people say, oh, George Bush likes to use the military. That's the hardest thing for a President to do, is to put soldiers in harm's way, because I knew what would happen. And, you know, that's of course manifested when I meet with mothers of fallen soldiers, or wives or husbands. And it is incredibly sad, as I'm sure you can imagine, very emotional, to hug and to cry with families. And I've met with a lot of families—a lot—so I knew the consequences. I really did.

And I was hoping that through diplomatic pressure that we would be able to resolve this issue peacefully. And I remember—you can't take this Iraq out of the post-9/11 context. We'd been attacked and here's a man who I have said repeatedly, you know, was not directly involved in 9/11, but had used weapons of mass destruction and had supported terror and had paid the families of suicide bombers and was a sworn enemy of the United States and had invaded two countries and had ignored—you know, 17 or however many resolutions in the United Nations. He was a threat.

But I did go to the United Nations, as you remember. “Disclose, disarm, or face serious consequences” is what 1441 said. And I firmly believe the choice was Saddam Hussein's to make, and he made a fateful choice. Then the interesting point was, after he was removed, with a broad coalition of countries, what do we do? You know, do we pick a strong man and say, here's America's guy and put him in there? Or do we work so that the Iraqi citizens would be able to pick their own form of government and their own people? And that's what we chose to do, and it's been really hard.

Q. Was it worth it?

President Bush. Absolutely. I believe a Middle East with Saddam Hussein in power today would be different, much different than the one today. I think you'd see a man with a lot of oil wealth willing to use terrorist connections to try to compete, for example, with Hezbollah.

There could conceivably be a nuclear arms race taking place, while even though Saddam Hussein did not have nuclear weapons, it is certain, at least to the experts, that he still had the capacity to make nuclear weapons. And there would be nothing more destabilizing for the Middle East than to see Iran trying to develop a nuclear weapon and Iraq trying to develop a nuclear weapon.

So I think the Middle East is a much better place without Saddam Hussein in power and the sacrifices by both the Iraqi people and the coalition forces to achieve where we are today.

Q. But some say, sir, that the removal of Saddam Hussein has bolstered Iran and make emergent as a regional superpower.

President Bush. I disagree completely with that. I think the emergence of a democratic and stable Iraq on Iran's border is in the—will help more likely keep the peace vis-à-vis Iran in the Middle East.

Secondly, what has changed with Iran is universal recognition about the dangers of Iran having a—the capacity to make a nuclear weapon. And therefore, one of the objectives of my administration is to create an international coalition all saying the same thing, which is, you have defied the IAEA; therefore, you cannot be trusted to say that you're only enriching for civilian nuclear power; therefore, stop your process, verify they stopped their enrichment process, otherwise there will continue to be international sanctions.

Q. The Iranian—recently your administration has been involved diplomatically with the Iranians. Do you think that actually, you can bring them to the international fold by engaging them diplomatically?

President Bush. We're trying to— we've offered them a way forward; it's verifiably suspend your enrichment, and we will be at the table with other nations.

And so—well, we discussed Iraq with Iran in a regional context. But we have said there is—if you want to have diplomatic relations and discussions with the United States, verifiably suspend your enrichment program. Our objective is to stop their gain of knowledge that would enable them to build a nuclear weapon, because having a nuclear weapon would be incredibly destabilizing to the region.

And so there is a way forward for them to have diplomacy. But it's their choice, and thus far, they have not chosen to do it. And I regret that our relations are with Iran are this way, because I have great respect for the Iranian people and the Iranian history. And I know that they can have a better future with the rest of the world, if their leadership were to abandon its desire to learn how to build a nuclear weapon.

Q. I have a few questions about just Syria and Lebanon, but my time is over.

President Bush. Well, thank you for your—you're a beautiful interviewer.

Q. Thank you, sir. So can I go ahead?

President Bush. Quickly. And then I really do have to go.

Q. Sure, absolutely. I wanted to talk about Syria. Basically, the U.S. attacked Syria. But do you see—

President Bush. The U.S.—

Q. Attacked Syria recently. There was a target inside Syria that was attacked by—

President Bush. Allegedly, yes.

Q. Allegedly. But do you see this kind of tension will secede [sic] soon, or do you see the U.S. diplomatically engaged in Syria?

President Bush. First of all, we discussed no operations. Secondly, we have engaged Syria early in my administration with Secretary Colin Powell and others. And our message was, if you'd like to have better relations with us, stop housing Hamas, violent Hamas; stop destabilizing the democracy of Lebanon; stop facilitating the flow of terrorists into Iraq; be a constructive neighbor to countries, and we can have better relations. And they have, thus far, chosen to do that. Again, there is a way forward.

But my worry about just sitting down with people and hoping that they end up behaving differently is that oftentimes it reinforces behavior that is not in our interests. And so I believe in conditional diplomacy. Now, there is a lot of multilateral diplomacy going on out of this administration. But in this case, just like Iran, we will have diplomatic relations if you choose, but there's got to be behavioral change in order to justify it.

Q. And can you stabilize Lebanon?

President Bush. I've been trying to— one of the great successes has been to get 30,000 or so Syrian troops out of Lebanon. I think one of the real keys to peace in the Middle East is Lebanon. And Lebanon is a democracy. I've met their President recently here in the Oval office, which—had a very a good discussion. I've been very impressed by Prime Minister Siniora's courage and boldness. We want to help Lebanon have an armed forces that are effective, so that they can protect their people. And we have been working very hard for seven years to free Lebanon as much as possible from foreign interference, so that its democracy can grow and mature, and be a stable contributor to the region.

Q. How would you like the people in the Middle East to remember you?

President Bush. I would hope they would remember me as George W. Bush, as a man who respects their religion, respects human rights and human dignity, and prays for peace.

Secretary Condoleezza Rice was interviewed in an AP roundtable in Washington, DC

Secretary Rice. Well, I thought that we'd spend a few moments discussing the work that we're going to do in New York. I'll leave in a few minutes to go to New York. Today, we will have a meeting that the British are sponsoring on Zimbabwe. And the purpose of that meeting is to review the situation in Zimbabwe, but I think the position of the United States is well known on this, that we've had sham elections there, we've had sham power-sharing talks, and nothing has come of it. And instead, we have a deteriorating situation in Zimbabwe on the political front as well as on the humanitarian front.

I've spent some time talking to various leaders over the weekend, but sooner or later the region, in the form of the SADC organization, and the regional states will need to bring more pressure to bear to resolve the situation in Zimbabwe. This simply can't go on. And the countries of the region are at risk as well when you have something like a cholera epidemic. But of course, it wasn't just cholera. It was, before that, the problem of migration, of refugees across the border. And so I expect a thorough discussion and report on what people have seen there.

The United States is doing everything we can to help. And in fact, I talked this morning with Henrietta Fore from USAID, and she reported that with good international effort, people are doing everything they can to get a handle on the situation in terms of the cholera. But we're really, at this point, putting plugs in a dyke because the underlying problem is that the Mugabe regime has really lost all authority to continue to rule in Zimbabwe. And so—or Mugabe himself has. And so we are going to need to look at that situation.

We'll spend the rest of the day on Middle East affairs. There's a Quartet meeting. And we had the Quartet in Sharm el-Sheikh, which was historic, when we heard from the parties about their continuing commitment to the Annapolis process, their desire for international support. And at that meeting, the Quartet felt that it would be important to meet one last time during our transition, but also in the transition from the French presidency to the Czech presidency. So I look forward to that meeting, and I think we'll also meet with some key Arab states after that.

Then, tomorrow, there will be a Security Council session on the Middle East. We've been working with the Russians, have co-sponsored a resolution with the Russians to adopt a Security Council resolution that is—indeed enshrines and supports the Annapolis process, the bilateral nature of the negotiations, the importance of not just negotiations but also the Roadmap obligations and building on-the-ground capacity for the Palestinian forces, security forces and institutions. And so that's a really rather simple resolution, but it does put Annapolis in that long litany now of important Security Council resolutions supporting the peace process. Again, it's co-sponsored with Russia, but I expect that there will be other states that will sign on.

Then I will attend a Contact Group meeting on Somalia, and then the Security Council session on piracy. And let me just for a moment distinguish between three elements that are related about piracy and Somalia but that are not the same issue. And there's been a little bit of confusion that I've seen on this.

The first is on Somalia, there is the question of getting a proper peacekeeping force for Somalia to give greater strength and staying power to the AMISOM force that is already there, the Africa/AU force that is already there. Ethiopian forces are there. They've made clear that they're not going to be able to stay for an extended period of time, but we are not yet ready with a Security Council resolution on the issue of peacekeeping forces because we need to—we're working to see what kind of concept of operations the DPKO would bring forward. We also are working to see what troop contributors would be prepared to bolster and buttress a peacekeeping force. So that resolution is not ready and probably won't be for some time, maybe even after the first of the year. Right now, we're trying to sustain the African peacekeeping force there, but we are—the United States very much favors a proper UN peacekeeping force there, but we're not ready for a resolution and we had no thoughts to do that during this period.

