12:35 p.m. EST

MR. MCCORMACK: Hello, everybody. No opening statements and we can get right into your questions.

Yes.

QUESTION: Do you have -- is there any information that you can give us about Wachovia stepping forward to offer -- to help resolve this BDA problem?

MR. MCCORMACK: Right. I don't have anything to add to what Wachovia said in its statement I saw printed in the newspaper today. We all want to see the BDA issue resolved, obviously resolved within the laws and regulations of the United States, as well as the international financial system, and we'd like to move on and get back to the business of the six-party talks, which is really focused on the issue of denuclearizing the Korean Peninsula. It's a very important objective and it's one that we hope we can get back to and impart some more momentum to those discussions.

QUESTION: But did you approach Wachovia to ask them to help and would you find it useful if Wachovia were to help?

MR. MCCORMACK: Right. I know that there are going to be a lot of -- there are a lot of -- probably going to be a lot of questions about this. I'm just not going to have anything more to say beyond what Wachovia itself has said. And we'll only reiterate that we all hope that this issue can be resolved. It's an issue that the North Koreans are going to have to work out with their bankers and we want to see it resolved so we can get back to that important mission.

QUESTION: Are you not commenting on this because you perceive this to be a Treasury issue or is it just because it's not resolved or why can't you comment?

MR. MCCORMACK: Not going to comment on something that is yet to be resolved. We all hope that it is going to be resolved. I can't put a timeline for you on it. We do know from the North Koreans, and they've stated it in public and we have also heard from them in private, that they are committed to implementing the February agreement, that they are actively working to resolve the BDA issue and you do see evidence of that reported in the press.

QUESTION: Putting aside the Wachovia element, has the State Department in recent weeks approached several U.S. financial institutions to ask for their help?

MR. MCCORMACK: Again, I'm not going to get into any more details on this issue.

QUESTION: Okay.

MR. MCCORMACK: Yeah. Okay, good, we're done. (Laughter.) No, okay. Yeah, go ahead.

QUESTION: Yes. Concerning -- especially after the President's comments today, does the Administration now believe that the -- that Paul Wolfowitz -- can he still be an effective leader at the World Bank?

MR. MCCORMACK: You heard from the President this afternoon in the Rose Garden on that matter. It's right now being discussed between Mr. Wolfowitz and/or his representatives and the governing board of the bank. And at this point, I'm not going to have anything more to say on it. Secretary Rice has previously expressed her personal high regard for Mr. Wolfowitz as well as the work that he's done at the bank, but it is now a matter that's being worked out internally in the bank.

QUESTION: Can I ask just one --

MR. MCCORMACK: Yeah.

QUESTION: I mean, not about -- I mean, obviously, everyone in the Administration has said their high -- talked about their high regard for him.

MR. MCCORMACK: Right.

QUESTION: But at this point, are you separating your high regard for him personally and for the work that he did from efforts to resolve the issue? I mean, are you having an open mind as to what the future of the leadership of the bank could be?

MR. MCCORMACK: Well, you know, again, you just heard from the President on this and I really don't have anything more to add beyond what he said, what Secretary Rice has conveyed in the past about her high regard for Mr. Wolfowitz.

Yeah.

QUESTION: Are you disappointed that the Germans came out so forcefully against Mr. Wolfowitz? For example, the -- I think it's the Development Minister said that he wasn't welcome in a forum that they had.

MR. MCCORMACK: Look, individual countries are going to come up with their own positions with regard to the World Bank, the work that Mr. Wolfowitz is doing. He's -- I don't think there's any dispute about the fact that he has an interest in the issue of alleviating poverty around the world and trying to help out those most in need. There are differences on how you go about doing that. He brought -- he brings to the bank a particular perspective. There are going to be others. Perhaps the German Development Minister will have a different approach.

But let's not confuse the issue here. This is somebody who is deeply committed to the issue of alleviating poverty around the world and encouraging development so that all peoples around the world can realize the benefits of good governance as well as increased economic prosperity.

