Interview on CNN's Late Edition with Wolf Blitzer

(12:10 p.m. EDT)

MR. BLITZER: Secretary Rice, thanks very much for joining us. I heard this morning your announcement that the Israelis and the Palestinians have agreed to bulldoze the settlers' homes in Gaza. That was quite a surprise to a lot of people who thought that maybe as a goodwill gesture the Israelis should leave those homes intact for the Palestinians to take control of. What happened?

SECRETARY RICE: Well, the important point here is that they've decided together that they believe that the removal of homes is in the best interest of the Palestinian people. And I should say, Wolf, that there is a lot of work to do. Jim Wolfensohn is very involved in it -- the Quartet envoy -- in all of the details of how they do this.

But, essentially, the Palestinians have a master plan for how they would like to plan Gaza, particularly some of the housing issues, and these particular houses don't really fit into that plan. It's a simply math matter. You know, you have some 1,200-plus houses and some 1.3 million people and they need a different kind of housing. And one of the things that I'll do when I go to visit some of their Arab neighbors and also when I go to the G-8 is to talk about how the international community might support some of those efforts in the master plan.

MR. BLITZER: Do you believe this Israeli withdrawal from Gaza scheduled for August will go forward smoothly?

SECRETARY RICE: I have every reason to believe that the parties are doing everything that they can to make it go forward smoothly. I was quite impressed with the level of activity here and the planning on both sides. The coordination between them is now starting to take place. General Ward, who is the U.S. security coordinator, and Mr. Wolfensohn have been meeting with the parties. They are going to start some more in the way of trilateral meetings to keep this process moving forward because there is a lot of planning to do. This is a very complex operation that will take place from the Gaza, and the good news is that the parties seem completely devoted to the principles of a peaceful and orderly withdrawal. But they have a lot of work to do.

MR. BLITZER: In April of 2004, President Bush wrote to Prime Minister Sharon these words: "In light of new realities on the ground, including already existing major Israeli population centers, it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949."

Is that still the Bush Administration policy?

SECRETARY RICE: It is still the Bush Administration policy, but you'd have to read a little further as well, Wolf, which goes on to say that adjustments have to be mutually agreed in negotiations at the time of final status. And so both of those are commitments: the commitment that the United States understands certain realities; but also the commitment that these are issues that should be mutually agreed by the parties. And I think that when President Abbas was in Washington we had discussions of that and that the Palestinians were satisfied that the United States does not believe that the facts on the ground should be -- new facts on the ground should be created. This has to be done at final status negotiations.

MR. BLITZER: In that same letter of April 2004, the President suggested that Palestinian refugees should not expect to be allowed to return to what were their homes in Israel proper as a result of any settlement. Is that still the U.S. policy?

SECRETARY RICE: Again, Wolf, I think that all of these are final status issues that will have to be mutually agreed. But the President was simply stating a fact, a reality, which is that given that there will be a Palestinian state, that creates a different reality for Palestinians worldwide.

MR. BLITZER: Did the Israelis, in your talks in Jerusalem, promise to stop selling sophisticated weapons to China, as you've been demanding?

SECRETARY RICE: Well, we have had very good discussions with the Israelis. These have taken place principally between the Defense Department and the Ministry of Defense here. I think the Israelis now understand fully our concerns about the transfer of sophisticated technology to China. This is a concern that we have registered with a number of countries, but particularly those with which we have close defense cooperation relationships. And the Israelis here have told me that they understand those concerns. They are working together on a way forward with our Defense Department, and I believe we'll be able to get there.

MR. BLITZER: But you're not there yet?

SECRETARY RICE: I think there is still some work to be done; but a lot of work has gone into this and Defense Minister Mofaz, again today -- or yesterday when I met with him wanted me to be clear that the Israeli Government takes our concerns very seriously and wants to try and resolve them.

MR. BLITZER: There's a Gallup poll on Iraq -- we'll switch gears and talk a little bit about Iraq -- suggesting that, increasingly, Americans would like to see the U.S. start withdrawing troops from Iraq. In February, 49 percent said yes. Now it's up to 59 percent. And there are some members of Congress -- Republicans and Democrats -- calling for an exit strategy, an end date when you're going to start pulling troops out.