Secondly, there is the piracy issue at sea, and we will vote a resolution tomorrow on piracy. There is already a very strong resolution, 1813, which is an “all necessary means” resolution at sea, but there have been continuing questions about the legal authorities under which pirates would be held and under which they would be tried. The resolution tomorrow will deal with those issues, and the Security Council is going to have to have the Secretary General do some work because these are complicated international legal issues. But that is what the Security Council resolution is to address tomorrow.

We also believe that there needs to be— and this is the third issue. There needs to be the issue of—it's really more of a kind of “hot pursuit” issue of land so that if pirates escape pursuit at sea they can't simply go to land and be off limits there.

Q. Is that part of the resolution?

Secretary Rice. That is—we're discussing now how that might be reflected in a resolution. It's really rather complicated, not just because of the authorities but because of the Transitional Federal Government and its status. There continue to problems even today in that regard. But we're going to have a discussion of that. I'm going to talk with my colleagues when I get there about that set of authorities. But in any case, I wanted to make clear that there are separable issues here. The peacekeeping issue is not—obviously, the problems in Somalia contribute to the piracy issue and you want to stabilize Somalia with peacekeeping, but that was never intended to be a part of today's—or tomorrow's discussion.

So that's what we'll do during this rather intense period of very heavy use of the Security Council. So, all right.

Q. Before we do the UN questions, I did want to ask you just on two things from yesterday. We had the reports on the Stuart—the forthcoming Stuart Bowen report on Iraq reconstruction, and the President's trip to Baghdad and the shoe incident. I wonder—both of those things coming at this—on—at the same time, essentially that the United States, for having spent $50 billion, has not restored services much beyond the level they were prior to the invasion and looting, and this, you know, sort of signature moment of a guy throwing a shoe and saying, you know, this is your goodbye present. What—why should-n't—why should Americans think that we have done a lasting and valuable thing in Iraq? And I know you're going to say the removal of a tyrant, but beyond—beyond the change of—

Secretary Rice. The removal of a tyrant is a pretty big thing. Look, so a reporter threw a shoe, which, by the way, is a kind of sign of the freedom that people feel in Iraq, but somehow what was missed was the extraordinary moment for the President of the United States to go to Iraq, of all places, and to be received by a democratically elected Prime Minister, a democratically elected Presidency Council, with full honors at the Presidential Palace with the Iraqi band playing the national anthem of the United States of America. I think that is far more salient than one guy who decided to throw a shoe.

And I have to say that the weight of the story is about the President being able, after all of the difficulties and the ups and downs, to go to Iraq and to receive that kind of honor with an Iraqi Government that is preparing for provincial elections at the end of January, that an Iraq that is no longer ruled by a bloody tyrant who put 300,000 people in mass graves, who used weapons of mass destruction against his own people and against his neighbors, who literally tried to absorb the state of Kuwait—for me, one of the extraordinary moments was to drive into Kuwait the last time and see the Iraqi flag flying voluntarily in Kuwait, an Iraq that will no longer be a threat to its neighbors, that has its best relations with Turkey ever, that is being integrated into the Arab community of states again, but this time as a Shia-majority, democratic government that is an avowed friend of the United States. That's what that story is about. And frankly, I think it's peculiar that any of you decided to focus on the shoe. So let me just close it there.

Now, in terms of Stuart Bowen's report, we all know that there were problems with the reconstruction, an awful lot having to do with the security situation. And there's a reason that it's been easier to do reconstruction now that the security situation is more stable. I've said several times we simply didn't have the right institution to do that—a reconstruction effort of that magnitude. In Bosnia and Herzegovina and the Balkans, we tried to do it through the UN, and it's still a problem. Whatever it is—this is 18 years later. It's still a problem. In Afghanistan, we tried to do it with the adopt-a-ministry approach, country by country, and I think we're paying for some of the incoherence of that. So in Iraq, we tried to do it through a single department of the U.S. Government, the Defense Department, which really didn't have the capability to do that.

And so what we've done is to create— or the President has created a Civilian Reserve Corps which would have all of the capacity that you would need to do that kind of major reconstruction effort. But the—we also changed the strategy to move to a more bottom-up, provincial-level reconstruction effort, focusing less on the center. And I think you'll find that the Bowen report applauds the Provincial Reconstruction Team concept and the fact that that does deliver services and governance at a local level.

So yes, it's been very hard in Iraq, and much harder than I thought. And there's been tremendous sacrifice in Iraq, and those lives are never going to be brought back. But when you see the President of the United States welcomed in Iraq by a democratically elected prime minister, who is himself a Shia but leading a multiconfessional, multiethnic democracy in the center of the Arab world and in the center of the Middle East, I think you have to say that the very nature of the Middle East itself has been changed by the American decision to finally deal with Saddam Hussein after more than a decade—decades, two decades of struggling with him as a security problem.

Q. Why do you think it was much harder than you thought?

Secretary Rice. Because I think—I know I didn't—don't think that I fully understood how broken a society this was underneath that great dictatorship of Saddam Hussein. And one of the problems that the post-war reconstruction had, or the post-war period had, is we planned, we planned a lot. We had plans for the Ministry of Health, for the Ministry of Education, for the Ministry of Agriculture, for the army, for local governance structures. And I personally remember with the Ministry of Oil, for which we planned a lot, that it just dissolved when it was— when Saddam Hussein was overthrown. It was almost as if there was—the ministries were so much his personal henchmen and not ministries in the true sense, and I think we probably underestimated that.

Q. Do you think the Administration has managed to fix the institutional failings that you described at the beginning of why it wasn't able—why it didn't work in Iraq and it hasn't worked as well in Afghanistan? Has that been fixed?

Secretary Rice. I think we've got structures that will work better now. The—in two ways. First of all, the ability to marry our military forces with our civilian component through Provincial Reconstruction Teams is an innovation. And in Iraq, they are actually embedded—the diplomats and aid workers and so forth—with the Combat Brigade Teams. And that recognizes something that I think is just—it's so true in Iraq and Afghanistan, but it's true in a lot of other places too, is there's a continuum between war and peace. It's not war, you end war, and then you start the peace. When you're doing counterinsurgency work, you very often will have to defeat terrorists, put in place governance and police structures and do the reconstruction right there on—to keep them from coming back. And so it's really something that has to be married, and I think Provincial Reconstruction Teams and the fact that they work from the bottom up, not the top down, is very important. I think we've learned that capitals are important, regions and provinces are more important.

Secondly, I do believe the Civilian Response Corps—and what happened was that the Defense Department had to try through kind of contract to go out and hire techs—people and, you know, people who could help with police training and people—and it really didn't work. To have a trained group of American civilians who almost—so, by the way, it started to devolve to the National Guard to have to do it or the Reserves to have to do it. You're never going to have in the Department of State diplomats who know how to do all of those things. It would be –would-n't make sense. And you're never going to have the numbers in the U.S. Government as a whole that you need to do those things.

But if you have Americans who, for a couple of weeks training a year plus some guarantees of what would happen if they leave their work for a year to go work on police training in Liberia or budget execution in Mosul, you have a cadre of people to whom you can turn. And I think, you know, we did our best with insufficient structures. But when you realize that probably the biggest threats that you're going to face are going to be failing states—not strong ones, failing states—then the need to help states build capacity becomes a real national security priority, and you have to organize differently to do it.

It's not soft power. I don't think that's the right term for it, because actually it's the marriage of security and capacity and governance that makes states strong and stable. And I think we now have the right structures to do that. And the President requested in the '09 budget 1,100 new Foreign Service officer and 300 new USAID workers and full funding for the Office of Stabilization and Reconstruction. And I believe the new team will carry that forward. But we've done a lot of work to get these structures right, and I think they finally are.

Q. But the cost in terms of lives and in terms of the money and the abuse of money—(inaudible) was money wasted, there was money that was siphoned off, corruption and that kind of thing, you're—

Secretary Rice. Not of American money. Not American money. I don't think that you will find that anybody is arguing that there was corruption in the American programs. The programs didn't achieve many of the goals that they wanted to achieve in terms of, you know, bringing electricity up, but let me just give you an example on electricity. If we had the best reconstruction program in the world, the fact that Saddam Hussein used his power grid to produce 100 percent coverage in Baghdad and as little as 8 percent coverage in some other places, capacity in other places, you would not have been able to deal with that problem. So what happened was that we started out with expectations about what was needed in terms of electricity, learned that, in fact, you didn't have enough electricity to cover the country in an even way, even-handed way—yeah, you could light up Baghdad, but you couldn't do the whole country because the grid was so creaky from years and years of lacking in investment, and way the way, also because of the sanctions themselves—the sanctions under which we had—the Oil-for-Food sanctions had deprived Iraq of a lot of contact and capacity. It was a system that was just very, very broken.