QUESTION: But do you think it was petty on behalf of the Germans to say this?

MR. MCCORMACK: You know, I didn't see his exact comments.

Yes, sir.

QUESTION: Is Mr. Nicholas Burns going to New Delhi in this month?

MR. MCCORMACK: This month -- I haven't asked him. I know that there were some press reports about whether or not he was going to be going this week or next week. I'm not aware that he has any travel plans at this point to go to India.

Now, this comes up within the context of the 123 agreement. Where are we in that? We are working on it. We are making progress on it. It's not completed yet. But I understand that over the course of the past several weeks there have been some positive discussions on concluding that agreement. We certainly want to do that. We understand from the Indian Government that they want to conclude that agreement as well.

QUESTION: Then Secretary -- Foreign Secretary of India Shivshankar Menon was here this month.

MR. MCCORMACK: That's right.

QUESTION: You were very optimistic that this deal can be closed by this month end, so --

MR. MCCORMACK: I don't know if I said that it would be closed by month's end. I very rarely apply timelines to diplomacy because it inevitably proceeds more slowly than we would normally like. Sometimes we're surprised by that. But there is a commitment here to get this agreement done. We would like to do it sooner rather than later, but these are important issues. They're important issues for us. They're important issues for India. They're important issues for the international system that deals with matters of nonproliferation and nuclear energy. So we want to get it done in a timely manner, but we also want to get it done right.

QUESTION: Well, one --

MR. MCCORMACK: Okay. Yep, go ahead.

QUESTION: There was a news report in which State Department made a comment. Yesterday this was -- there was a news report which said once we go to New Delhi when we are ready to seal the deal and we are not at that point yet. So do you think next month?

MR. MCCORMACK: (Laughter.) Well, we'll see in terms of the timeline. Nick's going to do what he thinks is appropriate and most effective in order to get a deal done. And at what point he travels to India, he's going to make that call. But he's going to do what he thinks is most effective to getting a deal.

Yes, ma'am.

QUESTION: Can I ask you about -- on April 25th, Mr. Casey said, "We certainly look forward to continuing the discussions on this issue, but in the end we believe the Ahtisaari plan is the appropriate way forward, the right way to go and offers the best hope for the future not only for the people in Kosovo but for the people in Serbia and the broader region as well."

What is the broader region and do you have any -- is Russia still threatening to veto the arrangement?

MR. MCCORMACK: Well, I hadn't heard the Russian Government say that they're going to veto anything. They have some deep concerns about the issue. We understand that. We understand the historical ties that they have with some of the populations in the region. So part of Secretary Rice's discussions when she was just recently in Moscow was to talk about Kosovo. And the Russian Government came through with a number of different concerns it had about the pace and the manner in which this issue is moving forward. We take onboard those concerns. But the fact of the matter remains, as I have said many times -- as Tom said in the statement that you just read -- that we believe it's in the interest to come up a settlement on the Kosovo matter. It's something that's been out there for eight years now and it's time to bring a resolution to it.

We believe that Mr. Ahtisaari has formulated a plan that is the basis for a solution. I expect that there are going to be a lot of other discussions over the coming weeks and that those are going to be pretty intense discussions about what steps the Security Council is going to take and what form the Security Council resolution is going to take and what the content of that resolution is going to take. But we believe that that resolution should reflect Mr. Ahtisaari's plans. It's in the long-term interest of the region. And I think in answer to your question, he was talking about the Balkans as well as Europe. And it's in the interest of the Serbian people as well as the Kosovar people. Everybody has an interest in seeing this resolved. Everybody has an interest in seeing everybody's concerns accommodated to the extent that we can.

I can guarantee you, at the end of the day, everybody who has an interest in the issue of Kosovo isn't going to see all of their concerns accommodated; that's just the nature of multilateral diplomacy. But what we're going to look for is the best possible solution. We believe the best possible solution is one that looks like Mr. Ahtisaari's plan.

Yeah.

QUESTION: Change of subject?

