MR. MCCORMACK: Good afternoon, everybody. Just want to make a brief statement at the top, add our voices here that the State Department to those you have already heard about the barbaric attack that was perpetrated by terrorists yesterday in Iraq that has resulted in what appears to be the upwards of 175 deaths and many more injured. Our thoughts and prayers go out to the families of the victims, and we wish a speedy recovery to those who have been injured. We stand with the Iraqi people and their fight against terrorism as they struggle to build a better way of life for themselves. And with that, I'd be happy to take your questions.

QUESTION: Did you have anything on the now multiple reports that the Administration is prepared to considering designating --

MR. MCCORMACK: Right.

QUESTION: -- the Iranian Revolutionary Guard Corps as a foreign terrorist organization?

MR. MCCORMACK: Right, right. Look, let me just start off the top and we can ask the -- you guys can ask questions in many different ways, and you're basically going to get the same answer. That is, we're not going to talk about anything that may be actively under consideration. We're not going to talk about any actions that we may take prospectively, with respect to the IRGC or anything else. And I think you'll understand the reasons behind this. But very often times, you run into these situations where you have a regulatory matter, and because of the nature of regulatory matters and the nature of the actions that you might take, you just don't talk about them. You don't want to give people a heads-up.

I will say, though, that we are confronting Iranian behavior across a variety of different fronts on a number of different "battlefields," if you will. We are confronting Iran's behavior in arming and providing material support to those groups that are going after our troops. We confront them on the ground in Iraq; our military is doing that. We are confronting Iran diplomatically in the international arena, with respect to their nuclear program. And we are working not only on a bilateral basis with countries, we're working multilaterally through the United Nations, and we are taking unilateral actions ourselves, with respect to their nuclear program. We also do the same thing with respect to their support for terrorist activities: work in UN fora, work bilaterally. We take unilateral actions where we can, under a number of executive orders and laws that are on the books right now.

These are extraordinarily powerful tools. But in order them to be truly effective, you have to act on the multiple fronts. We can take unilateral action, and sometimes that will result in practical effects, such as when we denied an Iranian bank the ability to do the so-called U-turn transactions in dollars. That made it more difficult for that Iranian bank that we believe was involved in activities related to Iran's support for terror and their development of nuclear weapons; made it harder for them to do business. We also worked through the UN in the last round of sanctions to designate some individuals that were part of the IRGC, the Iranian Revolutionary Guard Corps, again, making it more difficult for them to engage in the kind of activities that we believe that they are engaged in.

So we're going to continue to act on those multiple fronts. I think you understand -- I'll let you keep asking the questions -- why I'm not going to comment on the stories that have been in the newspaper today.

QUESTION: One question, and it goes to the heart of your point about how there are certain cases where you couldn't comment on something because of the nature of the regulatory action; you don't want to give people a heads-up that --

MR. MCCORMACK: Right.

QUESTION: But is it fair to draw the conclusion, from your comment, that there has been no such decision made? In other words, if you had made a decision to do X, presumably you'd be able to say, we've decided to do X because the decision was made. Is it correct to say that there has been no such decision to designate this group?

MR. MCCORMACK: Right. Refer back to what I said. We're not going to talk about internal deliberations about any actions that may be under active consideration. We're also not going to talk about any actions that we may plan to take in the future. It's just not an area that I'm going to venture into.

Charles.

QUESTION: Try another attack here.

MR. MCCORMACK: Okay.

QUESTION: Can you talk about what activities the Revolutionary Guard is engaged in that are non-military; what kind of business activities they have?

MR. MCCORMACK: Right. Well, I don't have a full description here. And maybe at some point, we can get some briefings for you with those individuals who follow this issue on a day-to-day basis. I'll see if we can do that for you; provide you with more information. This is -- you know, some have described it, and I refer to others' reports about the IRGC as a state within a state, and that they now have tentacles into all sorts of different activities, into business activities, into the banking activities. We all know about their support for those groups that are going after our troops in Iraq. We also have talked about their supplying arms to the Taliban in Afghanistan. And there have also been numerous news reports about their linkages with Hezbollah and other terrorist organizations around the world. So quite clearly, this is an entity within the Iranian Government that is engaged in a number of different activities.

Certainly, there are a lot of suspicions about their activities surrounding the Iranian nuclear program. So it's certainly a group that we watch closely inasmuch as we can. And if we can't provide you more information, Charlie, about their activities and what we know about their activities, we'll certainly try to do so. I think, as you might imagine, some of our knowledge about those activities are, you know -- relate to intelligence information that we can't get into. But I'll see what I can do in terms of getting you, guys, more information about what we know about IRGC activities, both in Iran as well as outside.

Yeah.

QUESTION: Talking a little bit more about what you were saying before about some other things that you're trying to do --

MR. MCCORMACK: Yeah.

QUESTION: -- how do you think all these actions would have a practical effect on the situation that you're facing on the ground in terms of Iranian support in Iraq, or for the Taliban or things like that?

