Interview With Elise Labott of CNN News

SECRETARY RICE: Well, this is a really important time for the Iraqi leadership, for the Iraqi people, for Iraq itself, because they are in this process of government formation. The opportunity now to have a national unity government that can really take on and help to resolve some of the tremendous challenges that are facing the Iraqi people, it's extremely important that they get this government formed. And we thought -- both Jack and I thought that given the commitment of the United States and the United Kingdom to Iraq's future, the price that we've paid here, that it was important to come and deliver a message that the time has come to end these negotiations and to form a government.

QUESTION: As you know, one of the holdups is the question of prime minister, and Prime Minister Jafari seems to be a polarizing force. There have been messages behind the scenes from a lot of different countries, reports including the U.S., and now from his own party, SCIRI, asking him to step down. Are you concerned this is a very delicate issue; pushing too much could actually work the opposite way?

SECRETARY RICE: Well, first, the Iraqis are going to have to choose their own prime minister. That's why this is a democratic process. They need a prime minister who can be a unifying force. They need a prime minister who can represent all interests and can run a sectarian government that is capable and able to bring all people in. And they're going to have to decide how to do this.

But let me just make a point about the process they've been through. It is true that Prime Minister Jafari was selected by this party, by the coalition, the United Iraqi Alliance, which rightfully has the selection of the prime minister because it won the largest bloc in voting. But then that person has to form a coalition because they don't have enough votes to govern on their own, and that is the process that now really has to be launched and we will see where it turns out.

Our point is that however it's going to turn out, they have to get a prime minister very soon so that they can move on with the government formation.

QUESTION: Talk to me about your concern over militias. General Thurman described the militias as his single biggest concern. How big is the militia problem? Mr. Hakim, the head of security, says there are about 33 different militias, could be hundreds of thousands.

SECRETARY RICE: Well, the term "militia" is covering a lot of different circumstances here. There are some formal militias that are associated with political parties from the time of Saddam's rule and just after Saddam's rule. There are also some kind of gangland groups that have grown up. That's very true. But the best way to resolve that problem is to get an Iraqi government that can govern and govern in a nonsectarian way, that can have a strong ministry of defense and strong ministry of interior to support and oversee the training of police and an army that is nonsectarian and will act on behalf of all Iraqis. Then I think you will see the circumstances in which the militia problem -- which by the way, militias are outlawed -- you can deal with the militia problem or that government can deal with the militia problem.

QUESTION: Sectarianism is very bad right now, as you know, and some TV stations advise their viewers not to answer the door unless multinational forces are there. Thousands of families in mixed communities are leaving and even, again, I cite Mr. Hakim, he says that even if a government is formed, that that's not going to make a difference; these are long, deep-seeded tensions and how are you going to solve this?

SECRETARY RICE: Well, we aren't going to solve this. Iraqis are going to solve it. The United States, Great Britain, the coalition, the multinational forces are here to help create an environment in which Iraqis themselves can solve many of their longstanding problems. There's no doubt that this is a country where they've been associated or have been accustomed to dealing with their problems through either violence or coercion or repression. Now they're having to do it through politics and we're trying to provide the environment for that political process.

That political process, I think, will have a bigger impact on the sectarianism than many realize because once you have a government that clearly represents all Iraqis, that insists that the police not be used in a sectarian fashion, that insist that all Iraqis are represented, people will start, I think, to reassert a sense of their Iraqiness, which is one of the strengths of this country that if you get to the fabric below the political level, there's lots of intermarriage, lots of tribes that have both Sunni and Shia. They can solve this problem, but they need to start with the formation of a national unity government, and very soon.

QUESTION: Last question, Madame Secretary. Last year when you were here urging for Sunnis to be included in drawing up the constitution, many Sunnis on the streets here now think that Shia politicians are -- have too many ties to Iran and they're surprised that the U.S. has allowed this to continue. What about these talks with Iran with Zal Khalilzad? What kind of influence can you exert over Iran to get them to stop exerting influence in that country?

SECRETARY RICE: Well, first of all, the Sunni political leadership has really come a long way since that time. I've just met with some of the Sunni leaders and they really have become articulate about their interests and they're representing those interests, I think, effectively in this process.

As to Iranian influence, it's a neighbor; we expect there to be "Iranian influence." But it needs to be transparent and neighborly. Any talks that we hold with Iran or that Zal Khalilzad holds with Iran would be on the security situation here in Iraq. We have found it useful in Afghanistan to have those kinds of talks. We're not talking about broad-scale talks. We're certainly not talking about talks about the future of Iraq. The future of Iraq is in the hands of Iraqis. But at some time, Zal will exercise the authorities that he's had for quite a long time to meet with his Iranian counterpart, much as he did when he was Ambassador to Afghanistan, and as Ambassador Ron Neumann is able to do now.

QUESTION: Madame Secretary, thank you very much.