Roundtable with Traveling Press

SECRETARY RICE: Why don't we just start (inaudible)?

QUESTION: Can I follow up with a non peace process question, which is Tony Blair talking about -- sorry about that -- Tony Blair talking about these 15 British sailors and marines, their detention is unjustified and (inaudible) coalition partner. Are those the same sentiments you share?

SECRETARY RICE: They ought to be released and I fully -- we also are talking to the British about it and we think they ought to be released. I don't think, Jonathan, it helps for me to make very much comment on this, but they ought to be released, and released immediately.

QUESTION: Madame Secretary, you're deep in conversations with the Palestinians now, but in the meeting with the foreign ministers yesterday there was discussion of the fact that maybe this is an unstable government, perhaps looking at the collapse of this government and perhaps we need new elections. Do you have concern about that or what would you -- ?

SECRETARY RICE: What government? (Laughter.) Oh, a Palestinian government? (Laughter.)

Well, remember that Abu Mazen is elected in his own right as President of the Palestinian Authority and he is the head of the PLO and therefore the negotiating partner for the Palestinian people. I don't think anybody challenges that, including Hamas.

The government is not a government that meets the international standards and I think obviously if you were ever to talk about establishing a Palestinian state, you would have to do that with a government that does recognize the right of the other party to exist and renounces violence and so forth.

But I -- whatever -- this government is just barely formed, so this is a little early to talk about what may happen. But whatever happens, Abu Mazen is the elected president.

QUESTION: Just to follow up, did he say anything about that today? I know you can't share your conversation with him verbatim, but any indication that that could change anytime soon?

SECRETARY RICE: Well, right now they are very focused on trying to establish a government, I think, first and foremost to prevent further violence between Palestinians. I think that's a principal motivation for the Palestinians. But we talked mostly about how to continue assistance to the Palestinian people, how the United States would do that, and we did talk some about the issues that I've been talking with Congress about: the need for a firewall on any security assistance that might go to forces that are loyal to Abu Mazen as we try to help the international effort to restructure and reform the forces. We talked quite a long time about that. General Dayton was there, so we talked with General Dayton and with Mohammed Dahlan, who's in charge of security reform.

We spent a good deal of time talking about the horizon, the Arab horizon for peace between Israelis and Arabs, and of course some about the Palestinian side, too. But the government has just been formed, so I don't think anybody's talking about its collapse at this point.

Anne.

QUESTION: Do you have any sort of backup or contingency plan on the part -- on both sides if, I mean, Abbas for whatever reason isn't the guy who can get this done, and of Israel's Olmert, who I think is now at 3 percent, leaves office and is replaced by someone else.

SECRETARY RICE: Well, first of all, these are our partners and we're going to deal with our partners, in both cases, a democratically elected partner.

The thing to remember is that I think that the desire for peace and support for a two-state solution is far broader in the two communities, among the Palestinian people and among the Israeli people, than just the two leaders. It's, in fact, something that has shown up in all kinds of polls. It's shown up in all kinds of discussions with people on both sides that the Palestinian people and the Israeli people would like to have peace. And so it's broader than any two leaders at any given time, but they are respectively the elected leaders of their people and so my job is to work with them.

Yes.

QUESTION: Madame Secretary, I'm interested a little bit in an Iran background factor in all this, the degree to which Iranian influence over the Hamas-led government's security forces played a role in any of your discussions with President Abbas and in your discussions with the Arab Quartet as well.

SECRETARY RICE: Well, there is concern about Iranian assertiveness and concern about an Iranian supply to extremist groups. I think it's more obvious and evident when one talks about Hezbollah, but of course Iran did step in and say they would supply Hamas and there is a great concern that in fact they may be doing that and indeed putting negative Iranian influence into an already difficult situation between the Palestinians and between Palestinians and Israelis.

So yes, we talked about that. It is why it is extremely important, as I said to the U.S. Congress when I testified not this last time but the time before that, that one would not want to be in a position in which Hamas' forces got stronger and Abu Mazen's forces did not. And so the need to support the forces that are loyal to the President and therefore loyal to a person who adheres to the international standards, that's what the roadmap foresaw in supporting the reform of the security forces and that's what we're going to do. But sure, Iranian force is a real concern and Iranian actual active financing and support to Hamas, yes.

QUESTION: Can Abbas' intelligence forces do anything about that problem? It's not their units.

SECRETARY RICE: Well, there should be considerable international pressure and concern about smuggling, for instance, through the tunnels. We talked with the Egyptians and others about that problem, and hopefully people -- I know people are trying, but the efforts need to be redoubled.