Q. Well, I was going to ask that—you believe that the cost in lives and money was——was worth it for the result that we see yesterday that the President had a shoe—

Secretary Rice. I think nothing of value is ever won without sacrifice. And as I said, you know, it's—I think those lives will never return. But the Middle East was the place from which the most devastating attack against America came. And you could have taken this in the narrowest way, which was to try to bring down al-Qaida, which we have gotten—tried to do—I mean, we have tried to bring them down. They're not yet down, but they certainly are not the same organization that did 9/11.

But ultimately, you weren't going to deal with this terrorist problem unless you started to change the very nature of the Middle East itself, and Iraq is at the center of that.

Q. Do you think that the Middle East remains the greatest threat incubator or has that shifted to Pakistan, Afghanistan, and Somalia?

Secretary Rice. You know, I actually think the Middle East is far better in this regard than it was when we came on all— on many fronts, whether it's the Palestinian-Israeli side or Iraq or the fact that Saudi Arabia, which really didn't take on its terrorism threat until really May of 2005 and now has become extremely aggressive against it.

Yeah, I think the Middle East is a—is far less the place from which there are threats. Now, yes, there are problems in other part of the world. But in an ideological sense, a philosophical sense, for al-Qaida to have to fight its wars or its terrorism from the periphery of the caliphate, rather than from its center, is not inconsequential.

Q. A couple questions: On the piracy part of it, why do you think, if you do, that having authority to pursue pirates on land is a good thing? And secondly, the broader question about Somalia, with the strength—the recent strengthening of the insurgency essentially has control of a large section of the country. It kinds of looks in some ways like it's going in the direction that Afghanistan went, in the sense of the—you know, ten years ago or more—with losing control of a failed state (inaudible). And are you concerned that you're leaving—the Administration is leaving with a country that's going in the wrong direction would you say?

Secretary Rice. No, I would argue that one the other way: Where did we come in on Somalia? I think some positive things have happened in Somalia. It's been touch and go and it's always very, very fragile. But you know, two years ago we were talking about no—the government, the Transitional Federal Government, was sitting across the border in Kenya. It couldn't even get in. And you'll remember that there was the Ethiopian Christmas offensive against the Islamic Courts. That was two years ago, when we were talking about the Islamic Courts in control of Somalia.

So again, it is not where it needs to be. But I do believe that if you can get a peacekeeping force that has some staying power—and the Ethiopians essentially don't want to stay in Mogadishu. And I— you know, they're a lightning rod there, and we understand that. But there are also Ugandans and Burundians there and there are other states that may be prepared to bring their forces in, but I think they won't do it unless there's a blue helmet. And that's why we've been pressing for a concept of operations from DPKO. You could then take the concept of operations and gather enough troop contributors and then go for a Security Council resolution. So I have to say: Yes, I worry about Somalia, but we've done a lot of countert-errorism work there in conjunction with the East Africans. I think we've made it difficult for terrorist leadership to congregate there, through counterterrorism efforts that we and the East African states have carried out. But it hasn't been an easy—it hasn't been a governed place since 1993.

Q. Well, on the pirate question—

Secretary Rice. So let's put this in the right perspective. Yeah.

Q. Why would that be a good thing?

Secretary Rice. You just don't want them to be able to escape capture or consequences at sea and go to land into which it is admittedly a space that is not very effectively governed. So it's going to be important to have some kind of authority to deal with it on land.

Q. Are you confident that you have full Pentagon backing for that operation?

Secretary Rice. Well, the—we have had several principals meetings, and the Pentagon has been in the meetings, and the principals have decided that this is something that we wish to pursue. And we wouldn't be pursuing it at the UN if we didn't have NSC, National Security Council, backing to do it.

Q. But there have been a few notes of caution since the—

Secretary Rice. Look, I'm cautious, all right. I'm very cautious. And nobody wants to suggest that what we are talking about here is putting American or anybody's forces on land. Everybody has the image of '92, '93, including me. And that is not what's being talked about here. And I don't think anybody wants to get into a situation in which forces are trying to— other than peacekeeping forces, are trying to operate on Somali territory.

Q. Have you asked the Ethiopians to stay on? And, if so, will they stay on a little bit longer than the December 31st deadline, because if they—

Secretary Rice. That's my mike. It's not a good thing to mess around with. I'm—

Q. Because if they leave, the—that force basically collapses. You're right that Uganda and Burundi are there, but they've been very small numbers.

Secretary Rice. Yeah, and they've been very clear that they need Ethiopian support. That's why we've got to work more rapidly toward this peacekeeping—

Q. Right. I mean, they're talking about pulling out by the end of the year. Is that—

Secretary Rice. Well, I—we're trying to talk to everybody to see if there's a prospect that this peacekeeping force can get done relatively soon, that we can hold the forces in place until it's done.

Q. And—the Ethiopian force—

Secretary Rice. Including, yeah.

Q. Do you think that the Iranian leadership has made some sort of a strategic decision to knock off some of the activities that you have accused them of in Iraq—I mean specifically the Qods Force and the EFPs?

Secretary Rice. I think that it was getting to be a very tough business, given that we pursue them and pursue them hard. Ryan Crocker told them that, when he met with his counterpart the last time, your people are not safe in Iraq as long as they're trying to harm our people. And we've carried through on that.

Q. So for their own safety—

Secretary Rice. I don't think it's goodwill.

Q. Speaking of Ryan, is he—does he still plan to leave, or are you hoping that he stays on for a period of time?

Secretary Rice. Look, Ryan has served really—he's been one of the most incredible diplomats I've ever had the pleasure to know. But I know he wants to move on, and hopefully he can do that relatively soon.

Q. Is that something, though, that you would like to address in your time left or—

Secretary Rice. We're talking—

Q.—that's something that you'd leave—

Secretary Rice. We're talking—we're talking to the incoming administration about it. But I just think that Ryan has served in a very, very difficult post under extremely difficult circumstances, and he's done it with skill and dedication and commitment and good humor. But he's made it clear that he'd like his time to come to a close, and I think we owe him—the country owes him that.

Q. Can I ask you a quick question on Pakistan?

Secretary Rice. Yeah.

Q. There have been a number of incidents recently where the supply convoys—American supply convoys have come under attack. Is there a need to consider alternatives? And is Russian airspace an option still? Is that something you're—

Secretary Rice. Well, you know, we've worked out some arrangements with the Russians through NATO that are helpful in this regard. That's being—it's being looked at—it's being looked at with the Pakistanis. I don't have anything for you on the answer to it, but it's obviously something of a concern. There have been some significant discussions with— between the ISAF and Pakistan and the U.S. about how to deal with the situation.

Q. I wanted to ask a question on Iran and Iraq. It kind of sounds like maybe you're suggesting that you've sort of turned a corner in terms of reducing Iranian influence in Iraq, that it's a change in significance in the last—

Secretary Rice. Iran will have influence. They're a neighbor. They're a big state. They'll have influence. That's okay.

But what we have to—and we have to have—continue to work at it, it's not done yet—but Iran was training violent special groups to go after coalition forces and go after innocent Iraqis. And it came to a head in Basra, and the Iraqi security forces defeated them. They defeated them. Now, that's a major change.

Q. So if they went back to Iran, the question is will they come back? I mean, do you anticipate more trouble from—

Secretary Rice. No, I think the stronger the Iraqi security forces get, the harder it's going to be for the Iranians to contemplate something like that. Because it's one thing to deal with coalition forces; it's quite another to have to take on Iraqi security forces which are getting stronger every day and are battle-hardened and, by the way, becoming more effectively equipped and so forth. I think Iraq is not yet there, but they're going to be to the place that they can defend their borders. And so that's very important.

So, you know, there's still work to do. But I think you can argue that they didn't fare well. And when I say that their influence—when I talk about how hard they worked to undermine the SOFA and the Strategic Framework Agreement, I think you see that the Iraqis are quite an independent state and quite an independent people. And they'll do what they see in their best interest. And that's probably ultimate—by the way, the best bulwark against Iranian influence in the region— Iranian—malign Iranian influence in the region.