MR. MCCORMACK: Sure.

QUESTION: During his press conference, the President said he asked the Secretary to be actively engaged in the Middle East.

MR. MCCORMACK: Right.

QUESTION: What does she plan to do exactly?

MR. MCCORMACK: Well, she has been actively engaged in the Middle East and you've been on a lot of the trips with her and I think you can attest to the fact that there's been a lot of active engagement on issues related to the Middle East and trying to resolve the differences between the Israelis and the Palestinians as well as working on a wider peace in the region.

She -- you could go down the list in terms of her engagement both here in the Department consulting with advisors, working on ways within the U.S. Government to move the process forward and working with the Israelis, Palestinians, Arab neighbors on how to move the Israeli-Palestinian track as well as the Israeli-Arab track forward. She's traveled a great deal to the region. She is on the phone quite a bit. She was just on the phone this morning with Prime Minister Olmert as well as President Abbas on the issue of the recent violence in the Gaza Strip. So there are a lot of different ways that she's going to remain engaged on the issue.

Travel, working with her counterparts whether they're in the region or counterparts that have -- represent governments that have an interest in the issues, stay tuned in terms of more travel. I know that that's one thing that everybody is always looking out for and people who apply that as a metric of the level of interest and the level of activity, and certainly I don't necessary buy that. But if you are going to use that as a metric, I think you can look at her travel schedule over the past several months you see a Secretary of State that's been deeply involved in this issue. And it's an issue that she has said -- in public and in private -- that she's going to devote quite a bit of her energy and focus over the remaining 18 months to the issue.

QUESTION: But she just cancelled a trip to Jerusalem because of the uncertainties around the fate of Prime Minister Olmert.

MR. MCCORMACK: Right. I mean -- and we've already said that we're going to be back there in the near future. So I wouldn't judge her level of interest, involvement and energy based on one trip that was postponed.

Yeah.

QUESTION: Do you have any plans in the near future to have another trilateral as you had previously in Jerusalem? Do you think that would help to, you know --

MR. MCCORMACK: We'll see what's effective. I think that she said that from time to time, that it's a -- it would be a useful format, useful geometry that she might employ. She'll make an assessment over the coming weeks and months when that's appropriate. I haven't heard her talk about that recently, but that might be something that she does.

Yeah, Elise.

QUESTION: How concerned are you that the recent violence in Gaza is going to -- both among Palestinians themselves and between the Israelis and Palestinians, going to set you back in terms of your efforts to move this forward?

MR. MCCORMACK: Well, the -- certainly, violence perpetrated by Hamas, as we have seen recently, doesn't further the cause of peace. What is does is -- resulted in the deaths of innocent civilians and it also underscores the importance of reaching those political accommodations on the Israeli-Palestinian track among those individuals who are committed to peace like Prime Minister Olmert, like President Abbas, and the people around him and that work directly for him.

We would hope that Hamas would make another choice; in making a choice for peace, in making a choice for a Palestinian state, because the only way that they're going to see that is via the negotiating table. They're not going to see it by launching Qassam rockets into Israel. They're not going to see it by attacking the legitimate security forces of the Palestinian Authority. They're not going to see it by sending young people armed with suicide vests to blow up other Israeli youngsters. So --

QUESTION: But you --

MR. MCCORMACK: The Palestinians themselves are going to have to resolve that central contradiction where you have a group like Hamas that is committed to the use of terror, but also says it wants to be involved in a democratic process. The Palestinians are going to have to resolve that, but to bring it back, what all the -- what the violence underscores is the fact that it is all the more important that all those committed to peace in the region work actively and do everything that they can to move forward the process of peace.

QUESTION: Would you say that President Abbas is doing all that he can to stop this violence in terms of Hamas attacks from Gaza into Israel? Because it seems as if, anyway, that this is leading to another escalation of violence between Israelis and Palestinians that will set you even -- back even further.

