MR. CASEY: Okay. Afternoon, everybody. Happy Friday. Pleased to be here with you. Don't have any opening statements or announcements, so let's go right to questions.

QUESTION: Do you have anything on Secretary Armitage's discussions with President Musharraf in 2001?

MR. CASEY: Well, George, I think the President made it pretty clear. I think Mr. Armitage has spoken to this already. And look, let me just put it this way, Pakistan from the very beginning, from immediately after September 11^th, has shown a willingness in word and then shown a willingness in deed to be a major friend and ally to the United States in the war on terror. Certainly there was no instruction given to Mr. Armitage and it's never been a matter of U.S. policy to threaten military action or bombing of Pakistan. And I have gone back and looked at the official records we have on those conversations and there's certainly no indication that any kind of comment like that was made.

QUESTION: Could you make them public?

MR. CASEY: We generally don't make public readouts of diplomatic exchanges. But again, I can assure you that there's nothing in there that would indicate any kind of threat.

QUESTION: It's something that happened five years ago and is very much in the news now. Just thought I'd ask. And just to be clear, George had said in his conversations with President Musharraf, but I think the remark is said to have been one that -- in his claim to made to the head of Pakistani intelligence.

MR. CASEY: Yeah. And that's what I'm referring to is that in the records of that conversation, there is certainly no indication that any kind of comment like that was made.

Mr. Lambros, I guess you're it.

QUESTION: Yes. It's a special question and I need a special answer. Before yesterday New York City Secretary of State Condoleezza Rice and the Foreign Minister of Greece Dora Bakoyannis, Canada, Peter MacKay and Australian, Alexander Downer had a kind -- what can I say -- a special private dinner in a beautiful restaurant, downtown Manhattan. May we have the purpose of it? It was social or political? Do you have any press guidance otherwise, Mr. Casey?

MR. CASEY: Honestly, I don't, Mr. Lambros, and I'd refer you up to the folks in New York for any kind of discussion of that meeting. Certainly, as you know, the Secretary has always enjoyed an opportunity to talk with a number of her counterparts certainly including her Greek one. I believe that we look forward to having a more formal opportunity to have her speak with the Greek Foreign Minister later next week as well and we'll probably give you some more information about that as it goes on.

QUESTION: And one more, the Turkish Government of (inaudible) Erdogan, Mr. Casey, yesterday unfortunately dismissed again the plans to reopen the Theological School of Halki of the Ecumenical Patriarch (inaudible) of Constantinople in Turkey, despite your expressed concern, so clearly on religious freedom. Any comment on that?

MR. CASEY: Well, again, Mr. Lambros, I haven't seen those specific reports. Our concerns about this issue are well known. Certainly it's an issue that will continue to come up in our conversations with the Turkish Government.

Yeah, Arshad.

QUESTION: Palestinian Prime Minister Ismael Haniyeh today flatly ruled out joining any unity government that recognizes the state of Israel. Do you have any comment on that?

MR. CASEY: Well, I haven't seen his remarks. But again, I think the Quartet made very clear in the statement that it released after its meeting that the international community continues to believe that the only way forward is to have a Palestinian Authority government that recognizes the conditions or that adopts the conditions laid out by the Quartet, previously back in January, including recognition of Israel and of previous agreements. That's what we're all looking for and I think that's what's important for us as we move forward.

That said, the Quartet also did recognize that the inability of the Hamas-led government to meet the needs of its people and to be able to be a legitimate partner for peace is something that has caused hardship for the Palestinian people and that is why the Quartet again renewed its call for support to be given directly to the Palestinian people, including the renewal of the special mechanism which provides a means to give Palestinian individuals not associated with the government some means of support in this difficult time.

Did you have something else, Arshad?

QUESTION: I've got a related --

MR. CASEY: A related question.

QUESTION: -- well, I've -- same area, just --

MR. CASEY: Anybody else on the same subject? Okay, well, Joel, let me -- let's have Arshad do his follow-up and then we'll go over to you.