Do you support having a timetable for the start of a U.S. military withdrawal?

SECRETARY RICE: What we need, Wolf, is a recognition that we are moving toward the day when coalition forces are indeed going to be not needed for these -- for a lot of these tasks, and where they can certainly start to come home. We really look forward to that day. But that has to be a day when the Iraqis are capable of carrying out the important security functions themselves.

And we're not talking about the Iraqis having to be capable of meeting a massive army. We're talking about counterterrorism operations. They are being trained for those now. They are carrying those out jointly with us up on the Syrian border as we speak. They have carried out protection operations as their elections took place just in January.

So they're making progress, and as they make progress then you will see fewer and fewer coalition forces engaged and fewer and fewer coalition forces needed. And that is absolutely our desire as well as, I think, the desire of the American people.

But insurgencies are defeated not just militarily; they're defeated politically as well. And so you have to look also at the tremendous progress that the Iraqis are making on the political front, having held one election, writing a constitution now, and getting ready for elections again in December. The insurgency cannot continue to exist if it loses the Iraqi people; and with every day the Iraqi people see their future in their political process, not in some alternative. And since the only alternative that the so-called insurgents and the terrorists are actually offering is to continue carnage, to continue blowing up innocent Iraqis, including a few days ago, schoolchildren, that's not an alternative that the Iraqi people desire. So the most important blow to the insurgency is that they're losing the Iraqi people.

MR. BLITZER: Republican Senator Chuck Hagel, however, tells U.S. News & World Report in the new issue, and I'll read to what he says. He says, "Things aren't getting better. They're getting worse. The White House is completely disconnected from reality. It's like they're just making it up as they go along. The reality is that we're losing in Iraq." That from a Republican Senator.

SECRETARY RICE: Well, I know Senator Hagel quite well and I know that he has been a supporter of the United States decision to finally try to create -- to help create a different kind of Iraq which can be an anchor for a different kind of Middle East.

The fact is that if you look at what is happening politically in Iraq, these people are moving toward a different kind of future than Saddam Hussein could ever have given them. They are working on a constitution -- Iraqi Shias, Iraqi Kurds, Iraqi Sunni, who finally -- really bringing the Sunni in in a way that they have not been before.

And yes, the insurgency can get on to television screens every day because it is not hard for them to pull off a suicide bombing or to use an improvised explosive device to cause mayhem and to cause carnage. But the insurgency is losing the Iraqi people because the Iraqi people have a different kind of future in mind. That's why we're getting more intelligence. That's why people continue to volunteer for the Iraqi security services.

We are not going to have to carry this -- shoulder this burden until the day that the last moment of violence is over in Iraq. Iraqis will have to do that. But we can leave them a firm foundation for a better future; and I think we can do that in a relatively quick period of time because they're getting more and more involved in their own future, both on the security and the political side, every day.

MR. BLITZER: I know we're almost out of time, but a quick question on the U.S. Naval Base at Guantanamo Bay where the detainees, the suspected terrorists, are being held. As the top U.S. diplomat, does it make any sense to consider shutting Guantanamo Bay down?

SECRETARY RICE: Well, what makes sense is to have people understand that the President has an obligation to protect the American people; and after September 11th, when we suffered a terrorist attack, we had to take these people off the battlefield, we had to get intelligence about whether there was a coming attack. A lot of changes have taken place in the entire detention system, and most especially at Guantanamo, since it was first opened shortly after September 11th. A lot of people have been released back to their homes. A lot of people have been released outright. We've made changes in the way that cases are reviewed. And in fact, Wolf, unfortunately, some of them who have been released have come back and we've met them on the battlefield again. So there is an important balance to be struck here.

But what I'd like people to know most is that Guantanamo and other places where we detain, the President has made very clear that it is the responsibility of American personnel to live up to our international obligations. We are a country that believes in international law; and while these people at Guantanamo are unlawful combatants -- that is, they're not prisoners of war -- we have treated them in accordance with the Geneva Conventions, taking into account security considerations, and we intend to continue to treat people in a way that is consistent with our obligations.

MR. BLITZER: I know you have to run, Secretary. Thanks for spending a few moments with us on Late Edition.

SECRETARY RICE: Thank you very much, Wolf.

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