Geostrategically, Iraq has always been the Arab world's bulwark against undue Iranian influence in the Gulf and in the Middle East as a whole. The only problem was it was Saddam Hussein, and from time to time he would instead—yeah, he would go to war against Iran, but from time to time he would do something like absorb Kuwait, or use weapons of mass destruction, even against Iranians, and threaten its neighbors and be unable to keep control of its north so the PKK was running wild on the border against the Turks. And what has now happened, geostrategically, is Iraq is rebuilding itself as a strong Arab state. But it's a multiconfessional democracy where Shia have a decent chance for political expression— that's a first in the Arab world—where they aren't going to use weapons of mass destruction or even posses them, where their neighbors are reengaging them—and I want to reemphasize, the Egyptian Foreign Minister had not been to Iraq in 30 years. And where Iraq is still a bulwark now geostrategically against Iran, but with all—without all of the downsides of Saddam Hussein. And that's a fundamentally different Middle East. And yes, as a—you know, you get—international politics doesn't just take place in a vacuum. The structures of the international system matter. And a Middle East with that Iraq at its center is different than a Middle East with Saddam Hussein's Iraq at its center.

Q. On Russia, what do you think of a Russian warship visiting Cuba? And more broadly, aside from the bluster, has anything improved since August in relations?

Secretary Rice. With U.S.—U.S. relations with Russia—I think they didn't do in Georgia. In fact, I think it was a—we imagine that they didn't get really any of their strategic goals.

Yes, they are sitting in Abkhazia and South Ossetia, are responsible for Ossetia and South—and Abkhazia, and with the resounding support of Nicaragua and Hamas. And we're going to have to keep working on the Georgia issue. But they didn't overthrow the Georgian Government, they didn't overthrow Georgian democracy, they didn't destroy the Georgian economy, and in fact, they did little more than call into question what kind of partner Russia is.

But that said, we've had a lot of cases of cooperation since then. I mentioned the joint sponsorship of the Middle East resolution. We've had excellent help from the Russians at North Korea—with North Korea on the Six-Party Talks. We are working the piracy issue pretty closely with them. We're continuing to look at the nuclear issues with them—the nuclear arms control issues with them. So the relationship is workable, and I think at that stage—at this stage, that's a good thing.

As to Russian warships, I saw them when I went across the canal the other day. I guess they're on R & R. It's fine. The United States doesn't have an exclusivist view of our relations with the countries in the Western Hemisphere. Russia is welcome to have relations with the countries of the Western Hemisphere. I don't think that anybody thinks the balance of power has been upset, military power has been upset because there are a few Russian warships in the canal. I don't think anybody's confused about the preponderance of power in the Western Hemisphere. And I've said very clearly that, you know, a few aging Blackjacks flying unarmed along the coast of Venezuela is—I don't know why one would do it, but I'm not particularly going to lose sleep over that.

Now, where there are problems—and it is arms to a country like Venezuela, which has such difficult relations with some of its neighbors in a security sense. But we— I don't have that problem with Russia having good relations, even military-to-military contacts in the region. That's fine.

Q. Yeah, a little bit along the same lines. When Russia invaded Georgia, they moved quickly, and one could argue they moved preemptively, the President instituted a policy of preemption six, seven years ago now. Do you think that works in 2008? And is it something that this administration should be carrying forward, or are there problems with it?

Secretary Rice. Well, what the President said is, we won't allow threats to materialize against us before we act. And in the wake of September 11th, that was –necessary. I don't really think that Georgia was a threat to Russian security, and so I don't think that the argument obtains when one talks about the situation in Georgia. To the degree that their peacekeepers were in danger, they had plenty of options. I don't see where going and effectively setting up checkpoints on major Georgian roads or going to Gori was in any way associated with a doctrine of protection—protecting Russia. So I don't think the argument for Georgia makes very much sense.

But as to the question of whether or not you still have to act against threats before they multiply and become—and there's an actual attack, I don't think there's any doubt that that is something that the United States will want to maintain and, by the way, has had as a policy for many, many, many years in the past. It's a question of how—no one will want to let threats materialize. It's a question of how imminent do you think a threat is, and the point the President was making is in the modern era, with terrorists and potentially terrorists with weapons of mass destruction, the question of imminence has to be looked at differently.

Q. You touched on this just a few minutes ago on the Middle East, but are there a couple things that you would like to see the incoming administration tackle early, in which you think they may have a better shot of getting something done if they begin early?

Secretary Rice. I will talk to people and give them my views. But the administration will have to decide its priorities. I can't advise them on that.

I just think that the Annapolis process, because it is both bottom-up and top-down is most—the most likely chance we have to bring about the two-state solution that the President has talked so much about.

For many, many years, people tried to solve the question of the borders of the Palestinian state, what percentage of the land would Israel give, and so forth and so on. But the President's innovation was to worry a lot also about what would be the composition of that state. A state—a Palestinian state, whatever its borders, run by a corrupt, terrorist-associated Yasser Arafat was unlikely to be a net addition to peace and security in the Middle East.

Now, a state that is run by Mahmoud Abbas and Salam Fayyad that has decent security institutions, decent economic institutions, a government that isn't corrupt, a government that really has renounced violence, that isn't dealing with terrorists, that's fighting terrorists. That composition, when you finally do determine the borders, is likely to be a net contributor to peace and security in the region. And that's why Annapolis tries to deal with both parts of this. And it's no secret that one of the people who has been most involved on the—the building the institutions bottom-up is Jim Jones. And so I think they'll determine their own priorities. But the international community has blessed and the Arabs have blessed this structure, and I think in some form, that is the basis on which eventually a Palestinian state will be born.

Secretary Condoleezza Rice, Secretary General Ban Ki-moon, and Minister Sergey Lavrov delivered these remarks in New York, NY

Secretary General Ban. Thank you very much. Good evening, ladies and gentlemen of the media. The Quartet has just completed its discussions and will soon be meeting with ministers and representatives of the League of Arab States. I will distribute the Quartet statement in a moment, but I would just make a very brief introduction.

On behalf of the European Union, the Russian Federation and myself as Secretary General of the United Nations, and also other Quartet participants here, I want to thank the outgoing U.S. Administration, in particular President Bush and Secretary of State Dr. Condoleezza Rice, for their efforts to advance Israeli-Palestinian negotiations in the context of Annapolis peace process. These efforts have been tireless and are continuing. A very important progress is underway. We are united in our conviction that it must be continued and intensified in the period ahead.

In this respect, we look forward to working closely, from the outset, with the administration of President-elect Obama to achieve the goal of a two-state solution and comprehensive Arab-Israeli peace.

Thank you very much. We'll be ready to answer your questions. Thank you.

Q. Harvey Morris for the FT, and I'd like to give the traditional welcome from the UN Correspondents Association and to thank the Secretary General, Secretary Rice, Minister Lavrov, and our other distinguished guests for sparing us some time today, which agreeable task allows me to ask the first question, which I'd like to put to Secretary Rice.

Madame Secretary, the Quartet statement and also the text of a draft resolution that we've seen, which will come up for debate in the Security Council tomorrow reaffirms support for a two-state solution in the Middle East. I know you won't speculate on the outcome of the Israeli election, but let's say hypothetically that Mr. Netanyahu wins. He's not someone who has traditionally supported such a solution, certainly not in the terms that members of the Quartet would understand it.

What pressure can be brought either by the Quartet or by individual members of the Security Council to ensure that a future Israeli government will commit itself to this outcome?

Secretary Rice. Thank you. Well, first let me note that the—a lot has happened since really 2003 in terms of the broadening of the base of support in Israel for the two-state solution: the acceptance of the Roadmap by the Israeli Government; the participation in the Annapolis process. And I think that one has to go back really to the father of the settlement movement and, at the time, the Likud prime minister, then founder of Kadima, Ariel Sharon, to see that the two-state solution is one that I believe has really broad acceptance. And I've heard that from Israeli leaders across the political spectrum.

What the resolution will do tomorrow— and I want to thank my Russian counterpart for Russian co-sponsorship of that resolution—it was really conceived by the Russian Federation and the United States and the other members of the Quartet supporting. What that resolution does is to put the international community on record in believing in the irreversibility of the Annapolis process—bilateral negotiations toward a two-state solution, a comprehensive solution, and the various principles of Annapolis and what the parties have established since then. And I believe that that will then add the voice of the international community through its most powerful and its most consequential body—that is, the Security Council—to establish Annapolis as the way—the Annapolis process as the way forward.

Obviously, Israel will have a prime minister one way or another after February, and the Israeli Government will have to chart a course. But I believe that the international community will have done what it can do in the strongest possible terms, and that is to put the weight of the Security Council behind not just the two-state solution but a particular process for getting there. And I might just emphasize that Annapolis, of course, is not just a top-down—that is negotiated process toward the solution of two states, but also a bottom-up process of Roadmap obligations and of improving life for the Palestinian people on the ground. And that is really the reason for the resolution tomorrow.