QUESTION: Hezbollah leader Nasrallah held what has been described as a divine victory rally today. And among other things, he said that Hezbollah still has more than 20,000 rockets, even after the Israeli invasion. What do you think about their staging such a victory rally and what do you think about his claim that they still have significant armaments capable of striking Israel?

MR. CASEY: Well, Arshad, certainly we're concerned about the continued armaments that may be in the possession of Hezbollah. Resolution 1701 makes clear that what we need to see happen as the peace process moves forward and as that resolution is implemented in Lebanon is in fact a disarming of Hezbollah and any and all other militias or armed groups that are not the armed forces of Lebanon.

In terms of the rally itself, obviously, we support the right of individuals in Lebanon or any place else to peacefully express their views and opinions. And I think it's a testament to the democratic values and instincts of the Siniora government that they let this rally move forward and that the Lebanese security forces managed it in a peaceful manner. I wish I could say that we were confident that Hezbollah was as tolerant as the Siniora government was of those wishing to express views that are not necessarily in harmony with it.

Joel.

QUESTION: Tom, in the last week with what's gone on with the UN, it's pro versus con. You've seen, for instance, President Hugo Chavez seemed to put together a whole bunch of rogue nations, especially those in the Middle East with Iran, with Syria. And it's just coming out of the news now that, for instance, Chinese missiles were imported into Iran, given to Hezbollah. Is this under way in the respect of talks to stop this infiltration of buying arms everywhere? And what are your feelings concerning this apparent recognition of these various countries working against our wishes here in the United States and in fact the UN's mission as well?

MR. CASEY: Well, Joel, I think -- first of all, I think the President spoke pretty directly to the concerns that the broader international community has about extremism in the world and about those that promote it. Certainly our views on any number of the countries that you just discussed are well known. We've heard a lot from the President, from the Secretary and from others on that and I don't have anything in particular I'd add to it at this point.

Let's go back here.

QUESTION: It was just reported in Jiji Press, and this is kind of really recently so you might not have heard anything about it yet, but that in Japan's (inaudible) counterfeit U.S. dollars, possibly from North Korea, were found. Is there -- do you have a State Department reaction to that?

MR. CASEY: No, I'm sorry. I haven't seen those reports. I can say certainly we're concerned about counterfeiting coming from any quarter, as is Japan, as is any other country that reasonably wants to protect its currency. As you know, we've taken actions in the past against illicit financial transactions involving North Korea. But I certainly don't have anything on that specific report for you.

Let's go over here.

QUESTION: There's on-going talks between the EU and U.S. on the transfer of air passenger data. I believe that there was some talks either today or yesterday. Have you any update on that? And also in these negotiations, I mean, they were necessitated by a court ruling which annulled the first agreement because of a faulty legal basis. But in the new agreement is the U.S. pushing for any changes to the substance of the agreement or is it just going to back the same agreement with a different legal basis?

MR. CASEY: Well, yeah, obviously there are a lot of legal issues involved here. What we want to see happen is a system be in place for the sharing of this data in a way that meets both sides legal concerns and it allows us to assure ourselves, both for Europeans as well as for Americans, that we're able to have some of the basic information available that should be able to help us prevent potential terrorist actions. But I don't have any readout on the specific discussions. There have been a number of conversations that are going on. But we are dedicated to working with our European partners to resolving this issue in a way that's acceptable to both sides.

Let's go back here.

QUESTION: I wanted to go back to the UN and President Chavez. He's been calling the U.S. Government names: the President, the Secretary of State, for a long time, but now he did it in New York. He called the President the devil. Then yesterday he referred to Mr. Bush as an alcoholic. And the question is: Will there be any diplomatic fallout for Venezuela over Mr. Chavez's actions in New York?

MR. CASEY: Well, look, I've addressed this the last couple of days. I think, you know, it's up to the people of Venezuela to decide whether -- what President Chavez has said is the way they would like to see themselves represented and the way they'd like their leader to behave. That's a call for them to make.

