Interview With the Fox News Editorial Board

QUESTION: Well, what's the status - on or off the record?

SECRETARY RICE: We're on the record -- on the record, yes

QUESTION: On the record, okay.

SECRETARY RICE: We should talk about whatever is on your mind. I'm sure that'll take us into lots of different areas. Obviously, we're here at a meeting of the - I'm here because of the meeting of the United Nations General Assembly, the yearly meeting. And there are a couple of things that I'm concentrating on and that the President will be concentrating on.

Roger mentioned that we are trying to support the Israelis and the Palestinians as they intensify their bilateral discussions to lay a foundation for the establishment of a Palestinian state. It's a conflict that's gone on a long time. There are some reasons to believe that there might be some ways to make progress there, largely having to do with the emergence of a Palestinian leadership in Mahmoud Abbas and Salam Fayyad that really does accept the two-state solution, accepts Israel's right to exist, accepts the renunciation of violence, and seems to be very devoted to weeding out corruption and fighting terrorism. So for the first time - maybe ever, but certainly for the first time in a long time, a Palestinian government that might be a good partner for the Israelis.

It is also a time when the Arab states are really concerned about Iran and I think recognizing that they would like to have a calmer Middle East on other fronts. And it has caused the Arab states to reach out in ways that they haven't for a long time to think about how they might move - how we might move an Israeli-Arab track as well as the Israeli-Palestinian track forward.

There are no guarantees in this business and it may well be that we won't get there on the movement toward the establishment of a Palestinian state, but I think it's the best chance in quite a long time. And it's, frankly, because over the last several years, President Bush - and I know he won't get much credit for it, but over the last several years has really changed the terms of the debate about the Palestinian-Israeli issue to one about fighting terrorism, to one about the creation of Palestinian institutions that are democratic and clean and can govern for the Palestinian people; not accepting, for instance, Yasser Arafat, who both had a foot in terrorism and a big foot in corruption; and because he led on - President Bush led on the notion of the establishment of a Palestinian state, making it American policy for the first time.

And so we've got some opportunities. It's one of the things that we're paying the most attention to over the next 15 months or so.

Obviously, I'm spending a lot of time here, too, talking to the states that have been a part of the coalition against the Iranian nuclear program, the so-called P-5+1. It's the permanent five plus Germany. It began as an EU-3 negotiation project. We, China and Russia joined their efforts. But so far, the Iranians have not suspended their enrichment and reprocessing. But I can tell you that we are stepping up our activities and our pressure on Iran to do so. Not only are we determined to press them in Iraq when we find them doing activities that endanger innocent Iraqis and endanger our forces, but we are, in addition to the UN Security Council track, the - I'll call them informal or collateral financial measures that people are taking - many of them, by the way, the private sector just deciding that the reputational and investment risk of dealing with a country that's under Chapter 7 resolutions isn't worth it - that's having an effect. A lot of the big banks have pulled out. A lot of - several governments have diminished - they've downgraded their investment credit with - investment credits with Iran. And so I will have a meeting with the P-5+1 in a couple of days and we'll try to move forward on keeping the Security Council track moving.

The other major area that I've been spending a lot of time talking to people about here - and my portfolio very often involves terrorism and nuclear issues and so forth, but I'm equally concerned these days about free trade in the United States. We've got a few really important free trade agreements coming up in the Congress - Peru, Panama, Colombia. These are obviously - and South Korea. But the first three are obviously free trade agreements with our most important friends - some of our most important friends in Latin America. Everybody is concerned about the kind of populism, destructive populism of people like Hugo Chavez. But the way to build a backfire against that is not to stand up and give speeches about Hugo Chavez. It's to align ourselves with those leaders and those states that are really prepared to fight terrorism, to fight populism, to keep their markets open, to provide for their people, to govern democratically. And frankly, there is no greater example of that than the Uribe government in Colombia. And it would be a real shame if this government, which is one of the most pro-American governments, one of the most democratic governments, a government that has taken back its territory, 30 percent of which was controlled by the FARC in the year 2000. I will have dinner in a couple of nights with my colleague, the Foreign Minister of Colombia. Last year, he was still in FARC captivity. He had been in captivity by the FARC for six years and he managed to escape. He is now the Foreign Minister of Colombia. It shows how far that country has come, and the United States has got to find a way to stand by its friends both in a strategic sense and in an economic sense. And so I'm spending a fair amount of time these days making the case for free trade generally, but also making the case for these key free trade agreements that are at the heart of some of our most important foreign policy initiatives.

So those are some of the things that are on my agenda this week, among others.

QUESTION: Is that it? That's all? (Laughter.)

SECRETARY RICE: No, there's a few others, too. (Laughter.)

QUESTION: Let me make a recommendation that any questions you give be long questions so that she can get something to eat here.

SECRETARY RICE: Oh, I'm fine, I'm fine. (Laughter.)

QUESTION: If I could just follow up with the free trade which (inaudible) essential and all the sides have been rather (inaudible) slowing down (inaudible) globalization. And it seems to be not just (inaudible) Democrats wanting (inaudible) Administration on anything, but so many really strong special interests, the thousands of lobbyists in Washington pushing against any form of free trade with these countries you're mentioning. (Inaudible) huge odds.

SECRETARY RICE: It's very difficult.

QUESTION: I mean, you got through the last one by, what, one vote?

SECRETARY RICE: One vote.

QUESTION: And that was what, the sugar lobby was the biggest opposition rather than just Democrats?