MR. MCCORMACK: Well, President Abbas is committed to ending violence. He has never -- he has always been somebody that has shunned the use of terror. He has counseled against it. He is somebody who has actively worked for peace. He is somebody who has actively advocated for negotiations as opposed to the use of violence to realize a Palestinian state. We are urging all parties to exercise restraint. We understand the Israeli Government has a right to defend itself and they have explained that their actions, just over the past day or so, have been in reaction to stopping -- trying to stop further rocket launches into Israeli territory, rocket launches that have injured Israeli citizens.

But we've also urged them to consider the consequences of their actions in defending themselves on Palestinian infrastructure as well as on what effect it might have on the prospects for moving forward the political process. But we know that Prime Minister Olmert is somebody who is committed to working actively on that political track.

QUESTION: But I mean, we all know about President Abbas' commitment --

MR. MCCORMACK: Right.

QUESTION: -- to peace and his stated preference for negotiations, things like that.

MR. MCCORMACK: Right.

QUESTION: But in terms of this recent bout of violence, in terms of cracking down on Hamas militants --

MR. MCCORMACK: Right.

QUESTION: -- putting pressure on the Hamas part of the unity government to put their own -- use their own leverage against the Hamas militants, utilizing the security services -- I mean, is he doing all he can to stop this from spiraling out of --

MR. MCCORMACK: We believe that President Abbas is somebody who is committed to (a) the political negotiating track, (b) doing everything that he can to break up terror networks, to stop those attacks emanating from the Gaza Strip against Israel, and somebody who is committed also to building up a professional security force in not only the West Bank, but in the Gaza Strip. Now that's a work in progress and it's also a security force that was attacked by these Hamas-affiliated and Hamas forces.

So we believe that he is somebody who is doing the right things. Now we always encourage him to do everything he possibly can to do more, but we believe he is somebody who is committed to doing all those right things.

Nicholas.

QUESTION: New subject?

MR. MCCORMACK: Sure.

QUESTION: Can you update us on North Korea? It's been a week now since Chris Hill was very upbeat in a speech in Pittsburgh last week, that this -- that he said literally -- we do have something this time. And is it now in the Treasury's hands, is there anything that Chris and his team are doing to resolve the issue, the final --

MR. MCCORMACK: The BDA issue; I know that the North Koreans are working with their bankers on the issue and Sue, at the beginning of the briefing, asked several questions about, well, what is the United States Government doing, what is its involvement. I'm just not going to comment on that at this point.

It's a work that is in progress in terms of the North Koreans working with various banking institutions, but beyond that I'm just not going to have any comment on the issue while it is something that it is in progress other than to say that we all hope it is something that we can put behind us, put in the rear view mirror so we can focus on imparting some more momentum to the six-party talks and get to the business of denuclearizing the Korean Peninsula.

QUESTION: When you say the North Koreans are working with their bankers --

MR. MCCORMACK: Right.

QUESTION: -- do they have new bankers?

MR. MCCORMACK: Do they have new bankers?

QUESTION: Yeah.

MR. MCCORMACK: Ask the North Koreans with whom they're dealing.

QUESTION: Because the old banks are in Macau and now they're supposed to have new ones, so I mean when you talk about their bankers, are those people or institutions identifiable at this point?

MR. MCCORMACK: You can talk to the North Koreans about with whom they are dealing.

QUESTION: Well, they don't answer their phones. (Laughter.) All right, thanks.

MR. MCCORMACK: Kirit.

QUESTION: If I could ask you about Colombia, actually. One of the hostages has been able to escape, I guess, and said that she's seen the three -- three of the Americans, I guess as recently as April. I'm just wondering if you had any comment on their sighting and whether this changes your guys' calculations at this point or how you're going to handle this issue.

MR. MCCORMACK: Well, we want to see these three returned to their families safely and as soon as possible, and we are going to do whatever we believe is appropriate to make sure that that happens. I can't vouch for the accuracy of this individual. I can't -- I have no reason to dispute it, but I don't think that we have -- we have talked to the Colombian Government about his reports. The only thing I can say, Kirit, is that these people have been in captivity for quite some time; we feel for the families. We're in close touch with them. We have been periodically over time.