In terms of reaction to it in the U.S., well, I've certainly seen comments by any number of American officials, including members of Congress from both parties, responding fairly forcefully to it. Whether that will have any impact in the long run, you know, I don't know. Certainly I think we look to see that all leaders that come to the United Nations behave in a way that is good and responsible representation of their country and of their people. But again, it's really up to the people of that country to decide whether, you know, President Chavez or any of the other leaders that appeared did that job well or not.

QUESTION: I guess a question people have is why the U.S. Government puts up with this, and if there's anything that the U.S. Government could do besides what you're telling us?

MR. CASEY: Well, first of all, we think it's very important that the UN remain and be a forum for all nations to be able to express their views. We treat our obligations under the Headquarters Agreement very seriously. We're the host of the United Nations and we treat that obligation seriously. We need to be a good host and that includes at times having people come to New York and come to the UN from countries that we don't have diplomatic relations with. Whether or those individuals behave as good guests or not, well, that's something that I think everyone and every host has to deal with from time to time. But I don't think you'll see any changes to our basic approach to how we handle representation at the United Nations.

Let's go -- Mr. Lambros, do you want to get another one?

QUESTION: Yes, on HIV. According to reports of dispatches, specifically to the Russian newspaper, The Moscow Times, Kazakhstan Health Minister has been fired by the Prime Minister due to the point that 55 children in a (inaudible) hospital have been infected with HIV virus and 5,000 children in the same hospital under the age of three have contracted -- was infected. And 4,000 other children are to be examined for the HIV virus. Do you have anything on that or to make any comment, since --

MR. CASEY: Well, Mr. Lambros, in terms of what's occurred internally within the government of Kazakhstan, I'll leave it to their officials to talk about. What I do think this case may point out is just simply the fact that HIV/AIDS is a serious problem. It's a serious worldwide problem. It's one of the reasons why the President and the U.S. Government have devoted not only so much attention to it but so much resources towards trying to be able to provide treatment as well as work on prevention programs. That's certainly something we'll be continuing. But I don’t have anything specific on this incident.

QUESTION: One more on the same issue. Anything to say about the Bulgarian nurses issue who infected 426 children with HIV in the children's hospital in Libya during a so-called humanitarian mission. And yesterday, Mr. Casey, the trial in Tripoli postponed it due to the failure of the lawyers to appear again. Anything to say on this crucial issue, since they are facing death penalty?

MR. CASEY: Well, Mr. Lambros, I don't have anything new to offer you on that case. Our position on that remains the same. We recognize that this was a terrible tragedy. At the same time, we believe that there's a means that can be found to ensure that the Bulgarian nurses, as well as Palestinian doctor involved in this instance, should be allowed to go home. We certainly, again, have great sympathy for the victims in this case. That's why we've been working with our European friends and others on means of compensation including through a new international fund that's been established.

QUESTION: Thank you.

QUESTION: Tom, the situation in Hungary seems to be getting out of hand with recent riots and protest, possibly on economic issues. But as you recall back in 1956, there was the huge conflict with the former Soviet Union. Are we actively involved -- I would assume the Europeans are -- to quell the situation there?

MR. CASEY: Well, first of all, while people can make what comparisons they want, there's a democratically elected Government in Hungary, which is a very different situation than during the Cold War. This really is an issue that's an internal political issue. It's something that we have confidence that the Hungarian people can sort out and decide for themselves. We certainly wish to see that this matter be resolved in a peaceable way and without any resort to violence. My understanding is that there are ongoing discussions among the political leadership there. And again, we want to encourage people to work this out, but this is really an internal Hungarian matter.

Arshad.

QUESTION: One last one. Did you ever get any comment on my question of yesterday regarding Russian's treatment of Exxon-Mobil?

MR. CASEY: Yeah, and I'm very glad you asked that since I know several people, including a mutual friend of ours, were intimately involved in preparing this for you. So let me just address this.