Q. Yes, my (inaudible) Rice and to Mr. Lavrov. Is this resolution you're presenting tomorrow an alternative to what many people see as the failure to establish a Palestinian state by 2008? And, sir, Mr. Lavrov, what about the situation in Gaza, the settlement activity, and many reservations which the Arab side has to this resolution you've co-sponsored? Thank you, sir.

Secretary Rice. I believe that if you look at the language of Annapolis, it says that the parties will make the best efforts that they can—they could to come to an agreement by the end of the year. I think they have made best efforts and they continue to make best efforts. And so what this resolution does is to urge, as the parties did with us and the Quartet when we were in Sharm el-Sheikh, the continuation of this process to the conclusion of a comprehensive agreement, and also within the context of a broader Israeli-Arab peace. And so that is the reason for the resolution.

But I'd just like to take one moment to speak to the question of not having achieved an agreement by the end of the year. They won't achieve agreement by the end of the year, but they have achieved a good deal of progress in their negotiations, a good deal of progress in the work that is being done on the ground. And I would just remind that this is the first time in almost a decade that Palestinians and Israelis are addressing all of the core issues in a comprehensive way to try to get to a solution. And if that process takes a little bit longer, so be it. But we are very much further along, certainly than we were in 2001, and I would argue even than we were in 2007 when Annapolis was concluded.

Foreign Minister Lavrov. Thank you. I can add that altogether we are firmly committed to continuing negotiations, and in this regard we have laid out appropriate arrangements, including in the statement that has been circulated today, and in the draft resolution that is being tabled for consideration by the Security Council tomorrow.

And in these documents, there is a reaffirmation of our position, including on the crisis over Gaza and with respect to the settlement policies that we do not support and we call for an ending of that. And with respect to Gaza, we met today with—and discussed this quite in detail with the participation of Tony Blair, and we have specific plans that we will implement. And the main thing is that we have this draft resolution that together with our U.S. colleagues we have tabled in the Security Council, and this lays out the continuance of the process here. If you see the text, you would see that in no way does this have to do with superseding the primary goal, which is the coexistence of two states, Palestine and Israel, within peace, stability, and security. This resolution does not change anything here; on the contrary, it is aimed at continuing our joint efforts and implementing them, including taking into account the recent affirmation by the League of Arab States the Arab Peace Initiative, which we view as having great capacity.

Q. Yes please, my question is first to Secretary Rice. Has your Administration coordinated at all with the incoming administration of President-elect Obama about this peace—this resolution itself and the direction from here on, and particularly if the Palestinian track of the negotiations is the priority for you, will it be for the next administration?

And for Foreign Minister Lavrov, would you tell me kindly what do you envision tomorrow's meetings will bring about between the 5+1 and the GCC+3 on Iran and Gulf security? Are you coming with anything in particular? Do you expect much of it? What is the Russian interest in attending it?

Secretary Rice. As is the tradition in the United States, we will certainly and are briefing the Obama administration, or the coming administration of President-elect Obama, on where we have been in the peace process, what we see its prospects to be.

But it would not be appropriate for me to speak for the President-elect and his team for how they will choose to move forward. I would simply refer you to the words that I myself have heard him speak and that all of you have heard him speak, which is that he puts a high priority on the issue of Middle East peace. But it has been our responsibility to make certain that this file is turned over in completeness and in transparency to the new team, and that's really what we've done.

Foreign Minister Lavrov. The meeting to be held tomorrow was proposed by our colleagues in the process that is called 3+3 or 5+1, that Arab countries have shown well-understood interest in this theme, and it is in everyone's interest and their interest that there be no worsening of the situation in this area. Therefore, we will take part in this meeting, we will clarify those principles that were agreed upon in the format of the work on the Iran nuclear program, and we will advocate that these principles be implemented.

Particularly for Russia, we are firmly committed to the need to use this process in order to support with all possible means via the Security Council, the UN, and via other channels, support the work of the IAEA. We will avoid any steps that would complicate that or make it impossible. And on these terms, we will then tomorrow talk with our Arab partners, who, I repeat, are showing well-based, justified, and understandable interest in this theme.

Q. Yes, my question is for Mr. Secretary General. My name is Catherine Mercier from CBC News Radio Canada. I'm sorry, it doesn't have to do with the Quartet. My question is regarding the abduction of Canadian Robert Fowler in Niger. He was a special envoy. What do you know about what happened to Mr. Fowler?

Secretary General Ban. I am also concerned about that. We are doing all our best efforts about his whereabouts. We are now mobilizing all necessary information networks on this. We will keep you informed about that.

Q. (Inaudible) on a special mission for his—on—as special envoy for Niger or on illicit arms?

Secretary General Ban. I do not have any detailed information, I'm sorry to tell you. But I'm also very much concerned about, you know, I've been informed— briefed about this incident. We are doing all best efforts to identify, first of all, his whereabouts and what's behind it. We will let you know. Thank you.

Q. Thank you. Hello, yeah. This is a follow-up on Harvey's question, specifically what Netanyahu has been critical of in the Annapolis process is the idea that the core issues, all the core issues, should be upfront. And that is very much in this proposed resolution. What do you think of that?

And also for Ms. Rice, how do you envision your namesake, Susan Rice, and your successor, Hillary Clinton, getting along in the new administration?

Secretary Rice. I'm not certain who the first part of the question was directed toward. I'm not going to get involved in internal Israeli politics. They're in an election campaign. The Israeli people will make their choice. They'll debate all of these issues as is befitting a great democracy, and so I won't comment on any specific comments that various parties have made.

I will simply underscore again that, as the President has said, President Bush has said, and as Annapolis acknowledges, it is really only possible to get to peace through dealing with all of the core issues. And that is why Annapolis lays out what it lays out. But I don't think it's appropriate for me to comment on any specific statements that people have made during this time.

I know Senator Clinton very well. I have known her since she brought her freshman daughter to Stanford when I was the Provost of Stanford. She is someone of high intelligence, great integrity, and, in fact, has what one needs most in this job, which is a profound commitment to the United States, its interests, its values. And I think many people here know her from having been very involved in UN affairs when she was First Lady, and of course, she was Senator from New York as well. And so I think she will do a really very fine job as Secretary of State.

And as to Susan Rice, Susan Rice was a student when I was at Stanford. There seems to be a theme here. And we know each other well. She is also somebody who is highly intelligent and will work very hard. And I think she will put her heart and soul into the UN, because she's a great believer in this institution and in what it can do.

I do believe that—now, not speaking for my successors, but I do think that the United Nations over the last several years—in particular, the Security Council—has been asked to do some very difficult things. And sometimes it's succeeded and sometimes it has not. And if the United Nations and the Security Council, in particular, are going to keep the mandate for really defending international peace and security, it will have to do hard things, not just the easy ones. And that is not always easy, because obviously it's not easy to get all of the Security Council members to agree, or even the Perm 5 to agree. But I think we've established a record in the Bush Administration of working very aggressively and very actively in the Security Council to ask it to do hard things, and I don't think that's going to change going forward.

Q. The Diplomat Magazine, Moscow. The question is to all the ladies and gentlemen taking part in this press conference, how efficient is the Quartet in doing its job, and how important are the decisions taken today? Thank you.

Secretary Rice. Our leader.

Secretary General Ban. I think the Quartet has been proven to be very effective and efficient and very cooperative among the Quartet principals. And since we have established this format, we have been meeting quite regularly, at least several times a year during the last several years. And particularly since the Annapolis peace process was launched November last year, we've been meeting very closely to accelerate this peace process. And this—the meeting, together with our partners, which we have newly introduced, that has been also very much important, working together with the Arab partners. I'm sure that we will continue to promote the acceleration of Arab Peace Initiative, even with the transition of government in America and Israel and the Palestinian. You can have full support and assurance from us. Thank you.

Q. Sylviane Zehil, L'Orient-Le Jour. Madame Secretary—Madame Secretary, when you started your tenure as the secretary of state, you were much more into new democracy in the Middle East. What do you think you achieved when you look back? What do you believe you achieved in this matter, in this field, particularly in Lebanon and in the Middle East, please?

Secretary Rice. Well, thank you. First, let me say that the United States has long been a country that believes that its values and its interests are intertwined, and that America is safer when democracy is on the march, and we are more vulnerable when it is not. Our best friends and partners, of which we have many, are states with which we share values. It doesn't mean that we aren't able to cooperate with states where we simply share interests, but our strongest partners are those with which we share values.

The one exception to the view that our values and interests were inextricably linked had really been the Middle East, where I think we had really focused more on stability at the expense of values. We didn't talk much about democracy in the Middle East. And I think as a result, we probably contributed to what the Arab Human Development Report called a freedom deficit in the Middle East, where really as Africa and Asia and Latin America and certainly Europe moved further and further along the lines of representative, pluralistic, popular legitimacy with governments, the Middle East was not moving in that direction. But I do believe that because of the President's emphasis on the Freedom Agenda, the conversation is different in the Middle East today than it was in 2001 or even in 2005.