MR. MCCORMACK: Well, the hope is that -- first of all, you make it much more difficult and raise the cost for them to engage in these kinds of activities, to the extent that they recalculate whether or not they want to engage in these activities, whether that is supporting, you know, Shiite death squads in Iraq or continuing activities related to their nuclear program to develop a nuclear weapon. So the idea here is that you try to engage and confront those activities in a number of different ways and a number of different fronts and in a number of different ways all around the world so that you raise the cost to them in their ability to carry out these activities.

And we've talked about this before, that ultimately you have somebody -- individuals within the Iranian Government who are doing a different cost benefit calculation about these activities -- whether or not you want to raise the cost to them. And hopefully you find the reasonables within Iran who say, continuing in this -- in these kinds of activities is not worth it. Whatever benefit we may have calculated, we're going to receive from that the cost that we are now accruing far outweigh, or at least outweigh, the benefits that we perceive we might be accruing from those activities.

QUESTION: What are you referring to when you talk about that?

MR. MCCORMACK: Well, Elise talked about a number of different activities, whether that was in Iraq or Afghanistan or in the nuclear program.

QUESTION: What is it that raises the cost to them?

MR. MCCORMACK: Well, if you look at -- it's what I was referring to in answer to Arshad's initial question. And you're working on the unilateral front, where we've already taken a number of different steps. The Treasury Department has made it more difficult for some Iranian financial institutions to access the international financial system. We have -- we're talking --

QUESTION: In other words, so you're talking about the broader --

MR. MCCORMACK: The broader --

QUESTION: So you're not talking about anything specific. You're talking about the --

MR. MCCORMACK: No, I'm talking about the broader strategy here. That's right.

QUESTION: But this broader strategy of the financial targeting all of these entities within Iran includes, if I'm correct, that you're trying to stop the activities of the IRGC, whether you have or will or intend to take any specific action against them, your wider plan to target Iran financially is in the hope of stopping some of these activities --

MR. MCCORMACK: We don't find it -- we have, in the past, sought to target the activities of those individuals, those entities that we believed -- based on what we believe to be solid evidence they're engaged in those kinds of activities -- whether they're on the nuclear front, WMD front or the terrorism front. The IRGC is well known to be engaged in some of these kinds of activities.

I point to the UN Security -- the most recent UN Security Council resolution dealing with the nuclear issue as an example, in which the international community had said that these -- at the very least, these individuals from the IRGC are engaged in activities that are not in the interest of the international community, in terms of stopping the spread of nuclear weapons, and that we are going to take a stand, in that regard, to try to hinder their ability to engage in those kinds of activities.

QUESTION: But, I mean, just one more on this. I mean, and without -- I understand you don't want to talk about any specific action that you'd take, but --

MR. MCCORMACK: Right.

QUESTION: -- you've talked about your campaign for unilateral action to turn up the heat on Iran.

MR. MCCORMACK: Right.

QUESTION: And you've said that in lieu of any further UN sanctions, if they don't be passed, you'll be forced to take additional measures. So what you're saying is, I mean, this is a campaign about the U.S. that is open-ended. I mean, you're not done with --

MR. MCCORMACK: Well --

QUESTION: You haven't considered your task done, is what I'm saying.

MR. MCCORMACK: Right. Well, the interesting thing about this is that you said, the U.S. campaign. It's -- we have gone from a point from where started two years ago, where this was --

QUESTION: No, I'm talking about the unilateral aspect.

MR. MCCORMACK: I know, I know, I know. But I want to make a point here that, you know, in the absence of working together with international partners, whether that's in multilateral fora of the UN Security Council or bilaterally with other states, unilateral actions by the United States are not going to have the desired cumulative effect that everybody is looking for, in terms of Iran not engaging in harmful behaviors around the world.

The strategy has been to act on a number of different fronts, unilaterally, where we can, and based on what we believe is solid information, using powerful tools that the Congress, as well as the President, have at their disposal to try to make it more difficult, raise the cost, and hopefully prevent negative behaviors by Iran.

But that, in isolation, is not going to have the desired effect. And we know that. And we are going to continue to work on a bilateral basis, as well as a multilateral basis, to try to raise the cost to the Iranian Government for these kinds of behaviors.

QUESTION: Sean?

MR. MCCORMACK: Yeah.

QUESTION: This is not a situation here today that we saw last week and earlier this week where a designation was signed off on one day, but it wasn't announced for several, you know, few more days, is it?

MR. MCCORMACK: Maybe the --

QUESTION: With the Lebanese group --

MR. MCCORMACK: Matt, I can't -- I just can't go beyond the answer that I've given to a similar question earlier in the briefing. And that is, we're not going to comment. We're not going to comment on anything --

QUESTION: Yeah, but I guess what I'm trying to say is that is it not -- these types of designations are not secret, are they? I mean, they can't be. If something is to be designated something, it's not a secret, is it? I mean, it has -- it's got --

MR. MCCORMACK: Matt, hey, I honestly can't tell you, in terms of the paperwork, whether or not something is classified or not. But things having to do -- things involving the Department of Treasury and regulatory actions on their part, I can't tell you whether or not it's formally classified, secret, or confidential, or not. But there is -- there are a separate set of concerns that go along with those kinds of actions.