SECRETARY RICE: The opposition came from - yes, from several lobbies. But also, there's just not a very good mood about free trade. And you're right, it's a bipartisan not-very-good mood about free trade. And that's really unfortunate. The CAFTA which (inaudible) was talking about, was the most - in some ways, the most unilaterally favorable toward the United States because our markets were already open to the CAFTA countries. This opened their markets to us. And we won the trade vote by one vote. So it just says that something has eroded. People very often confuse the issues associated with free trade agreements with what they see as a concern about the rise of China and the fact that we do have large trade deficits, and people see that and they say, oh well, free trade must be bad. But of course, the United States benefits greatly from these free trade agreements; and while there may be pockets in which there is dislocation, as an overall matter for the economy, they are very strong. And you can do things to improve the lot of workers who are displaced, and that's one thing we've tried to work with the Democratic leadership on is what can you do to improve the trade adjustment assistance for people who might be displaced. But you're right, it's a bipartisan problem.

QUESTION: Yeah, because, you know, we've seen this (inaudible) or non-progress that Doha (inaudible) and we've done this in a period of unprecedented world prosperity.

SECRETARY RICE: That's right.

QUESTION: With (inaudible) running into some serious bumps. I don't see it a crisis, but serious bumps here. China's going to be - which will be good for us probably - clamping down on its economy as hard as it's possible because (inaudible) seems to be made (inaudible) place is running away. But (inaudible) long term very optimistic. For the short term it's going to be terribly difficult, terribly difficult. Sorry, big speech.

SECRETARY RICE: No, not at all. That's exactly right. And we've got to somehow get out and make the case and make the link about the economy, but also make the link about our strategic interests (inaudible).

QUESTION: (Inaudible).

QUESTION: Doesn't it go against logic that some of the opposition to free trade is actually tied up with anti-immigration feeling; whereas, the obvious truth is, if people have jobs and are making money at home, they have less incentive to try to come to this country illegally? And yet, you're fighting or you're contesting with natural allies who are one-issue allies.

SECRETARY RICE: That's right. Sometimes I'm fearful that they go together, that it's almost a kind of mood gestalt, you know, that anti-immigration, anti - protectionism, and to a certain extent a little bit of isolationism, kind of, you know, we'll let the world do whatever it's going to do, we have other things that we can do at home. Yes, I think they tend to run as a pack. And it's a real problem because if you look at a place like Mexico, there is no doubt, as the President has said -- you know, he always says family values don't stop at the Rio Grande. So if you can make 50 cents in Mexico and $5 in the United States, you're going to find a way to get to the United States. If you can improve the prospect of making $2.50 in Mexico, people will stay in Mexico.

QUESTION: Stay home with their friends.

SECRETARY RICE: And we really have had a very cooperative - a more cooperative Mexican Government, I think, then ever before on matters of crime on the border and dealing with some of these issues. But the thing that they really do understand and that Calderon talks about all the time is without some kind of approach to immigration and some continued opening up of free trade for countries that are south of Mexico, because one of the things that's happened is there's an outflow of people from Central America and further south into Mexico as Mexico's economy has improved.

So the best - I think we've learned over the years that the best policy for the United States is open markets and open trade, not to the point that you don't protect your economic interests. Of course, we hammer them all the time on the Chinese about, for instance, intellectual property rights where, frankly, they're terrible, and we press them very hard on that, on prosecuting people. We hammer them about financial services, allowing financial services into China.

But open markets, open trade, reasonable immigration policies are really at the core for continued economic development, and we have a struggle for sure.

QUESTION: Madame Secretary, the thing that did or didn't happen in Syria the other day (inaudible) of the Arab-Israeli dialogue (inaudible)?

SECRETARY RICE: Well, let me not try to comment on what are now many, many different conflicting reports about this issue. But (inaudible) to the issue of proliferation. This is a serious issue. The President made very clear in - at the time of his "axis of evil" speech that we were concerned that we not allow the most dangerous weapons to fall into the hands of the most dangerous regimes, and that we had to have very active anti-proliferation policies to prevent that from happening. And we have several tools at our disposal.

One is that we do have something called the Proliferation Security Initiative which actually does intercept by air, land or sea cargoes that are suspicious. And the way that it works is that there is an intelligence tip that something needs to - looks suspicious, and we have a network of more than 50 countries that will then either refuse overflight rights or stop the ship in port or demand to board and see cargo. So that's an effective tool.

A second way that we've done this is that we've been aggressive against certain networks. The A.Q. Khan network was probably the biggest proliferation threat out there because it was no government. At least with governments you have some levers, some leverage. But with a black market network of a lone Pakistani scientist with business contacts who were selling, we believe, kind of turnkey operations on enrichment and reprocessing, this was a very dangerous - and the development and the breakup of that network is extremely important.

Third, with some countries - and here with North Korea - we've made very clear that the nuclear program of North Korea has got to be shut down in all its aspects. And that means whatever they're doing in North Korea and it also means whatever proliferation activities are going on, because nobody - let me just say something about the six-party talks and continuing them. Nobody is confused about the nature of the North Korean regime. Nobody. Most especially not the President or me. We know this is a bad regime. The reason that you want to deal with these issues in a six-party framework is that, first of all, you've got the right set of countries at the table with the right set of incentives and disincentives - the Chinese, the Japanese, the South Koreans, the Russians, but particularly the South Koreans and the Japanese. The South Koreans, when the North Koreans launched that nuclear - did that nuclear device - tested that nuclear device, the South Koreans withheld $300 million in assistance to the North Koreans. That certainly helped the North Koreans to decide they needed to go back to the six-party talks. And so you've got the right set of countries there to deal with. If you try to do it on your own or you just stand up and talk about it, the North Koreans are not going to respond to that. But they do respond when there are countries that can actually have both the right set of disincentives and the right set of incentives. So that's another way that we're going about it.