QUESTION: I'm just wondering if you could just take us a little bit into your thinking as to how things have evolved over last few months. When we were here in January and you announced the three-way meeting, which then happened in February, but was that -- that process didn't seem to go quite as far as one might have expected because of the Mecca agreement, and now we're here and you're talking about parallel steps. I'm wondering if you can go back a little bit and then take us a little further. I'm still trying to get my head around what exactly you're trying to do here, where you're trying to go.

SECRETARY RICE: There's been progress, Glenn. (Laughter.)

QUESTION: No, no. I know, but -- (laughter). I don't want to pre -- pre-go ahead of your announcement tomorrow or your remarks tomorrow, but --.

SECRETARY RICE: I'm making remarks tomorrow?

QUESTION: Rumors of that. I keep seeing Chris Brose in the background taking notes as we meet here. (Laughter.)

SECRETARY RICE: When I announced the trilateral meeting back in January, I think I made clear at the time that we would do a trilateral meeting, that the hope was that they could begin to pursue or begin to discuss, begin to explore the political horizon. I said at the time that we wouldn't know what (inaudible) in a trilateral format, that I thought sometimes it would be best to meet bilaterally, sometimes they would meet bilaterally alone, but that the important thing was to have discussions moving forward.

Now, at the time of the trilateral meeting, you'll remember that circumstances were extremely complicated because Mecca had just happened and the effect of the political unity government -- or the national unity government, which had not yet been formed, was quite obviously present and quite obviously in the room when we met because it was the first time that the Israelis and Palestinians, Prime Minister Olmert and President Abbas, had encountered each other since the Mecca agreement. And it isn't surprising that as a result, a good deal of that meeting was taken up with trying to get back on footing where their relationship would continue in a fruitful direction whether they were talking about the political horizon or day-to-day issues if we continued to reestablish that that relationship was going to go forward, and I think did that. I think I mentioned at the time I was very glad that the meeting was schedule because I'm not sure that we would have been able to schedule it in the wake of the Mecca agreement. We got through that and we began some very tentative initial discussions about the future.

Coming back this time, I really feel, and I think I'm going to be proven to be right about this, that the really important thing is to establish an approach that I can use with both sides. They don't -- it isn't their approach. It's my approach. And it's how I plan to try to structure my discussions with them in parallel so that I'm getting a consistent view of how they see the course ahead of them.

Now, at some point, there is no doubt that they've got to enter the room together either with me or without me to continue talking about the political horizon. But given where we are, given all the uncertainties that we've been through, given that there are changed circumstances in the wake of the Palestinian unity government, it seemed to me that the best geography this time was bilateral and parallel.

It's also the case that I spent a lot of time this time talking to Arabs about how that process, the Arab-Israeli reconciliation process, can help to stimulate and push forward the Israeli-Palestinian process. They need to go hand in hand. It can't be sequential somehow. And right now, the Arab initiative is, in a sense, sequential, but the -- the way that it's written would be sequential. I think they have to move more also in parallel, so I've begun those discussions. But what particular geometry we use at any given time, I think we have to use it and continue to adapt to the circumstances.

QUESTION: Just to follow up then, so in these parallel discussions will you be -- I mean, not necessarily shuttling back and forth, but you'll be kind of sketching that political horizon with the -- you know, getting the sense of what the Israeli political horizon -- view of the political horizon is and what the Palestinian view is, and then trying to bridge that?

SECRETARY RICE: Well, initially to try -- if you're going to talk about a political horizon, you have to know what issues people think are blocking the horizon. What are the things that have to be resolved? And I know everyone thinks oh, we know what the issues are. I actually don't think we do. I think that not enough time has been spent on questions like what security concept is going to make this work in today's circumstances, not in the circumstances of 2000, in today's circumstances with Gaza, for instance, already evacuated by the Israelis, not the circumstances in 2000. So what security circumstances is -- what is the security concept going to look like? We've had now the experience of EU monitors at Karni and Egyptian help at Rafah. What does that tell us about what kind of security concepts and what kind of international help is going to be needed? There are a whole host of questions that need to be -- but they're my questions right now. I want to know what their questions are.

And there are some agreed principles that everybody understands, but some other things have been put on the table since then. The President has talked about the issue of realities on the ground. What does that mean? And then there are, of course -- there's going to be -- we're going to need international help for this whole process. So if you begin to lay out an agenda that both sides understand as the agenda, I think you'll make progress.

QUESTION: Can you call it an agenda now? That's (inaudible). Can we see the agenda? (Laughter.)

SECRETARY RICE: Approach. Approach to get to an agenda. Yes.

QUESTION: Looking back, it seems like the TIM was really important in alleviating pressure on Hamas.

