Interview by Matt Lee and Anne Gearan of Associated Press

SECRETARY RICE: Well, I don't think the NIE gives benign rendering of Iran. I think it says that the Iranians, under considerable international pressure and given the circumstances at the time, decided to suspend or halt their weapons program, their weaponization program; by the way, a covert program that they have always claimed that they didn't have. So I think there's actually a lot of work to be done to understand what was going on before 2003 and I would hope that the Iranians would be prepared to answer some questions. Since they've embraced the NIE, I assume they're embracing the entire thing. And that means that they must have had a weapons program, so there's a lot to answer for.

But the piece of the program that we've been concerned about in the diplomatic initiative that we've had is really the enrichment and reprocessing, because that allows you to make the fissile material which can then be used in a weapons program. And so I don't see it as benign at all. I see it as quite -- still quite dangerous. It is good news that they're not actively weaponizing, but it is still to be dealt with that they have an active enrichment and reprocessing program and they have a missile program that can deliver.

So -- and on North Korea, I think it's a good thing that there are efforts to help North Korea open up to the world. I don't think that there are any people in the world who are more isolated than the North Koreans and it would be a very good thing if there could be some sunshine into that world. And you know that we've been actively engaged now on the diplomacy for a number of years to try to deal with, through the six-party talks, the nuclear programs of the North Koreans, but we're not there yet. And it remains a country that is dangerously armed and a considerable threat on both the proliferation front and on its own program.

QUESTION: Does that mean that they're both then still members of the axis in good standing?

SECRETARY RICE: Look, the -- they are clearly still states about which there are significant proliferation concerns and which the dangers of not dealing with their programs would be -- it would be very irresponsible not to deal with those dangers.

QUESTION: One quick follow on Iran on the NIE. Has that reassessment undercut your leverage at all? At this point, it's been, you know, a week and you've seen a lot of allies and talked to a lot of people in the meantime. Have you seen any evidence that you're having a harder argument to make?

SECRETARY RICE: Well, I've talked to everybody engaged in the P-5+1 process and we're continuing to work on a Security Council resolution. We continue to have tactical differences with the Russians in particular and the Chinese about timing, about how broad the resolution should be, but I haven't heard -- we have not had anyone say that, you know, we should abandon the two-track strategy because of what was in the NIE.

QUESTION: So in fact, it may have actually had an -- perhaps unintended consequences, so it's actually -- has it helped?

SECRETARY RICE: Oh, I think people recognize that it didn't address the part of the issue that we're dealing with, which is enrichment and reprocessing. But I've had a couple of people say to me, well, it's important to understand what was happening in the weapons program.

QUESTION: Right. Just on the second half of Anne's first question on North Korea, presuming the 26th, when the Philharmonic plays, is going to be too early for there to be any significant movement beyond that, I'm just wondering, are you going to -- will you be disappointed that you won't be able to attend or even play? And then just on --

SECRETARY RICE: (Laughter.) I'm not practicing these days, so I'm not disappointed.

QUESTION: But on this whole idea of the thaw with North Korea and the President's letter --

SECRETARY RICE: Yeah.

QUESTION: I mean, was this the right --

SECRETARY RICE: First of all, the President sent letters to all the --

QUESTION: Right.

SECRETARY RICE: -- members of the six-party talks. And we have a process in place to try to get to the denuclearization of the Korean Peninsula and we're in an active diplomacy to try to get there. The President's letter is a part of that active diplomacy.

QUESTION: Right, but isn't this something that some might say that King Jong-il will hold up and say, you know, look, it's -- Mr. Chairman, you know, I have this. Doesn't that feed into a cult of personality in --

SECRETARY RICE: What matters is, first and foremost, that we deal with the nuclear weapons programs, all of them, completely, of the North Koreans and there's a way to do that. This is not a regime that the United States is prepared to engage broadly. If we're going to engage it broadly, it's clear in the program that we've laid out how that would happen. After denuclearization, as things move forward, there's a sort of careful way of going about this. But I think it's a good thing that we're -- you know, we've got a way ahead. Hopefully, the North Koreans will live up to their obligations and deliver.

QUESTION: On the Middle East. Today we had the first meeting of the Israeli-Palestinian delegation since Annapolis. Our report calls it a -- you know, pretty heated exchange, a relatively short one that did not produce anything specific that either side could point to afterward. Is this a setback or a return to old thinking and are you worried that you may already be losing momentum?

SECRETARY RICE: No, this is just the turbulence of negotiations. There are going to be ups and downs. And they did meet and my understanding is that they'll meet again pretty soon. They have some organizational work to do. But both of these parties are committed to moving this forward and they're going to move it forward. It's -- but you're going to have some good meetings and some not very good meetings.