But the biggest problem, to my mind, for proliferation in the Middle East would be if Iran gets a nuclear weapon or even the technologies, technological knowhow, to create a nuclear weapons program. Because you're going to set off a competition for other states in the region to do the same, and that's a big proliferation threat as well as a general security threat. So those are some of the ways that we're dealing with what has been a very high priority for the President.

QUESTION: Madame Secretary, you mentioned Israel and Syria. Six to eight months ago, there was great concern, much talked about, a possible Syrian-Israeli conflict. I wonder if, without being specific about recent events, if that concern is as high as it was. And if not, why not?

SECRETARY RICE: Well, there are lots of reasons to be concerned about Syria and Israel. I mean, one of the - probably the most urgent, immediate one is that after the war in Lebanon, when Hezbollah was knocked back, the - Syria has been the principal supplier for weapons coming in to Hezbollah. And this has actually been publicly acknowledged by the Lebanese and others. And so for the Israelis to watch Hezbollah rebuild was a problem, and so we've been trying to work with the Lebanese on that issue. But there are lots of reason for Syrian-Israeli tensions. I think that's one of the most acute.

What is interesting is that I think there are - Israel is not the only country that is just really concerned about Syria (inaudible). What Syria is doing in Lebanon, what Syria is doing with the flow of foreign fighters into Iraq, what Syria is doing in supporting Hamas by letting them keep their offices in Damascus - these are all really threats to a different kind of Middle East. So I can imagine that Roger, who mentioned this when we first started, might say then why in the world would you want to invite Syria to a meeting, an international meeting that is supposed to talk about the Israeli-Palestinian peace.

Well, the Syrians are members of the Arab Follow-on Committee, the committee that the Arab League put together to have follow-on discussions about their peace initiative. And this initiative will be one of the pillars for the discussions in the meeting because we really would like to see not just a Palestinian-Israeli track but really the Arabs need to get accustomed to the idea that Israeli is going to be there, too. And so we faced a choice: Did you try and exclude a member of this committee, causing untold difficulty for others in trying to figure out whether or not they could then come and so forth; or did you just say the entire committee is invited and, by the way, if you come to this meeting you are in a sense accepting a certain responsibility that the Israeli-Palestinian issue is going to be resolved peacefully and a two-state solution and so forth? We decided on the latter, not one of the easier decisions we've ever had to make.

QUESTION: So it's like having to invite your uncle, the drunk, to Thanksgiving, right? (Laughter.)

SECRETARY RICE: No comment.

QUESTION: (Inaudible) build up a great Sunni alliance which would - this - one of its (inaudible) absolute peace agreement with recognition of Israeli, I thought - and the Saudis have signed onto this (inaudible) very close to it when Hamas said, well, (inaudible) beyond that we won't (inaudible) so the Israelis basically walked. I mean, can you reconstruct that, get Hamas or can we do it without Hamas, or wipe them out in some way? Because the Syrians, they're always going to be trouble. I mean, they're just bad people and it seems we have to accept that (inaudible). And they can't be allowed into this (inaudible). They've got to be weakened so that they can't do - arming Hezbollah, can't be arming Hamas and they can't be, you know, looking (inaudible) Iraqis.

SECRETARY RICE: No, it's absolutely true that --

QUESTION: I mean, the pressure has got to go on them.

SECRETARY RICE: No, the pressure has to be on Syria. There is some pressure on --

QUESTION: I mean, who supports them because they don't have any money (inaudible)?

SECRETARY RICE: I'm sorry?

QUESTION: Who supports the Syrians? Where do they get their money?

SECRETARY RICE: Well, they have any number of enterprises, let me call them, that operate in places like Lebanon. Basically, the financial structure within Lebanon.

QUESTION: (Inaudible.)

SECRETARY RICE: And the problem is that they don't really accept that they are no longer in Lebanon. And they have tried through intimidation and support for any number of their allies in Lebanon to make life very difficult for the democratically elected government there.

QUESTION: Well, they kill their --

SECRETARY RICE: And a number of people have been killed by, undoubtedly, people --

QUESTION: Syrian-inspired.

SECRETARY RICE: -- well, who have ties. Who certainly have ties. I can't say if it's with Syria or not, but they certainly have ties.

So yes, they do have to be pressured. But I - to go back to your first point, yes, I think it is possible that the reasonable, responsible Sunni Arab states that are very worried about the Iranian influence and Iranian aggressiveness form a kind of natural set of friends, allies, to try to do several things in the Middle East. One is to try to form a Palestinian state that can live side by side with Israel and can therefore end that conflict and put us on the way to reconciliation of Arabs and Israelis; secondly, to try to support the Lebanese Government --the same states are supportive of Fuad Siniora and his government; and also to have better policies toward Iraq. And this has been the hard one because Iraq - what we've had to try to convince the Sunni Arab states of is that just because Iraq's Government is Shia majority, it is not Iranian-backed. That there can be a Shia-majority government that is Arab in its character and integrated into the Arab world is not an easy argument. It was made harder during the period after 2006 when you had the bombing of the Samarra Mosque and you did have an outbreak of sectarian violence in which you had really, through the death squads, horrible atrocities being committed on both sides, but a lot of them by Shia death squads against Sunni populations.