SECRETARY RICE: No, in alleviating pressure on the Palestinian people.

QUESTION: And in so doing, it alleviated pressure on them. I mean, it essentially paid salaries for their employees, not directly but through -- not through the government but through their bank accounts.

SECRETARY RICE: I think it -- I think we looked at it (inaudible) that the TIM --

QUESTION: You don't have any regrets about it?

SECRETARY RICE: No, no. In fact, quite the opposite. I don't think Hamas was getting financial support, which is why I think they kept showing up (inaudible) showed up a couple of times at various processes (inaudible) money. I think the TIM demonstrated that you can support the Palestinian people and particularly the people who might have no other means of support and not support the Hamas-led government. So I think the TIM has actually worked pretty well and I'm glad that it's going to be extended for a number of months while the situation works out.

I also think it's remarkable that the amount of assistance going to the Palestinians actually has increased during the Hamas period without going to the Hamas government. It shows that there was some creativity used in the initiative.

QUESTION: Finance Minister Salam Fayyad actually had said that much of the money that went to the President's office, the assistance can't be accounted for because there are no -- there was no oversight involved. Does that concern you at all?

SECRETARY RICE: Well, I think he's concerned -- it's not so much the President's office. He's concerned that -- I should let him speak for himself -- because he's spent a lot of time when he was finance minister before, including in placing a series of controls and accounting practices which I think the former government, the Hamas government, perhaps didn't respect. And those controls have eroded, he said.

It's very important that whatever he does that he establishes controls, but I want to remind you that he has two hats because he is also the PLO finance chairman and that's a different role than the finance minister for the government.

QUESTION: He seemed to indicate though that these channels, these Hamas bypass channels, were particularly -- were problematic.

SECRETARY RICE: Well, I think more problematic is Hamas and their suitcases of money. I'm pretty confident that the TIM worked well and I'm very confident about humanitarian assistance and security.

QUESTION: Madame Secretary?

SECRETARY RICE: Yes.

QUESTION: What do you foresee the Saudis doing in the reasonable-to-near term? Do you see them meeting openly with any Israeli officials at any level, some senior level? And do you think Prime Minister Olmert's remarks today about Abbas have complicated your situation?

SECRETARY RICE: Which ones are you referring to?

QUESTION: Well, there were two kinds of -- where he complained that Abbas had sort of committed himself to the unity government before obtaining the release of Shalit.

SECRETARY RICE: Well, Abbas answered that at this press conference. And I -- we would all like to see Gilad Shalit released and I think Abu Mazen would like to see him released. If he could get him released in the next hour, he would do it. But I don't think that he's being held by people who want peace between Israelis and Palestinians. It's a complicated process of getting released. Everybody is working very hard. But -- the Prime Minister spoke his mind on this. I don't think it's complicated our discussions. I think we know what our discussion is about and he has met with Abbas since this and I think he will continue to, I mean since I was here last, and he will continue to (inaudible).

As for the Saudis, the Saudis have to decide what they'll do. They obviously were, the then Crown Prince, was the author of the basic plan that became the Arab initiative. I think that demonstrates the King, now King Abdullah, has an interest in peace and in moving the peace process forward. I think that he is a creative man because at the time of the Crown Prince initiative, really nothing like it had been offered before. So I hope that that creativity and that desire for peace will help the Saudis find a way to actively support -- more actively support the peace process, although they have been actively supporting Abu Mazen, will be talking to them. But I can't speak for them. I do know that given that the Crown Prince -- then Crown Prince was the author of the peace plan, I assume they want to have a very active role).

QUESTION: Yeah, but you said hope and assume. What have they told you or signaled to you about what they're going to do?

SECRETARY RICE: We're going to keep working with them and when they have something to say or I have something to say about our conversations, we'll say it. But I (inaudible).

QUESTION: Secretary Rice, are you going to handle, continue to handle, this yourself? Have you ruled out the possibility of appointing an envoy?

SECRETARY RICE: I've not ruled out anything, Helene, but I think for now I have to be really actively involved. I don't think there's any substitute for that right now. But let's see how it evolves. I'm quite flexible on what geometry we use. I'm quite flexible on what mechanism we use. I'll want to go back and talk to my team and assess how we keep moving forward.

You're right, I have a lot of other things, including probably, hopefully several ministerials coming up on other subjects in the next couple of months. But I think that it's been very useful to do this at my level now and I will continue to discuss at my level whether we need something or someone to work in an interim when I'm not here. I think we'll have to assess (inaudible).

QUESTION: Madame Secretary, is there any role for a greater involvement by the President in this, or is this situation simply too amorphous for him to be more involved?