QUESTION: I'm struck, though, by the difference in atmospherics. I mean, you have the leaders, all smiles and handshakes for a few days and then when it gets down to the guys who are actually going to write stuff, they're, you know, having a food fight.

SECRETARY RICE: Well, it gets hard because you start to get specific about what is required and it gets hard. Anyone who has ever been through negotiations recognizes the first few meetings of negotiations. If you sat down at negotiations and went right to the answer, you -- then you'd have a story. There is going to be a process of working through this, of putting specifics on the table, they've got to get a negotiating structure in place. I'll have a chance to talk to the parties either -- probably tomorrow, now given the late time, and I'll undoubtedly see Palestinians and Israelis at the Paris meeting as well and I'll be able to get an assessment of what lies ahead.

But I have never known, studied, read about, or participated in a negotiation that wasn't pretty tough at the beginning.

QUESTION: One follow -- you've commented a bit on Israel's Har Homa settlement plans sometime after the first news broke and I want to ask you about, what was your initial reaction to that? Did you feel sucker-punched by such a -- by that announcement so close after Annapolis?

SECRETARY RICE: Well, the first thing I wanted to know was what happened, because the -- so we sought clarification from the Israeli Government and they talked about this as something that had been long planned. But I did think that it had the potential, as I said, to -- it wasn't going to contribute to an atmosphere of confidence. It had the potential to undermine after the atmosphere of confidence.

But look, it's time to now recognize that we're in a phase where they now need to negotiate. Ultimately, the best way to deal with all of these problems is to have an agreement and firmly outline the borders of a Palestinian state. Then everybody can know what's permitted where, but -- that is the key. But it's also going to be important, as we go through what is going to admittedly be a very difficult process, that both sides -- and I want to emphasize both sides do everything that they can to live up to their roadmap obligations and to do everything that they can to enhance confidence.

QUESTION: Coming at this same issue from a slightly different point of view, you worked for two administrations who -- that have rescued two countries from the clutches of Saddam Hussein, both Kuwait and Iraq. Did it mean anything, is it disappointing to you that neither attended Annapolis?

SECRETARY RICE: Well, I -- they didn't attend for their own reasons. In the case of Iraq in particular, if they say they have lots of things on their plate, I think they have lots of things on their plate.

QUESTION: Right. Well, the Sudanese sent their ambassador. The Iraqis have an ambassador here.

SECRETARY RICE: Look, I will tell you that we invited them because we thought it would have been a good thing for them to come, but this is something that, right now, is frankly pretty far off the radar screen. I understand that.

QUESTION: For them?

SECRETARY RICE: For them, yeah.

QUESTION: The reports out of Gaza seem to be getting worse by the day. We had reports today of people dying for lack of access to medical care, a shortage of water and so forth. You've said you will not stand for a humanitarian crisis in Gaza, but do you think one is building? Are you essentially tacitly allowing one to happen because it may speed the exit of Hamas?

SECRETARY RICE: No, because innocent people shouldn't suffer because of the terrible policies of Hamas in terms of the humanitarian side. No, we're following the humanitarian situation very closely and sometimes, it requires very specific actions about what kinds of equipment, medicine, food can get in. It relates, of course, to issues of electricity where the Israelis, in their own processes, have been told to be extremely careful about making certain that there's electrical supply to Gaza. But we get reports on the situation and I know that the situation is difficult, but we don't intend to allow it to become a humanitarian crisis.

QUESTION: How much of Monday's conference do you expect to focus on Gaza?

SECRETARY RICE: On Gaza?

QUESTION: Gaza, yeah.

SECRETARY RICE: Well, I'm not the conference --

QUESTION: Understood.

SECRETARY RICE: -- convener. I assume that there will be some discussion of Gaza because everybody wants the humanitarian situation -- but I don't know what -- how the French plan it.

QUESTION: Are you confident now that the situation with the contractors in Iraq, Blackwater specifically, is resolved or taken -- that enough safeguards are in place now that something like this will never happen? And are -- do you take responsibility for this? I mean --

SECRETARY RICE: Well, first of all, I'm never going to say that nothing will happen.

QUESTION: No, I understand.

SECRETARY RICE: But prospectively, I think we've put together a good plan with the Defense Department. We've put together a good plan here inside of the Department for more oversight, for stronger training and accountability measures. I don't want to speak to the specific incident because that's being investigated as a legal matter, but of course, anything that happens in this Department, I'm ultimately responsible.

QUESTION: Let's do Lebanon. There's been another delay in the elections, and then of course today another assassination. Kind of a two-part question. First, do you think Siniora's government is salvageable? Is it dead in the water? And do you suspect Syria in today's killing?