One of the reasons that it was so important to get that violence, that kind of violence, under control, and one of the reasons for the President's surge, was that without some reduction in that kind of sectarian violence led by death squads which the Iraqi army simply couldn't handle, without some reduction there was no way that you were going to begin to get a basis for any kind of political - we keep saying political reconciliation, just political living together (inaudible).

Where we got - what happened - and it just shows that these big, physical*, historical changes you never know where positive developments are going to come from, but what none of us really expected was the positive development would come with the Sunnis in what we used to call the Sunni part of Iraq. How many times did we say we have got to find legitimate Sunni leadership so that the Sunni insurgency loses steam and that the Sunni populations will not support al-Qaida? And we thought that it was going to come by having the Baghdad government pass de-Baathification laws and an oil law and so forth, and that would draw the Sunnis in. It came in the opposite way, from the bottom up instead, where these Sunni tribes -- who I met with the President when we were out there. These Sunni tribes decided that they did not like the face of al-Qaida. They didn't want their women - girls - married off to these terrorists. They didn't want their children turned into suicide bombers. They didn't like the violence - I mean, just the brutality of these al-Qaida types. And by the way, they really didn't want to be the Islamic Republic of Iraq.

And one of the, I think, really important developments that's largely been missed is this is the first real rejection of al-Qaida and its ideology in the Arab world. Not just they're bad people and they blow up things and therefore we don't want them. That was part it. But also this is not where the Arab world wants to go. And that's a big defeat for al-Qaida and its ideology, because you don't just want to defeat them by killing or capturing their leaders, but you also want to defeat the ideology. And this is a big defeat for them.

QUESTION: I recently (inaudible) West Point, the terrorism school up there and they said (inaudible). And you looked at Muslims and then brought it down to the GIs and they had discovered a handbook that if you're going to join al-Qaida - it has - even lists their vacation days and all sorts of things. The only thing is, it has no retirement policy because - (laughter) --

SECRETARY RICE: Right. He's not going to retire. Right.

QUESTION: (Inaudible) the future. The point of all this was --

QUESTION: Limited.

QUESTION: The point of all this was that as an ideology it's as weak as communism, that -- which eventually imploded on itself to some degree because you can't get people to buy into the ideology; and that ultimately the defeat of jihadism will be this educational process and the implosion on itself of the ideology and (inaudible) going until such a time as that takes place. But this sounds like sort of the beginning of it.

SECRETARY RICE: It's the beginning of it. And you put it exactly right. You know, when George Kennan, who now says he never meant to militarize his idea - maybe not - but when George Kennan wrote his famous Mr. X article, the line was, "We have to deny the Soviet Union the easy course of external expansion until the day it has to turn to deal with its own internal contradictions."

Now, clearly, by '88, '89, '90, it was trying to deal with its own internal contradictions and it couldn't, and it collapsed. It lost its will. It wasn't a very attractive ideology. You know, the notion that "I don't work at all and you work really, really hard and I get the same thing that you do" is just kind of not natural for human beings. And it imploded.

We have to deny them the easy course of external expansion. One of the things that the critics, I think, missed is you cannot do that by simply locking down New York. You have to do that by being on the offense against them in the center, their epicenter, which is the Middle East, Afghanistan, all of these places. If you can do that, this is just not a very attractive ideology and it will lose.

QUESTION: What's the fear of - we seem focused on Iran and the fact that if they get nukes they can hand them off to terrorists. It seems to me that North Korea would do that today and that maybe what the Syrian thing is all about, but is that a greater threat? Because clearly, they have them and they don't care.

SECRETARY RICE: When they exploded the device, we had a two-pronged policy. Because I went out to Asia shortly after that, two days after testing, and I talked to people about strengthening our alliances and reaffirming our commitment to defend Japan and South Korea, just in case the North Koreans had any nutty notions about launching something. But I also said that the principally big concern here is the transfer, somehow, of materials of (inaudible). And that is then an issue in the six-party talks, because you've got to shut down that program. Now there - we have to shut down, that's a good thing. The next step is it's got to be disabled so that they can't build it back easily.

Then we're going to have to account for whatever it is that they've made in the meantime and what happened to it. If we can get through that series of steps, I think we'll be far better off on the proliferation side. We won't be completely free because you're never going to know everything that you need to know about this regime, but we will be in much better shape on the issue that (inaudible).

QUESTION: What does it say to you that publicly, no Arab leaders came out and condemned that attack?

SECRETARY RICE: Yeah.

QUESTION: (Inaudible) position that they want to keep it quiet if, indeed, it was missile material or something worse than that nuclear material, but also Damascus (inaudible) out and deny that they were doing anything nefarious. But no Arab leaders came out and said Israel just raided another one of our countries and not a word was spoken. That tells you what --

SECRETARY RICE: The Syrians are not very popular in the Arab world, frankly.

QUESTION: No.

SECRETARY RICE: The Arabs, I think, know that they are a problem and they - and you know, the Arabs really resent their relationship with Iran. They really resent that Syria is a --

QUESTION: (Inaudible).

SECRETARY RICE: The Sunni - right, that Syria has kind of provided a bridge for Iran into traditional Arab issues, whether it is the Palestinian-Israeli issue of what's going on in Iraq. It's really resented and one of the (inaudible) really is that the Syrians have aligned themselves too closely with the Iranians and in the Arab world, that's really not appreciated.

QUESTION: Madame Secretary, then how great a concern is a sharper rivalry between Iran and Saudi Arabia? It sounds like a lot of these issues that you're talking about could involve proxies (inaudible).