One can go to the Forum for the Future and hear the voices of civil society throughout the Middle East being empowered—an institution that the United States with Arab partners created. One can sit, as I did the other day, and be with Palestinian leaders who are working with youth and youth centers and English language and really even sports, and listen to their hopes for their democratic state of Palestine. One can, as President Bush had the chance to do yesterday, be received by the democratically elected president of a multiconfessional, multiethnic Iraq—something that I think was unthinkable just a little while ago.

And as to Lebanon, one has only to go back to 2005 and recognize that this is now a state where Syrian forces are no longer in Lebanon, where Lebanon has elected a president of that country, where there is a democratically elected prime minister of that country, where they are in a national dialogue about how to put all of the arms of the country under one authority, where as a result of the good diplomacy after the war of 2006, the Lebanese army is now deployed throughout the country and is a truly national institution, where Syria and Lebanon seem ready to establish proper relations between them as two independent states, and where by no means are the problems of Lebanon finished or resolved, but where I think people speak of a sovereign and independent Lebanon in ways that I did not hear just a few years ago. And that is something of which I am immensely proud and very gratified, but it is not principally because of the policies of the United States. It's because of the toughness and insistence of the Lebanese people in finally having their sovereignty and their independence.

Secretary Condoleezza Rice delivered these remarks in New York, NY

Secretary Rice. Thank you very much, Mr. President, and thank you, Secretary General. Colleagues, the situation today in the Middle East is very different than when President Bush came to office in 2001. At that time, the Camp David effort had collapsed; Israelis and Palestinians were in a vicious cycle of violence; suicide bombers were murdering innocent Israelis in cafes and restaurants and at Passover Seders, leaving the rest of the population living in constant fear; Israeli military incursions left scores of Palestinians dead and wounded, neighborhoods destroyed, and the economy in shambles. No image better captures that desperate time than the siege of the Church of the Nativity in Bethlehem.

And yet, in spite of those tragedies, the cycle of violence continued. Each time a ray of hope penetrated the darkness, it was snuffed out by intolerance. Reforms within the Palestinian Authority in 2003 inspired hope that the Palestinians would finally have the leadership they deserved, and yet these reforms proved to be superficial.

Yet this hope—and the hope proved to be deceptive. Yet Palestinian elections in January 2005 and Israel's disengagement from Gaza later that year offered yet another opportunity for progress. But the victory of Hamas, a terrorist group committed to the destruction of Israel, in the 2006 elections in that summer, and then the war in Lebanon, ended that hope.

Finally, in 2007, after Hamas had usurped power in Gaza, it was clear to all that there was no alternative to President Bush's vision of a state of Palestine and a state of Israel living side by side in peace and security. Building on this new dynamic, President Bush convened the Annapolis conference in November of last year, the first major Middle East peace conference in 16 years, and the only one of its kind to be held on U.S. soil. Representatives of over 50 countries, including 14 Arab states, sat with the Israeli Prime Minister, Foreign Minister, and Defense Minister to pursue a different future for the region.

Since that day, Israeli and Palestinian negotiators have bravely demonstrated their commitment to peace through continuous bilateral and substantial negotiations on all the core issues. They made the strategic choice to, as President Bush has said, defeat an ideology of hatred with an ideology of hope. The support of the United States and the international community for the parties' efforts has not been sustained by false hope or ignorance of the challenges, but by a genuine belief in the sincerity of the parties' commitment, in the progress they have made and continue to make, and in the prospects for success if they continue down this path.

The United States has a national interest in the conclusion of a final treaty. And it is in the long-term interest of Israel to provide a more hopeful society for Palestinians. The establishment of the state of Palestine is long overdue, and there should be an end to the occupation that began in 1967.

Above all, as our Egyptian friends reminded the Quartet yesterday, this is a bilateral process and the two parties will have to conclude a final agreement. But it is incumbent upon the international community to provide support to their efforts and to create the political context with which—within which their negotiations can prosper.

It is for that reason that we are gathered here today to consider a resolution sponsored by the United States and the Russian Federation to chart the way forward. It builds upon the work of the international community through the Quartet, and I commend my colleagues from the UN, EU, and Russia for their service in the pursuit of peace. This resolution describes the contours of the negotiations and defines the role of the international community, which will prevent a return to violence and the hopelessness of the second intifada, when peace was a distant dream.

It has several elements. First, it confirms the irreversibility of the bilateral negotiations and endorses the parties' brave efforts. Brinksmanship and dramatic, last-minute attempts to forge a lasting peace have not succeeded in the past. There is no substitute for the Annapolis process, and stagnation is not an option. In their historic briefing for the Quartet on November 9th, President Abbas and Foreign Minister Livni described their shared vision of a Palestinian state living side by side in peace and security with Israel, and pledged to continue their negotiations even in times of political transition.

They also described the understandings that govern their negotiation and confirmed the comprehensive nature of their effort, which is to build peace both from the top down and from the bottom up. The Annapolis process has advanced under the leadership of President Abbas, Prime Minister Olmert, and Foreign Minister Livni. And these advances must be preserved and built upon. The commitment to negotiations is not a matter of lip service; it is about genuine commitment to the two-state solution and the necessary foundations of trust between the parties to turn that solution into reality.

As the Quartet affirmed yesterday, a lasting peace will result from mutually reinforcing efforts on the political track, on building the institutions of a Palestinian state, and of improving conditions on the ground. None of these tracks can succeed in isolation. As negotiations proceed, Israel and the Palestinians must ensure that life improves for millions of Palestinians. The international conferences in Paris and Bethlehem and Berlin were critical in supporting these efforts. And the U.S. has become the largest bilateral donor to the Palestinians, and we continue to support the PA with direct budget assistance, funding for high-impact projects, and promotion of efforts to link security, governance, and economic development.

Second, the resolution reiterates the importance of fulfilling obligations under the Roadmap. Neither party should undertake any activity that contravenes Roadmap obligations or prejudices the final status negotiations. The views of the United States have been made very clear in this regard, especially regarding settlement activity. At the same time, the Palestinian Authority has an absolute obligation to dismantle the infrastructure of terror in its territories, reform its security services, and end incitement. Progress is being made, but it is incomplete, and sustained political will, as well as international support, is required.

The peace and economic growth that resulted from Israeli and Palestinian security cooperation in Jenin and international support is in stark contrast to the suffering that blighted that city in 2003. And in recent weeks, the Palestinian security forces have deployed to Hebron and performed well in a volatile environment.

Third, the resolution underscores that peace will be built upon mutual recognition, freedom from violence and terror, the two-state solution, and previous agreements and obligations. It highlights the enduring importance of the Quartet principles and codifies the Security Council's backing of these fundamental principles. The threat of extremism and terrorism posed by Hamas is a threat to the Annapolis process and to the fulfillment of legitimate Palestinian aspirations. This is important to note.

Fourth, the resolution underlines that the solution to the Israeli-Palestinian conflict should be aligned with efforts toward broader regional peace. The Arab Peace Initiative is an historic proposal in this regard. And as Arab states should reach out to Israel, so should Israel reach out to Arab states.

The negotiations born at Annapolis and described in this resolution give me confidence that the goal of two independent and democratic states, Israel and Palestine, living side by side in peace and security, is not just a vision, but it is a commitment of the parties and of the international community. There can be no turning back the clock. We should only go forward from here. We have to continue on the chosen path. That chosen path will finally bring for the Israelis the peace and security that can only come from living side by side in reconciliation with a democratic neighbor of Palestine. And that path forward will finally give to the dignified people of Palestine the dignity and the humanity that can only come from living in their independent and sovereign state. Thank you.

Secretary Condoleezza Rice was interviewed at the Council on Foreign Relations in Washington, DC

Q. Okay. So, Secretary Rice, the town is pretty much abuzz over inauguration planning, and I'd like to go back to the last inauguration, where the President issued a pretty bold statement and a bold program about democracy promotion, especially in the Middle East. And you were very much involved in that early on.

Nowadays, we hear less of it, although I know you've written about it, and— but you've also made some statements like, you know, the U.S. is not an NGO—

Secretary Rice. Right, right.

Q.—and we have to balance our relations with authoritarian countries. Is that a—sort of a concession to perhaps that there's a realpolitik side of this that we should consider as well to the democracy promotion agenda?

Secretary Rice. No. The promotion of democracy is something that the United States has to stay true of, because ultimate—true to, because ultimately, our values and our interests are inextricably linked. And we've learned that whether in fact—the collapse of the Soviet Union, which was good for our values and it was terrific for our interests. And so I'm a firm believer that those are linked.