SECRETARY RICE: Well, first of all, let me just say that the assassination of General al-Hajj is a really horrendous act and it's to be thoroughly condemned. He was obviously a patriot and it's worth saying that the Lebanese army is becoming more and more an institution of national unity and so it's extremely important to recognize that an attack against that -- against him and against the army, is really an attack against all of Lebanon and all of the Lebanese people.

Secondly, the Siniora government is continuing to function. They need a president. They need a president who is going to defend Lebanon's sovereignty, who's going to live up to Lebanon's international obligations. There appears to be a potential candidate, a compromise that is available, and it's really important that they be able to elect a president, that they be able to go and do it in the parliament. And Syria and all of Lebanon's neighbors need to play a constructive role and encourage all of their allies to let that happen and, in fact, not interfere with it. So this is a time of testing for Lebanon, but it's also a test for Lebanon's neighbors, including for Syria.

QUESTION: Specifically on who did it though, I mean, is there anything to suggest --

SECRETARY RICE: I don't -- we don't know, and I don't want to make accusations about something that happened this morning. But it seems like yet another effort to intimidate the Lebanese as they're trying to carry out normal political processes. But they're a very resolute people and I talked to Prime Minister Siniora today and he's absolutely resolute.

QUESTION: Do you want to do Pakistan, Russia?

QUESTION: Yeah, sure. Two -- and I don't want to compare it or suggest that there's a comparison between the two -- just Pakistan and Russia.

SECRETARY RICE: Right.

QUESTION: Both countries have elections coming up. Both have presidents right now who, you know, appear to have greater designs on power, at least continuing power. So first on -- I guess on Russia, I saw that you were quoted yesterday in an interview about Medvedev as a new generation. Wasn't that what Putin was as well? I mean --

SECRETARY RICE: Well, Dmitry Medvedev is 42 years old. You know, that's really a new generation. And he's a highly intelligent man and he's had a very interesting portfolio for Russia. I last saw him when I was last in Moscow. We spent about an hour and a half with him. And he was talking about the diversification of the economy, wiring the economy through the internet and so forth. So he's an interesting person.

I am concerned, I think as everyone is, with the step backward from -- step back from what appeared -- from democratic processes, because obviously one would hope for contested elections. And in order to have contested elections, you have to have a level playing field with media access and with the ability of opposition to organize and not fear arrests, as happened with the Duma elections. So whatever happens, I hope that the presidential elections will look somewhat better in that regard and that people will at least be able to contest.

So I don't know what President Putin will do. That's, you know, up to him and up to the Russians. But I'm concerned right now about the process and what clearly seem to have been some steps backward during the Duma election.

QUESTION: But you won't have any concerns about going over and meeting Prime Minister Putin?

SECRETARY RICE: Well, let's wait and see what they decide to do and who's going to be prime minister and who's even going to be president.

QUESTION: Okay. And on Pakistan then, Musharraf has done everything, or almost everything and the immediate thing, except for lifting the state of emergency.

SECRETARY RICE: And he has said that he would do that. I think it's next week. And we really want to see that happen because they need to have time for people to carry out -- to have the ability to address the public and to use the media and to go forward with campaigns. Not everybody has campaigns as long as ours. But -- and they do have pretty well-organized parties. So if the -- if they're given a chance, I think we could have an election that could be a real step forward for Pakistan in terms of its own democratic development.

QUESTION: Is it enough time if he does it by the 16th and then you have the election in January? I mean --

SECRETARY RICE: Well, it would be better to do it today, but it's going to be done as of the 16th. And as I said, these are well-organized parties. If, in fact, they can have real access to the media, no intimidation of people who want to participate in the elections and so forth, then, you know, we'll see. But I think there's a chance for an election that could move Pakistan further along.

QUESTION: Doesn't he start back pretty far in the blocks, though, from -- I mean, his own -- yes, he's taken off the uniform, but his own installation as a civilian president was blessed by a court that he handpicked because the other one wouldn't do it.

SECRETARY RICE: We made very clear that the decisions that were taken over the last -- what is it now, a month and a half or so, were from our point of view not good decisions. But we've been very focused on getting -- helping or encouraging Pakistan to get back on a path that's going to lead to further democratic development. And taking off the uniform is a good step. Ending the state of emergency is an essential step. Holding a free and fair election is an absolutely essential step. And if they do those things, it's not going to be a perfect situation but it will be much further along the road of democracy than it's been in quite a long time. Because we have to remember how long it has been since Pakistan has had elections and it is also the case that the civil society is more vibrant, the media is more vibrant, and if it's allowed to function then it could make real strides.

QUESTION: Could you identify what your number one goal is for the coming year? And this is not a legacy question because I know you don't like those, but what do you see as the biggest problem or obstacle that you will bequeath to the next administration? Is it Iraq?