SECRETARY RICE: Well, so far, I would say that what you've had is Saudi Arabia taking a more active and largely - not wholly, but largely positive role in being the kind of front leadership for this more responsible set of policies, whether it's in Lebanon or with the Palestinians now - the problem when Hamas - when you had the unity government and there was some hope in parts of the Arab world that this was going to unite the Palestinians. Quite clearly, Hamas and Fatah are never going to live in the same body, so that was something of a - well, it backfired.

But so far, I think what you've got is that Saudi Arabia and, to a certain extent, Egypt are providing pretty good leadership on these issues and it provides a counter to Iran. They're not really very rhetorically aggressive about Iran, but the policies that they're pursuing are clearly policies that help to checkmate Iran and some of its activities. So I don't think it's likely to become an open, rather hot rivalry, but I do think you're going to continue to see these Sunni-Arab states challenge Iran.

And we need to help them challenge Iran by - as we did when Bob Gates and I went out to the region, reinforcing our security relationships, reinforcing their capabilities in the Gulf, as I said, removing some of the troubled spots that the Iranians can play in, and also convincing these long-term allies of the United States, in the Gulf in particular, but also Egypt, Jordan, others that we're not going anywhere in the Middle East.

I think there was a great fear that maybe - we're in September now, so prior to the President's speech in January, that the United States might precipitously leave Iraq; if we precipitously left Iraq, we would most certainly be forced out of the Middle East in general and that Iran would fill the vacuum. And frankly, Ahmadi-Nejad, who, to a certain extent, is the gift who keeps on giving rhetorically saying if the United States leaves Iran, it is prepared to fill the vacuum?

QUESTION: Yeah.

SECRETARY RICE: I couldn't have said it better myself. So now, with the United States having made a stand that we're staying, we're going to complete our work there, and what is more, as the President said in his speech, we're going to have a long-term relationship with Iraq, you think about it in the following terms: long-term relationship with Afghanistan, long-term relationship with Iraq, reinvigorated security relationships in the Gulf, good relationships in Central Asia with places like Tajikistan and Kyrgyzstan, maybe not a great geo-strategic picture from the Iranian point of view, but a good geo-strategic picture from the point of view of our allies.

QUESTION: And speaking of Ahmadi-Nejad, two questions for you.

SECRETARY RICE: Yeah.

QUESTION: There's been so much criticism of this visit and Lee Bollinger, the president, said it's America at its finest. (Inaudible) university president at its stupidest. What do you - what's your reaction to it and what do you think Ahmadi-Nejad is actually up to? What do you hope - think he hopes to gain?

SECRETARY RICE: Let me say first about Ground Zero, that would have been a travesty. It just, flat, would have been a travesty. The idea that this president of the biggest state sponsor of terror would have gone and laid a wreath at the site of our largest terrorist incident where 3,000 Americans died, I think that would have been a travesty and I'm really glad New York (inaudible).

I'll tell you what concerns me about his going to Columbia. I'm actually not so worried that it gives him "legitimacy" here, because undoubtedly, he will say something that will just remind people who he is. But I am worried that it could give him greater legitimacy at home. He's not very popular in our - among a lot of the (inaudible) and I can guarantee you that the coverage of him will not be of the protests and the coverage will not be of the "difficult questions" that he's asked. The coverage of him will be at a - one of America's finest universities giving a speech and I just hope that the - there will be some way, and surely, we will try and others will try, that the Iranian people will know that he was not received here as a hero because --

QUESTION: Can we punish Columbia?

SECRETARY RICE: No.

QUESTION: State government, some of them are cutting off some of their funds --

SECRETARY RICE: No. You know, look, it's - let's -- the good thing --

QUESTION: The alumni - some of the alumni --

SECRETARY RICE: Well, look, people will make their own choice - people will make --

QUESTION: -- may cut off their funds.

SECRETARY RICE: People will make their own choices. Individuals make their own choices. Private citizens will make their own choices. But I just think, you know, it's who we are, that people get to make these decisions and then --

QUESTION: Couldn't we take another run at bringing the ROTC back in?

SECRETARY RICE: Well, you know what?

QUESTION: This week would be a good - wish to do that.

SECRETARY RICE: You know what? I actually think this is a debate that --

QUESTION: I think that's a legitimate debate. If the military now requests of Columbia that ROTC recruiters be allowed back on campus this week, would be interesting to see what happens.

SECRETARY RICE: Well, I will tell you I think the question about ROTC on campuses is coming to the floor again. I was quite surprised; one of my Stanford colleagues sent me a Stanford daily editorial, unsigned editorial by the Stanford Daily board saying it was time to consider the ROTC back on campus because the American military was fighting for our freedom and our survival and it shouldn't be done by people - it should be possible for people who go to Stanford to participate in that (inaudible). It has ROTC, it's just that you have to go to San Jose State or over to Berkley to take the classes. I was really quite surprised.

So, you know, the good thing, and I see it everywhere that I go - the support for the American military in this country is so high and it's so terrific and it's so unlike what happened 30 years ago. It's - that's worth building.

QUESTION: You'll be --

QUESTION: I agree. I think that (inaudible) no matter what happens.

QUESTION: You'll be happy to know that President Ahmadi-Nejad decided to give you another gift. While you were coming over here, he was talking at the National Press Club.

SECRETARY RICE: Right.

QUESTION: And among other things, he said that Iranian women are the freest in the world.

SECRETARY RICE: Did he really?

QUESTION: Mm-hmm.

QUESTION: (Inaudible) you were happy.

SECRETARY RICE: Yeah. (Laughter.)

QUESTION: (Inaudible) population (inaudible) hate this Administration, they want to (inaudible).