On any given day, on any day in policy, one has to balance the fact that, yes, sometimes you have to deal with authoritarian regimes. Sometimes you have to deal with friendly regimes that have not made as much progress as you want them to. But unless the United States keeps the lodestar out there of the end of tyranny and that every man, woman, and child deserves to live in a democratic society, it will fall off the international agenda. And that's what the President's speech did. And the conversation in the Middle East is fundamentally different today than it was a few years ago as a result, I believe, of American promotion of democratic values.

Q. There—just to take one example, say Egypt, which was a very prominent one—there's concern, though, that were maybe mixed signals that the U.S. was going to be maybe more supportive of really pressuring Egypt on democratic reforms. But when it came down to it, Egypt was more important on the sort of security front and being useful on the Hamas situation and so forth. How do you respond to those concerns that are out there?

Secretary Rice. Well, you have to be able to do both. On the one hand, the United States—I personally have advocated strongly for democratic reform in Egypt. Egypt is going to be better off and, in fact, more stable ultimately when Egypt trusts its people more. And I do believe that the presidential election was a different kind of election than Egypt had ever had. There was criticism of the president's policies right on the front page of Egyptian newspapers. The café talk in Egypt was extraordinary. And then the parliamentary elections were, frankly, a step back.

But I don't think you will ever have another presidential election in Egypt like the old-style presidential election. These things go in almost stepwise function. You make a lot of progress for a while and then it tends to level out and you make another jump. But what the United States has done is to support reformers, to support democracy building programs through the Middle East partnership program. I have had here reformers and women who are running for office and democratic forces. And that's what we do. We both advocate with the governments for everything from individual people to changes in law. You support reformers. But change isn't going to come all in one day.

Q. What about seeing in the region a country like Iran where there's not a relationship with the government, but there's very much interest in sort of cultivating the grassroots democratic forces there. There was—seemed to be an unfortunate response that they had to U.S. democracy promotion funding, in particular, Akbar Ganji and Shirin Ebadi and others were—who were saying—you know, was sort of tainted by the image of regime change. How do you reconcile that? How do you deal with that sort of troubling association of democracy promotion versus, you know, a threat of regime change in a country like Iran?

Secretary Rice. Well, I am a firm believer that for the most part, regime change is going to come from within, ultimately. And helping to strengthen civil society, strengthen democracy forces, hold governments accountable publicly when they take harsh measures against those forces is what the United States can do. But the United States is not going to be able to change every regime in the world.

Now when there's a circumstance like Iraq where Saddam Hussein's Iraq was a threat to the region and a threat to our interests where he dragged us into war twice and used weapons of mass destruction, and when you deal with the security threat there, I do think then you have an obligation, having engaged in regime change for security reasons, to insist that what follows is democratic.

And so the United States didn't take the easy way out in Iraq, which was to remove Saddam Hussein and just install another—another strongman. We took the harder role—road of helping the Iraqis to develop democratic institutions and they're now starting to take root.

Q. Now when you mention Iraq and Iran, it's an interesting parallel that seems to be developing, in that the latest round of sanctions is—covers dual use goods, there's increasing move to isolate Iran. You know, are we looking at going down this road of maybe some UN-monitored sanctions regime that's going to try to put Iran in a box like Iraq was?

Secretary Rice. Well, I think the sanctions with Iran are a bit different. Yes, there are UN Security Council sanctions, but they're generally against Iranian entities that are practicing proliferation or are engaged with terrorism, like the Qods Force and the IRGC funding. They go after individual assets of people who are engaged in the policies. We've tried to tailor them not to have a general effect on the Iranian people.

But what they are is they're having an effect on the Iranian economy, because Iran is not able to get the kind of investment and—investment or investment support, for instance, from countries in Europe. Western oil companies have all left. I think Total was the last one to leave. So, reputational risk and investment risk is what's driving people out of Iran. It's somewhat different than the comprehensive sanctions that were put on Iraq.

Q. In terms of trying to engage Iran, you have been in favor of—there was a movement towards opening up an Iran—a U.S. interests section in Iran. That sort of got derailed by various events in the summer. What was the Iranian—what kind of feedback did you get from Iranian official points from that type of move?

Secretary Rice. Well, we never proposed it officially. The President made an in-principle decision. We did the work. And then as you said, the Russian invasion of Georgia and then later, Iranian opposition to our SOFA sort of derailed it. But we never really asked the Iranians, so we don't know what they would have said. Sometimes we heard even in public pronouncements that they would be prepared to look at it. But this was always aimed at the Iranian people. It was always aimed at our efforts to reach out to them, to make it easier for them to get visas to the United States, to have a point of contact with the United States of America, much as our Interests Section in Havana has done.

And in the context of a pretty firm policy against the regime, I think an interests section that can be a platform for contact with the Iranian people makes sense. Now whether the Iranians ultimately would have agreed, I don't know, but I would have hoped that they would have. And had they not, it would have said something about their policy.

Q. The—just keeping on the nonproliferation front and the North Korea file, you've been dealing with this most recently—can you state what has been the value of the U.S. engagement policy that's been unfolding the last couple of years? How do you tell someone that despite this latest backsliding, this has been a worthwhile move? What are the tangible benefits?

Secretary Rice. Well, you start with the fact that they haven't made plutonium since the Six-Party agreement of September 2005. And that's an important point. They have shut down the reactor. They've disabled certain elements of it, blown up the cooling tower. It's not the permanent disablement that we look for, but it's a series of important steps. We have negotiated a verification protocol to which they've agreed. Unfortunately, some of the clarifications that they made to us privately that needed to be made so that there were no loopholes in that verification protocol, they refused to write down. And that's where things broke down.

But it also has been a value because the North Koreans are in a situation in which they are confronting Russia, China, the United States, South Korea, and Japan so that they can't just make this a bilateral problem with the United States. And the fuel oil shipments that they need, they need not just from the United States but also from South Korea, since South Korea has made clear that their relationship with North Korea depends in part on how denuclearization goes. The North can't enjoy certain benefits while continuing to stall on the nuclear file.

But I think much has already been achieved here. I think that within the context of the Six-Party Talks, you ultimately will get a verification protocol that allows us to deal with a lot of very troubling activities, many of which we have learned more about as the process of diplomacy has gone on.

Q. Let me jump to the issue of what you call transformational diplomacy, and one big aspect of that is foreign aid. There's obviously been some innovations under the MCC and just the sheer numbers of relief that have gone to places like Africa, in particular. But there are a number of experts who also say to really do this right, you have to get rid of the overlapping mandates and maybe even make a cabinet level position that's overseeing all development aid. Is that something feasible in the U.S.?

Secretary Rice. Well, it's not something that I favor because development assistance has to be a part of your broad foreign policy, which links development, democracy, and security for people. If you want to see the development of well-governed, democratic states, they have to have the kind of foreign assistance help from the United States that will allow them to deliver good help and good education for their people. And it has to be integrated with policies that give support to good governance. It also has to be in a secure environment.

So in a place like Colombia, you're talking about trade policy, you're talking about economic growth, you're talking about governance, and you're talking about foreign assistance and security assistance. That's a package. And only the State Department and the Secretary of State can bring all of those together for the United States of America. And I really would not want to be the Secretary of State who does not have foreign assistance as a tool in helping to bring about the promotion of democracy or security or nation building after conflict. I think it would be very difficult without the tools of foreign policy—of foreign assistance.

Q. So we're on the subject of what's being discussed quite a bit today, soft power, and that there's going to be seemingly a new introduction of soft power in the next administration. One aspect of that that doesn't get mentioned that much is something that I know a little bit about, is U.S.-funded broadcasting, international broadcasting. But there's a debate that's looming, especially in Congress, over whether U.S.-funded broadcasting, TV and so forth, should be a—something that evangelizes democracy or something that is purely journalism and then provides a forum with which these local— you know, with which countries can hear in their own language about things like democracy, but doesn't necessarily have the mission of democratization. How do you see that, the role of foreign broadcasting?

Secretary Rice. Well, I think that foreign broadcasting, by its very nature, it is telling the truth and it's showing the examples of democracy and giving people access to information where they wouldn't otherwise get it, then you are, in fact, part of the democratization process in these countries. Radio Free Europe and Voice of America, which—Radio Liberty, which I know well as a former specialist on Soviet Union, were admired because they told the truth. They were admired because they were contrary to the propaganda that people had ceased to believe. And in places like the Middle East, where we're fighting a massive propaganda machine about what America is, what American policies are, it's extremely important to be able to have this broadcasting. And the President has increased the money for broadcasting dramatically in his Administration.