And we as the U.S. Government are always concerned about U.S. citizens who are being held against their will and we're going to do everything that we possibly can, that we believe is effective, in seeing that they are safely returned to their families. We don't want to do anything to jeopardize their safe return.

QUESTION: This is the first time they've been seen in a while. Does the fact that they have been seen now change the way you guys are going this? Does it add some sort of urgency? Does it -- are you guys going to try and --

MR. MCCORMACK: This is something -- on any given day, this is something -- a topic that there are people all throughout the U.S. Government who devote their attention and energies to.

Sue.

QUESTION: So sorry -- but your strategy -- I'm just wondering if the way you guys would go about it will change at all. I understand that it's been a priority. I just --

MR. MCCORMACK: Right. Well, I would just go back to what I said. We're going to do whatever we consider to be effective in ensuring that these people are returned safely to their families, since that's what everybody wants to see.

QUESTION: I'm sorry if I missed this, but are there any plans to appoint a U.S. envoy to Somalia? John Yates apparently is --

MR. MCCORMACK: I think we're going to have a statement out after the briefing on that.

Yes.

QUESTION: Can we go back to (inaudible) -- what did the Secretary discuss with Olmert and Abbas, just --

MR. MCCORMACK: She talked with them this morning about the current situation, how they saw the current situation.

Charlie.

QUESTION: Can you talk any more about the meeting set for late May, I guess, in Baghdad on the --

MR. MCCORMACK: May 28th, right.

QUESTION: The 28th meeting.

MR. MCCORMACK: Yeah. Ryan Crocker from our side.

QUESTION: Yes. And what his brief might be?

MR. MCCORMACK: I can tell you very generally what it will be. It will be to talk about Iranian activities in Iraq and how Iran might play a positive role in Iraq's stability as well as the security situation there. I can't tell you exactly what's going to be on his agenda, but I would suspect it would, in some way, touch upon Iranian support for these EFD networks that pose a threat to our troops; Iranian support for the militias, which are aggravating sectarian tensions in Iraq.

And certainly, we would encourage them to take positive steps, to follow their rhetoric with action in order to stop the flow of material funding as well as technology and personnel into Iraq that might be playing a negative role in Iraq's stability.

QUESTION: Sean, can I follow-up?

MR. MCCORMACK: Sure.

QUESTION: Are you going into these meetings, looking at it as an opportunity just to talk about your concerns about Iranian activity in Iraq, or are you going in with an open mind about any concerns that they might have about your presence and role in Iraq?

MR. MCCORMACK: Well --

QUESTION: I mean, are these one-sided talks or something?

MR. MCCORMACK: Talks are never by definition -- never one-sided. I'm sure that they are going to have things that they want to bring up; you can ask them what it is that they want to bring up. I know the Iranian Foreign Minister did underline the fact, though, that the discussions are centered solely on the issue of Iraq.

We would encourage them, as we did at the Sharm el-Sheikh conference, as we did at Baghdad at the neighbors conference, to follow up their rhetoric with actions. They talk about the fact that they want a stable, secure, prosperous Iraq. Well, their actions are not lending -- are not helping with a -- helping to produce a more stable, secure Iraq. So we'll see what they do. This is an opportunity to talk directly about that issue.

Yeah.

QUESTION: Just back to Wolfowitz.

MR. MCCORMACK: Yeah.

QUESTION: Can you comment on if there's a process that has been initiated by the Administration, perhaps, in finding a viable replacement just in case he does step down, or something about --

MR. MCCORMACK: Well, that's (a) getting ahead of where the situation is at this point, and -- with these kinds of appointments, these are things that always come out of the White House, but I'm not trying to indicate anything one way or the other. But that is a presidential appointment -- or presidential nomination, I think, yeah.

QUESTION: Okay, thank you.

MR. MCCORMACK: Great.

(The briefing was concluded at 12:58 p.m.)