SECRETARY RICE: They are.

QUESTION: And they do say if Pakistan can be a nuclear power, why can't we be a nuclear power. It's the one thing that (inaudible).

SECRETARY RICE: I think we could break through, if we could break through, with the message that we don't want to deny Iran's civil nuclear technology. Because this has become inside Iran, from what I'm told, an issue of the West "trying to deny Iran becoming a great technology power." And that's what we're really about and that's what the regime says. They don't say, "We're seeking enrichment and reprocessing capability because we want to build a nuclear weapon." They don't say that. They say, "We, the great Iranian people, culture, have a right to the highest forms of technology."

Now that's a very popular argument, very appealing argument. And we've tried, in most ways that we can think of, to break through --

QUESTION: You offered to build them a nuclear power plant.

SECRETARY RICE: You know, we've even said if you give us your enrichment and reprocessing capability and are prepared to enrich outside the country, ship the fuel rods back outside the country, we're prepared to consider nuclear cooperation with Iran. But because we've said that, the Russians have said that, the Europeans have said that, you know, I suspect what I've always suspected; they don't really want that. Of course, they want the --

QUESTION: They want the bomb.

QUESTION: Isn't Russia making trouble for us? They're not really pulling on this?

SECRETARY RICE: They've been better than I thought we could get them to be, particularly in the last year and a half or so, two years maybe - a year and a half. Russia knows that a nuclear-armed Iran is a real problem for them and their south is as vulnerable to terrorism as anybody and they also don't want a nuclear Middle East. We may disagree sometimes on tactics when, how tough a nuclear - or how tough a resolution might be. But on balance, the reason we've been able to get two unanimous Security Council resolutions is the Russians have been willing to go along.

And we've had to - we've had to press the Chinese increasingly because there is some - with the Chinese, the conversation always turns to, well reliable energy supply and so forth. And China just surpassed Japan as the leading trade partner of Iran because Japan has been cutting back. So we have some work to do there with China, but on balance, we've had pretty good cooperation on Iran. It's not fast enough and the problem is the Security Council resolutions are both slow and they - because they're negotiated, they're never as harsh as we would want them to be.

That's why what's going on outside the Security Council in the financial world and in companies making their own choices is so important to keep going and (inaudible) I think are going to be even better.

QUESTION: Do you think the UN will ever be an effective organization? They seem to have run such a huge, corrupt - you know, (inaudible) vested interests from people there. Sure, it's a useful talk shop, but that's - it's not anything more than that?

SECRETARY RICE: I think so. First of all, Ban Ki-moon is trying to make reform one of the hallmarks of his Secretary Generalship. I talked to him the other night and as much as we talked about Darfur and other things, he talked about trying to reform the UN and he really cares about trying to get an ethics office, trying to get - the Secretary General has very little power the way the structure is run. He has to take everything at the General Assembly, which is very difficult for the Secretary General to be - to hold anybody accountable, but he's trying and we're trying to support him.

I think there's several things the UN does. One is, it is a place to convene, which is not a bad thing and we've had more meetings here and I will have more meetings here than we can count in various - various ways and it has convening power on specific issues. Secondly, it really is a - its peacekeeping operations are pretty remarkable and a little expensive and I like -- we're sort of starting to look into why they cost quite so much, but they're in places that we would never want to be - Cote d'Ivoire, Sierra Leone --

QUESTION: Is there any movement at (inaudible)?

SECRETARY RICE: Pardon me?

QUESTION: Is there any movement (inaudible)?

SECRETARY RICE: Yes.

QUESTION: You've had the scandals of the French and so on.

SECRETARY RICE: Yes, there have been - there have been a few, but on balance, I think --

QUESTION: Which have taken years to --

SECRETARY RICE: Yes, but on balance, I think the peacekeeping operations are pretty good. They were there two years in Liberia, gave Liberia a chance to have elections and now, Liberia has got a good government. They were in Haiti. The truth is the UN always has - the strength of the mission, the capability of the mission is very often dependent on whether you have a good lead country.

QUESTION: Right.

SECRETARY RICE: And so in Haiti, you had a very good lead country, in Brazil and in Liberia and Nigeria. So they've got a big challenge now on Sudan and it's going more slowly than it should, got a big challenge on Somalia. There are not enough combat forces in the world. One of the problems that we've got worldwide is that people have just cut their militaries to the bone and there's just not enough combat now. But I think their peacekeeping operations are a real (inaudible) and if they weren't doing it, if - you know, if we didn't have peacekeeping operations, there would be calls for America to be doing even more than we're doing.

The other thing is that they're specialized agencies. UNICEF is a very good agency. World Food Program is a very good agency. So there are - there's some real advantages to the UN, but it needs - it needs reform, needs it desperately.

QUESTION: Can I ask you a question about Iraq quickly? These foreign fighters have recognized that the game's changed and has turned against them. If I were a foreign fighter, I wouldn't be there anymore, right? I'm going - I'm looking for another battlefield. Where is that? Is that Afghanistan?

SECRETARY RICE: Well, I think they're still hoping for parts of Iraq, which is why we've got to stay on the hunt. I mean, they moved from Anbar to Diyala.

QUESTION: Right.

QUESTION: Now we're (inaudible).

QUESTION: Say for the next, like, year or two --

SECRETARY RICE: But your point is exactly right. They're going to want to go someplace else because I think it's not going to be long before they're not welcome anywhere in Iraq. We're also pushing them pretty hard in Afghanistan. There's more work to do in that ungoverned part of Pakistan to make sure that that can happen, but frankly, right now, the Taliban is a bigger problem there learning some of the techniques of --

QUESTION: Right.