But I just want to say one word about soft power. I don't like the term, frankly. I think what you're talking about is helping people improve their lives, how much can be done to help people to have decent lives with decent governments. And this President, having tripled foreign assistance worldwide when it had been flat for decades, quadrupled it in Africa, doubled it in Latin America; this President, who launched the largest health program in all of history, the President's Emergency Program for AIDS Relief; this President, who took on malaria and has made it a priority; this President, who has advocated for girls' education and for a decent life for indigenous people; this President, who has advocated for trade, free trade so that Colombian paramilitaries can be demobilized and get a decent job, a decent-paying job, where Colombian products can get into the American market; or this President, who advocated for 1,100 new Foreign Service officers and 300 new USAID officers in his 2009 budget; that's a policy that has used what some will call soft power. I'll simply say that it is using America's generosity and America's understanding that it is more secure when people are free from poverty and free of tyranny. This President has done an awful lot in that regard.

Q. Let me stay roughly on the subject, which is about systemic changes. There have been a lot of discussion in both parties, and experts in the military as well, about perhaps some sort of a Goldwater-Nichols approach to civilian military cooperation, in particular, nation building in Iraq and Afghanistan being the biggest, you know, case studies that we have right now. How do you see the working of those two? Is there a need for this really formal process in which you improve the coordination between the two?

Secretary Rice. Well, I think we've had very good coordination. We've learned to do this the hard way, through experience. That's why the Civilian Response Corps, the need for civilians who can be mobilized to help countries build their tax systems or their budget systems or to work with justice reform or police training, that's why that institution that now resides within the State Department is going to be probably one of the most important innovations. Because, frankly, we tried it in the Balkans through UN processes; didn't work that well. We tried it in Afghanistan through what I'll call the adopt-a-ministry, country-by-country; we're living with some of the incoherence of that now. Even though it's wonderful to have all of these countries involved, it's not really a coherent effort. And then in Iraq, the Defense Department had responsibility for it, and it really wasn't right to the task.

But giving the State Department oversight of the U.S. Government effort in this regard, but also being able to really mobilize civilians who have the specialized expertise that is needed, I think that is going to work. We've also pioneered Provincial Reconstruction Teams, where military and civilian aid workers and governance experts are all together in an area like Anbar in Iraq or in parts of Afghanistan, Kandahar in Afghanistan. That's really the way these institutions get built. You know, there's a kind of false understanding, I think, of what happened in 1947 with the National Security Act which created all of the institutions that we know. They weren't created out of somebody's imagination. The CIA was the OSS, which had grown up during World War II. The National Security Council was Roosevelt's war council, because he wanted to have better coordination. The Defense Department came out of the frustrations of the Navy and the War Department not operating very well together, and the creation of the Defense Department.

And so while I understand the desire to make all of this work better, I think that we have a lot of innovations now that need to be worked on and need to be furthered. We're learning. We've learned the hard way that counterinsurgency, which is mostly what we're doing around the world, is not war and then peace; it's a continuum. And yes, civilians and military have to cooperate better together. But you do have two very distinct departments with two very distinct missions and two very distinct sets of authorities. And what we've been able to do is to blend those through various mechanisms without really eroding the State Department's capabilities and the State Department's mission, or eroding the mission of our military. I prefer the blended strategy that we have.

Q. Which has been a bit of a puzzle, or people use the word “enigma” for Russia a lot. This particular year, there were cases that the U.S. had ongoing dialogues—Kosovo, Georgia, Abkhazia, the missile defense systems—and they all seemed to boil over this year. And some of the response has been that— you know, that the Russia file was neglected, that Russian interests were being—were not being truly taken into account, and this was allowed to get out of hand. What, in your view, is what happened and what led to these unfortunate developments?

Secretary Rice. Well, first of all, Kosovo came out just fine. The Russians didn't agree, but the independent state of Kosovo was born.

Q. It's still a divided state, though, with sort of an unclear—

Secretary Rice. Well, but the fact is the international community as a whole, I think, knew that Kosovo wasn't sustainable the way that it was. And perhaps you're not going to always have agreement on something like that.

But let me go back to the Russia issue. You know, we've had very good cooperation with Russia on global issues, whether it's terrorism or nuclear nonproliferation or, really, Iran or North Korea. We just sponsored with the Russians a Middle East resolution at the UN a couple of days ago on piracy. You name it; on the global front, we've had very good cooperation. Where we've had trouble is where it's come to Russia's periphery or the states of the former Soviet Union. Because Russia has a view that it ought to have a special role on its periphery and that that special role ought to dictate the policies of those states that are now independent. And our view is that those states have a right to an independent policy, both internally and in terms of their foreign policy. We've never believed that because the United States would have good relations with Georgia or Ukraine or Central Asia, that that somehow was a threat to Russian interests. And that's where there's been a problem.

And so when you look at Georgia, what Russia did with the Georgians was really uncalled for. But I have to tell you that the unity of the United States and Europe led to a circumstance in which Russia was denied its strategic objectives. It didn't achieve a single one. Instead, the Georgian democracy survived. The Georgian Government survived. The Georgian economy didn't collapse. Russia is stuck in Abkhazia and South Ossetia with the resounding support of Nicaragua and Hamas. Their recognition policy was a failure. And all that this did was to cause people to question what kind of partner Russia could be.

And so sometimes it's not neglect of the file; it's that the Russians see things differently. And when they do things like Georgia, I think the fact that we've been able in a unified way to frustrate those strategic objectives speaks very well for the policy.

President George W. Bush and President Mahmoud Abbas delivered these remarks in Washington, DC

President Bush. Mr. President, I'm thinking about the first time I met you—I think it was in Jordan. And I can't help but reflect on how far the process has come to bring peace to the Holy Land.

You have done a lot of important and hard work in helping the region understand the importance of two states living side by side in peace. No question this is a hard challenge, but nevertheless, people must recognize that we have made a good deal of progress. And a lot of it has to do with your leadership, and I thank you.

I was pleased to note that the U.N. Security Council passed a resolution which confirms that the bilateral negotiation process is irreversible, is—and it's a path to a Palestinian state and a path to peace in the Middle East.

And I've been looking forward to this visit. I'm looking forward to getting a briefing on not only the negotiations and the discussions you've had with Israel, but also the fine progress that's being made on the West Bank, which is a credit to your leadership and the leadership of the Prime Minister.

So welcome, sir, and thank you for coming.

President Abbas. Thank you very much, Mr. President, and thank you for finding the time to meet with us during these days. There is no doubt that we will always remember the efforts that you have undertook to promote the peace process.

You were the first sitting President who accepted as a policy the establishment of two states—a state of Israel and a state of Palestine—living next to each other in peace and security. And this policy has became a reality around the world.

And we also remember very fondly, Mr. President, the great efforts that you have undertook to convene the Annapolis Conference, after so many years of absent peace process attempts. This conference was attended by representatives from more than 50 countries from around the world, and made it a reality that the road map would be the way to go.

Now, also the Annapolis Conference talked about and promoted the bilateral direct negotiations between the Israelis and the Palestinians over the fundamental and basic issues. These basic issues, as we all know, include Jerusalem, settlements, borders, refugees, water, security, as well as prisoners. And of course, you pushed very hard for the two sides to carry out their commitments based on phase one of the road map, and to carry out their responsibilities. And you were clear about both Palestinian commitments, as well as Israeli commitments.

On the basis of your efforts, and the convening of the Annapolis Conference, two other conferences took place—the Paris and the Berlin Conferences. And during the Paris Conference, there was an agreement to support financially in a very generous way the Palestinian Authority. After that, we have seen on the ground that the West Bank was much calmer, and there was performance on security throughout that part of Palestine. And we also appreciate the efforts that were given to us in the area of security, which helped our own security apparatus to carry out their responsibilities.

Also developments took place on issues in the West Bank such as progress on security, as well as the economic situation, as well as the social conditions.

There is no doubt that we exerted efforts also to promote the peace process under your leadership during the last year. And together, we put the fundamental, basic things needed for the peace process. There is no doubt that we will continue these efforts and the peace negotiations. But everything will be based on the foundation, and that foundation was laid by you during your time in office—because we are committed to the process, and this is not a slogan or a rhetorical commitment; we are practically committed to the peace process. And we are confident all these efforts will be transferred to the new administration that will continue to do its part regarding the peace process.

Some might say that all these efforts perhaps went in vain. I happen to disagree. I believe that they have cemented the real principles that carried out the peace process and the negotiations forward. And here I have also to mention the Arab League peace initiative to promote peace, which is actually published today in a number of newspapers, including American newspapers today. And the purpose of this also coincides to cement your vision of two states, as well as the principle of land for peace.

We are here today, Mr. President, in order to express our appreciation for your efforts, and we know very well that we would not have been able to go that far in our work without your support and promotion of the peace process.

I would also like to take the opportunity to thank members of your own administration—Secretary Rice, as well as Mr. Hadley—those people who worked with us tirelessly.