SECRETARY RICE: No, I think a lot is happening in Iraq and I'm actually in -- where Iraq is concerned, it's an interesting lesson about big, historical changes because some of the most positive political developments in Iraq are in areas and in places I don't think we would have predicted. And not -- I don't just mean Anbar. I mean the kind of local and provincial development that's now beginning to put a lot of pressure on national institutions for recognition of provincial powers and needs. It's come somewhat in reverse, I think, of how we would have thought it would play out, although I remember back in January testifying that we were going to look for multiple points of success by using the PRTs to go out and try and help regional and local development. I think it's come along much faster than we would have thought. So --

QUESTION: Is that another way of saying that the Maliki government hasn't done what you were saying in that same period that they could do?

SECRETARY RICE: No, I -- well, I was just about to say, look, they still need to pass the national legislation. But the pressure to do that is -- particularly on provincial powers is actually coming from quarters that were not very well developed several months ago, and that's from provincial governors and the like. So I only say that, Anne, to say that I think over the next year there is a way ahead in Iraq that could build significantly on the improved security situation, fragile though it is, but build on the improved security situation to really have the major beginnings of a political renovation in the country as well.

I think the biggest challenge for anybody going forward for probably several administrations is going to be that this is a long-term struggle to root out extremism and to not just defeat extremism but to defeat it in a way that leaves a true stability rather than the false stability of the past 60 years in the Middle East and democratic, pluralistic, tolerant societies. I think that is really hard. And it's not just in the Middle East; but you know, the extremism that manifests in places like Southeast Asia has to be fought in the same way, and the extremism that we've just seen in North Africa in Algeria with the terrible bombings there, or in parts of Africa whether it's Somalia or parts of Nigeria. This is a really big challenge worldwide. It's one of these big pan movements that comes along in history sometimes; it doesn't know national boundaries and it really challenges the interstate system, which is slow to move in dealing with that kind of challenge.

And so I think that's something that is going to be dealt with by several administrations to come. And our goal has to be to leave as firm a foundation as we can for dealing with that, to leave the tools and the instruments for dealing with it. One of the things I'm going to be talking about a lot at the beginning of next year is we really need to have a modern civilian diplomatic corps and set of institutions that can help with the rebuilding of states, with the transformation of societies. The Civilian Response Corps that the President talked about in his State of the Union is something that we really have to leave to the next administration, just like institutions were left to -- left by those who found themselves at the end of -- at the beginning of the Cold
War, and we were therefore able to win the Cold War. I think we have to leave some of those instruments to the next team.

So that's the kind of thing that I'm spending a lot of time thinking about, in addition to, you know, Palestinians and Israelis, Lebanon, Iraq, Afghanistan, North Korea and denuclearization and --

QUESTION: Did you want to pick one of those as your top goal for next year? (Laughter.)

SECRETARY RICE: Well, I haven't finished yet. I mean, it's a long list. Finishing the Balkans through Kosovo. I don't get to pick one. You know, the one thing you really realize if you're Secretary of State of the United States, and I think this is something I will reflect on more and more, is when you talk about global reach, the United States is really global. And it is at this point really the only truly global power in the world, where we touch every continent and where almost all of the big issues and big conflicts people will come to you and say this can't be done without the involvement of the United States. And so it keeps secretaries of state very busy.

QUESTION: With little sleep. (Laughter.)

MR. MCCORMACK: Do you have one more? I'll give you one more question.

QUESTION: Well, I guess actually I would ask you to -- if you could pick among the many challenges you have one thing that you could put a period on when you leave, what would it be?

SECRETARY RICE: Well, I tend to think about it differently, Anne. I think there are several very high priorities, and if we can leave them in better shape -- obviously, the Israeli-Palestinian issue, the Annapolis process as it's now called, is a very big issue and to leave that in a much better place than it was when we came would, I think, reverberate in many important ways throughout the region. And not just the region of the Middle East, but you know, I hear from our friends in Southeast Asia like Indonesia, for instance, or Malaysia how important it would be to them.

And then I think the other big one is the -- in addition to Iraq and Afghanistan where we have special responsibilities, we've made -- this administration has made a lot of progress on the proliferation front. And leaving in place an international consensus about challenging and countering proliferation, whether it's something like the Proliferation Security Initiative or having taken down the A.Q. Khan network or having Libya give up its weapons or having at least put North Korea into a regional context where denuclearization for the first time seems possible or having, I hope, left the same kind of coalition to deal with the Iranian threat, these are big issues and I would like to see if we can't push that -- those somewhat further over the next year.

QUESTION: Great.

SECRETARY RICE: All right. Thank you.

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