SECRETARY RICE: -- foreign fighters, suicide bombings, and the like. I think that the Horn of Africa is a place to be concerned about. It's one reason that what happened when Ethiopia ran the Islamic Courts out of Somalia was a good thing, but it's still a very ungoverned area. And of course, we just have to make sure that they can't come back into places where they've been, but it is --

QUESTION: Is it the Taliban and al-Qaida merging again?

SECRETARY RICE: Well, they're not really merged, but they work together. They work together. But the Taliban - the problem with the Taliban is that it has domestic roots, if you will, but what really ultimately cost al-Qaida in Anbar is they were clearly foreigners and they have tried - they almost succeeded -- they have tried to make al-Qaida Iraq - Iraqis. You know, we're trying to turn over security responsibility to Iraqis by training Iraqis; well, they have similar plans. They were going to turn al-Qaida operations over to Iraqis because they must have sensed that the - that their "foreignness" was starting to be a liability.

But this is a place - I can't prove it to you, but I think when the history of this is written, I think the loss of Zarqawi was really part of the start of this.

QUESTION: Really?

SECRETARY RICE: He was diabolically brilliant. I think he was an outstanding organizer, I think he had a kind of strategic sense, and I don't think the follow-on leadership has been quite as good. So when you hear people say, "You know, well, if you kill one of them, they'll just replace him with another leader," remember that that's like saying, you know, if you take out Robert E. Lee or Ulysses S. Grant, well, they'll just replace them with another leader. It's - there are people who are better at this than others and I think the loss of Zarqawi, they - they started to make more mistakes.

QUESTION: Diabolically brilliant?

SECRETARY RICE: He was diabolically brilliant. The idea to try to set Sunni against Shia in the way that they did, you know, with the Samara bombing and all of that was really (inaudible).

QUESTION: Madame Secretary, can I ask about France for a second? Since the leadership changed, what impact has that had for us? Is there strong language about Iran helping us or how is that all working out?

SECRETARY RICE: It is helping us because it's going to kind of unnerve the Iranians, which is a good thing. The French --

QUESTION: Because being threatened by the French was never a big threat. (Laughter.)

SECRETARY RICE: The French are - they're out there and they're doing a really good job. They are with us in Lebanon and now on Iran. It's a much more activist French Government and Sarkozy has been - so it's - France and the United States are always going to have a relationship that has its puts and takes just because it's France and the United States. But Sarkozy has made very clear that he wants to be a partner for the United States. The first thing he said when I walked into his office for the first time was, "What can we do to help."

QUESTION: (Inaudible) sea change to really - I mean, they are just (inaudible).

QUESTION: Politics took a big of an ugly turn two weeks ago with the Moveon.org ad about - against General Petraeus. Is that perceived in your line of work by leaders overseas as weakness in America?

SECRETARY RICE: To the extent that people understand it, which they don't always, I think they kind of - it's a little bit, "Well, that -- there they go again, you know, that's America."

QUESTION: Some people --

SECRETARY RICE: "That's America." I think it would have been much more - all of this would have been much more devastating if the President had just come out and said, "All right, I don't really care what the -- I'm going to leave here." I think January was absolutely crucial. Now the - I can't tell you the degree to which I think people had started not counting out the Administration; counting out the United States. Things were tough in Iraq. People were talking about getting out of Iraq. They were talking to what - was the President going to be able to sustain the country.

What I've been saying to my counterparts recently is you know what's very interesting about all this debate and the way that it went and all the votes in Congress and so forth is in the final analysis of the United States, the system as a whole, would not do something irresponsible. It just didn't. And that's leadership and it's also, perhaps, the kind of innate sense of national responsibility for international problems. So I don't think people read that the wrong way, although it was - itself was reprehensible and absolutely (inaudible).

QUESTION: Madame Secretary, you're coming up - you have one year to go, one year --

SECRETARY RICE: One year and - what? --

QUESTION: And change. (Laughter.)

SECRETARY RICE: Yeah, there you go.

QUESTION: Yeah, a year and three months. You look at the year ahead; if there's one last thing you want to accomplish, one big mission that you feel like you need to get done, what is it?

SECRETARY RICE: Can I have two?

QUESTION: Yes.

SECRETARY RICE: Or three or four? (Laughter.)

QUESTION: You can have as many as you want.

SECRETARY RICE: Let me go back for a second and tell you how I see what we're - where we are and what we're doing.

QUESTION: Good.

SECRETARY RICE: I was here the last time and it was the end of a big historic transformation and it was really fun to be the White House Soviet Specialist at the end of the Cold War and, you know, to be there behind Jim Baker when he signed the (inaudible) rights and responsibilities to a unified Germany on Western terms and to see the Baltic states liberated and it was just great.

And it was really remarkable; everything - every day you came in and something was going your way. It was almost as if we couldn't do anything wrong. And part of it was that the underlying framework of the international system which had been bipolar Soviet-U.S. was - collapsed and we won. And even though we won in a war that was not a hot war - it was the Cold War - we, in effect, were victorious and things flowed from that.

But I've said several times now it's easy to have too much, kind of, self-congratulations about being in a time like that and you look back and you say, "But what was it like for Marshall and Acheson and Kennan and Nitze and Truman?" And you think that on any given day between 1946 and 1950 - in '46, the French Communists won 46 percent of the vote and the Italian Communists 48 percent of the vote. The question wasn't, would Eastern Europe be Communist; it was, would Western Europe be Communist.