First of all, I'm not aware of actions taken against any U.S.-based companies on this issue. But the United States is very concerned by recent Russian Government action threatening the revocation of Shell's environmental permit for the Sakhalin II oil and gas project. Frankly, these recent actions cast doubt on Russia's willingness to uphold its recent commitments, including the commitments that were made by all G-8 countries at the St. Petersburg summit and those commitments including agreeing to the development of transparent, efficient and competitive global energy markets, as well as specific obligations to uphold contracts and to generate sufficient, sustainable international investments upstream and downstream in the energy sector.

So again, while we're not aware of any similar actions taken against Exxon-Mobil or other U.S. companies involved, we do believe that the actions that have been taken against Shell are concerning, and we call on Russia to uphold the commitments on energy, including its commitments on upholding contracts that they made at the St. Petersburg Summit.

Okay, here.

QUESTION: Yes. This morning the Times of London had a report about Afghanistan and about self-imposed military restrictions on a lot of the NATO partners there: German planes won't fly at night and Dutch troops aren't allowed to leave and have contact with Afghans in case they come into combat. Presumably this isn't news at all to you guys, but are there any plans to lean upon NATO allies to up the ante in their military efforts there?

MR. CASEY: Well, several things. First of all, I think NATO is already doing quite a good job in terms of handling its area of responsibility in the south. There have been some real successes made and I know General Jones has briefed on that fairly recently, both to NATO allies as well as back here to the media. So I'd refer you back to some of his comments.

In terms of the rules of engagement for various NATO military forces, obviously each country establishes those on its own within the broader parameters that are established for any given NATO operation. But that really is something for NATO military officials to work on. What I do believe though, is that those NATO troops that are already working and on the ground in Afghanistan are working effectively and are doing a good job. We certainly hope that the call that's been made for additional NATO forces will in fact be heeded. And again, I've heard General Jones say that there are several countries that have agreed to provide additional forces to meet the additional requirements that have been laid out and we look forward to that happening as soon as possible.

Okay. Let's go back to Mr. Lambros, one more. You're getting a lot in today.

QUESTION: Yes. Any update on the military junta in Thailand, and I'm wondering any communication with the Bangkok authorities to this attack?

MR. CASEY: Any communication with who?

QUESTION: With Bangkok authorities.

MR. CASEY: Again, we've continued to be in contact with all the players in Thailand; that includes conversations with the military and those involved in the current military leadership. But I don't have anything specific for you to update beyond what I discussed with you the last couple of days.

Okay, let's go back here.

QUESTION: On WTO. There's been talks in Australia recently. Susan Schwab had some things to say. Do you think there's going to be an offer on farm subsidies this side of the U.S. elections or not?

MR. CASEY: I'll agree with whatever Susan Schwab said on that one. I don't have anything particular for you on that issue. It's something where we continue to look to all countries to come up with a reasonable solution to that. We're certainly dedicated to advancing the Doha round, but I don't have anything specific in terms of new initiatives or proposals.

Okay. Anybody else? Joel, last one.

QUESTION: Yes. Virgin Airlines mogul Branson has offered $3 billion for global warming and does that affect how the State Department looks at the Kyoto treaty? And secondly, there are other entrepreneurs that are suddenly giving vast sums of money to fight poverty, AIDS, and other type ills, for instance, in Africa. Will that, because they're donating all this money, will now USAID drop its particular funding to some of these projects?

MR. CASEY: Well, charitable giving on the part of U.S. individuals, corporations or nongovernmental organizations has always been a large part of the contributions that the United States as a whole makes to dealing with all kinds of problems, whether they're global issues like climate change or more specific issues related to any given country. Huge amounts of support from individuals in the United States went to those that were victims of the Tsunami in Asia or of the earthquake in Pakistan, and certainly American generosity is very much a part of the overall picture in terms of assistance that the United States provides to other countries. So the short answer to that, Joel, is no, the giving of individuals or corporate entities does not impact directly on our decision-making.

Thank you.

(The briefing was concluded at 1:09 p.m.)