SECRETARY RICE: Well, first of all, he is in -- the person with whom I have developed the strategy for how we move forward. We have had endless conversations and discussions about how to move forward. It is almost always -- and you know I'm with the President a lot, and it is almost always a subject when we are together. When there wasn't a national unity government, when one was about to be formed, after one was formed, how did that affect what we would do? What should we do about trying to encourage an Arab-Israeli horizon? He got on the telephone before I left to talk to leaders about it. He's talked to European leaders about it, to Prime Minister Blair, to Chancellor Merkel. He is very, very involved in the development of how we're going to go forward and he is actively engaging other leaders in doing this.

At some point in time, if there is more for him to do, which I think there undoubtedly will be, I know he wants to do it because he's very committed to trying to move this forward. He is, after all, the author of the two-state solution more than you will probably ever know because when he was putting that speech together, it was the President who insisted on being clear that we were talking about the formation of a Palestinian state and even clearer what it would be called. So he's very much the principal author of all of this.

QUESTION: What are your hopes for the -- an obvious question. What are your hopes for the Riyadh summit in the next few days?

SECRETARY RICE: I don't want to -- it's obviously up to the Arabs what they do, but there's a need in the Middle East to have hope for people who want a peaceful road and a condemnation of those who don't, an understanding that those who are -- that it's a time for peace and a time for the rejection of violence. These are all concepts that have been in the Arab consensus and I really hope that there will be a reaffirmation of that.

But I've had very good discussions with the Arab Leaguers and I have a sense that they understand and want to exercise their responsibilities for moving forward for peace. And I don't know how they will express it, but this is a time when it seems to me that there is a great desire to try and promote and a great desire to try and create the conditions for peace.

QUESTION: Secretary Rice. I'm Jonathan Ferzinger from Bloomberg. Can you explain the rationale that you use to decide which members of the new Palestinian cabinet that you can deal with? I mean, according to Prime Minister Olmert, Salam Fayyad is no longer, if you will, kosher. But the U.S. is dealing with him.

SECRETARY RICE: Interesting concept. (Laughter.) We're doing this on a case-by-case basis, but clearly Hamas is a terrorist organization. You cannot deal with, we will not deal with the members of a terrorist organization. There are people who have devoted their lives, their political lives, to peaceful resolution of this issue. Salam Fayyad is someone we know to be that kind of person. I'm sure that there are others. But the criterion for me is really very clear: Have you renounced violence? Do you believe that there is a state of Israel and it has a right to exist?

QUESTION: Individually?

SECRETARY RICE: Individually.

QUESTION: So members -- individual members of the cabinet --

SECRETARY RICE: It does matter, it does matter, whether people have a record of having fought for peace. It matters. Now, I don't know that we will meet with -- how many people we will meet with or when or under what circumstances. But we do need to be able to stay in touch with a broad range of Palestinians who are committed to a two-state solution. We need to be able to do that. And Salam Fayyad is somebody that we know well to be one of those people.

Last question.

QUESTION: I'm sorry if it sounds like I'm sort of beating a dead horse, but I just wondered if you can give us a little more idea of your political approach -- your -- sorry, your -- no, your -- (laughter).

SECRETARY RICE: Well, we've -- there have been lots of efforts at solving the Palestinian-Israeli conflict. We all know what they are. We all know that they haven't gotten there. I said to you, I think the last time I was here, I've actually spent a lot of time reflecting and talking to people, including the President, at great length, about why that might be the case. Why is it, despite the fact that people will tell you, oh, we all know what this looks like -- how many times have you heard, "We all know what this looks like." And you say, okay, if we all know what this looks like, why haven't we been able to get there?

And to me, the most important thing is to lay the groundwork with each party, ultimately put them together, before you start forcing people to make negotiating positions known. Because once you get to that place -- yes, maybe you'll get there, but things also start to harden. And so my approach has been, I admit, careful. It's been step by step. I've not been willing to try for the big bang. I don't think that that's where we are. I think there are a lot of moving pieces here. I think the Palestinian unity government was a new factor as of a month ago.

And so to take the time to talk to the parties on the basis of the same questions and same issues I think is well worth the time, and that's what I'm going to try to do. And I can't promise you that I won't have to do that again before we can even move the process even further forward. Because the question here isn't speed; the question is trying to really move forward toward the establishment of a Palestinian state that uses all the tools that we have -- the roadmap, if possible the Arab initiative, the -- I continue to believe that one of the most important speeches of all time is the Sharon Herzliya speech -- the President's various interactions with these leaders, and the desire I think now across a broad range of both polities for a two-state solution.

Thank you.

2007/T4-3