And in '47, you have the Greek Civil War, you have 2 million Europeans starving, you have the - in '47, the Marshall Plan is launched because Europe is leaving Greece and - Britain is leaving Greece and Turkey. In '48, you have the Czechoslovak coup, the Berlin crisis, you have to recognize Israel setting off the Middle East. In '49, the Soviet Union explodes a nuclear weapon five years ahead of schedule. The Chinese Communists win. And in 1950, the Korean War breaks out.

Now at the beginning of a historical transformation, it's pretty tough. And so I was lucky enough the last time to be at the end of one; this time, I'm fortunate or unfortunate enough to be at the beginning of one. And so you say to yourself when you find yourself at the beginning of a big historical transformation, what are your responsibilities? And I think our responsibilities are like those responsibilities of those people in '46 and '47 and '48, to lay a foundation so that at some point in time, we win.

We have to win against the extremists and that means we have to take away places that they might have won, like Afghanistan and Iraq. And so I'm very focused on trying to leave Iraq and Afghanistan in a sustainable position for the United States going forward. And that means that whoever is President is able to sustain our commitment for the long-term to Afghanistan and Iraq.

Secondly, I believe that we have a chance, as a part of -- this new Middle East, this different Middle East to sustain and to strengthen this coalition of responsible states and to put the United States in a stronger position to resist Iran. I believe too that as a part of that, we have a chance to make a lot of progress on a Palestinian state, so if you are asking what is most on my mind right now, it's probably the Israeli-Palestinian dynamics and trying to move that forward.

And then finally, I wouldn't take any bets on it, but it's - I feel it's a not-negligible chance to change the equation on the Korean Peninsula. If we can make progress on the disarmament of North Korea, I think that will give some impetus to perhaps even overcoming the war on the Korean Peninsula and moving to something that looks like a more normal relationship on the Korean Peninsula; not because I want to make normal relations with the North Korean regime, but because unless that regime has opened up, you're never going to be able to see a peaceful Korean Peninsula. And when it's opened up, I think it will have to change dramatically. And as a part of that, we are looking at using the six-party framework to openly embed China in a security framework for Northeast Asia that would help to temper the rise of Chinese power.

So those are a few of the things that I'd like to do in the next year.

QUESTION: (Inaudible) two or three things. (Laughter.)

QUESTION: She's got to go.

QUESTION: Yeah.

QUESTION: She's got a lot to do.

MODERATOR: There's time for one more question if anyone has one before we wrap it up here.

QUESTION: Can we just ask one last question about how you feel about the economy?

SECRETARY RICE: Well, you know, that's - I watch it like all of you and pray for the best from the Fed and from Hank Paulson and (inaudible). From everything that I read and hear, the economic fundamentals are strong and --

QUESTION: (Inaudible.)

SECRETARY RICE: Yeah, all right.

QUESTION: He's a pessimist.

SECRETARY RICE: He's a pessimistic - but I think the --

QUESTION: Well, I think, you know, we're at the start - all of (inaudible), which we've never seen, which is just fantastic. You know, 3 billion people coming out of --

SECRETARY RICE: Right.

QUESTION: -- dire poverty --

SECRETARY RICE: Right.

QUESTION: -- over the next 30 years or 50 years all creating wealth.

SECRETARY RICE: All creating wealth, exactly.

QUESTION: And making a big - but also demanding to be (inaudible).

SECRETARY RICE: Yes.

QUESTION: Because there's been a lot of things happening, but it really is, like I said, a lot of (inaudible) very, very optimistic.

SECRETARY RICE: Should be very optimistic in the long-term. Now if --

QUESTION: I'm sure it's down. You've got - if it continues (inaudible) --

SECRETARY RICE: Yeah.

QUESTION: Half the illegal Mexicans have got hired and we (inaudible) no more unemployment and you can see it in the money that's going to Mexico. A lot of it (inaudible).

SECRETARY RICE: But --

QUESTION: (Inaudible) --

SECRETARY RICE: But if you look at the long-term, you're optimistic because you think that we're going to have more people coming out of poverty, you're going to have more people demanding of their government, but how do you - but if the United States - how would the United States best prosper in that world?

QUESTION: Well, we're going to have more innovation, going to get our education system running.

SECRETARY RICE: Yes.

QUESTION: We're going to go out - there's a lot of big fundamental (inaudible). Do you think - which country in the world has taken 400 million people out of dire poverty in the last 15 years? It hasn't been done. It's India.

SECRETARY RICE: India, right.

QUESTION: Right. They've dropped (inaudible) --

SECRETARY RICE: Yeah.

QUESTION: -- such nonsense, their realism and so on. Manmohan Singh came in as the Finance Minister, the Prime Minister (inaudible) kept going. 400 million people have come out of starvation. It's remarkable.

SECRETARY RICE: It's also one of our best relationships.

QUESTION: It's going to make - (inaudible). (Laughter.)

SECRETARY RICE: We really - we really actually worked hard at that one at the U.S.-India --

QUESTION: (Inaudible).

SECRETARY RICE: I can do that. I can do that.

QUESTION: But it is a remarkable thing, 400 million people and it's - you know, it's capitalism.

SECRETARY RICE: And a functioning democracy.

QUESTION: It's just capitalism.

SECRETARY RICE: And a functioning democracy.

QUESTION: Well, and some sort of rule of law.

SECRETARY RICE: Yes, (inaudible).

MODERATOR: Madame Secretary, we thank you very much.

SECRETARY RICE: Thank you. Thank you. Pleasure.

2007/807