QUESTION: Okay. And just one more thing: Why wouldn't the elements of the Iranian Government, that you believe are engaged in malfeasance, what is it -- why wouldn't they be covered already under the state-sponsored designation?

MR. MCCORMACK: Technical question. I just -- I can't answer for you, Matt.

QUESTION: Isn't the damage already done, with regard to giving a heads-up, by the fact that there are these two newspaper reports that you're considering this? I mean, if you're worried about giving them a heads-up, believe me, they read the Times and the Post, and they have had it.

MR. MCCORMACK: Arshad, I can't tell you.

QUESTION: And then secondly, is there any reason to believe that they -- that the Revolutionary Guards would have any bank accounts, either in the United States or with other U.S. persons, that would, you know, be captured by such a designation? I mean, why, you know --

MR. MCCORMACK: Arshad, I can't tell you whether or not they have any assets, bank accounts, or anything else, or any other business dealings with U.S. entities. I just don't have that information.

QUESTION: Sean, can you bring us up to date on UN talks about a third resolution? It's been since May since the Iranians failed to meet the last 60-day deadline. Are you frustrated by the pace? Do you expect anything anytime soon from the UN?

MR. MCCORMACK: Well, it's been a matter of consistent conversation, both at the level of -- well, all the way up, all the way up to the very top. I think you heard from President Bush who was talking to President Sarkozy about Iran. And as part of that, he talked about what are the next steps in the Security Council. I know Secretary Rice is engaged in conversations over the past several months with her counterparts about this, in addition to other matters. And Nick Burns has also occupied himself with the matter when he talks to his P-5+1 colleagues.

So it's been a matter of consistent conversation. Is it safe to say that we would have hoped to have been -- to have been able to have moved more quickly on this? Yeah, absolutely. Are some of our partners within the P-5+1 not moving as quickly as we would have liked? Yeah, absolutely. But that doesn't mean that we don't keep pushing on this and it doesn't mean that our thought that we are going to ultimately get another resolution with sanctions, with real sanctions, is not going to come to pass. We believe that it will.

QUESTION: Do you still think that that is a valuable tool, the UN sanctions?

MR. MCCORMACK: Absolutely, absolutely. Yeah, because again this is -- you have to look at the cumulative effect here. And all of these things -- Chapter 7 resolutions are very real. They have the force of international law. And more and more, you have seen a cloud gathering over Iran and its dealings with the international financial community and the international business community.

Now, one of the real -- the very real effects on Iran is that you have seen major international financial institutions, say, either (a) we're not going to do business with Iran anymore because of the reputational risk or the uncertainty surrounding their dealings with Iran, or we're going to cut back. You've also seen individual states take actions. For example, Germany, they're going to cut -- they have cut back on their export credits to Iran.

So there are very real secondary costs that come along with these actions. Not only do you have the real costs associated with the actions of the Security Council or individual member-states, for example, designating an individual and not allowing them to engage in the kinds of business dealings or financial activities that they've previously been engaged in, but that also adds -- when you start adding all of these things up, it adds to the cloud that has gathered over Iran. And that has very real costs to the Iranian Government.

And I get back to the -- one of the original points I was making earlier on in the briefing and that is: The hope is that you find enough reasonable people within the Iranian Government who say it's just not worth it to engage in these behaviors anymore, especially when there is something attractive on the other side on the nuclear front. We haven't talked about it for some time. But there is still an attractive offer on the table for the Iranian Government. They can have peaceful nuclear energy in such a way that the international community has objective guarantees that they are not going to use that technology and those materials to build a nuclear weapon. So they can have that. They can have what they ostensibly say that they want to have: a peaceful nuclear energy program for the Iranian people. So it's not that -- just that there are penalties and costs out there to them, there are very real opportunities for them on the other side, if they would only make a different set of decisions.

Well, that seems to have generated quite a bit -- yes, but?

QUESTION: Well, no, I'm just wondering. I want to go back to this specific thing that you don't want to talk about today and that is, with all due respect to the Times and the Post, you've been asked about this several times in gaggles since mid -- the middle of last month, when I think the first pretty substantial report about this being considered was in The New York Sun. It was July 13th. That story said that there was consideration of a new executive order that would -- can you say if thinking on this idea has evolved since mid-July?

MR. MCCORMACK: On what issue?

QUESTION: On the issue of --

MR. MCCORMACK: On a new executive order?

QUESTION: On -- yes, on a new executive order.

MR. MCCORMACK: I'm not aware of any discussion of a new executive order.

Yeah.

QUESTION: Ahmadi-Nejad has been in Bishkek today for a meeting of the Shanghai Cooperation Organization. This is a group that Russia and China reportedly see as being an instrument to counter U.S. influence in Central Asia. Does the U.S. have any objection to Ahmadi-Nejad being invited to this group?

MR. MCCORMACK: If they want to associate with them, that's up to them. I guess we would obviously make a different decision if we were involved with the group or not. And they're going to have to make their own decisions about with whom they associate.

Yeah.

QUESTION: Sean, while you listed the so-called negative activities of Iran across the -- do you still think that it's still beneficial for the United States to continue holding direct talks with Iran solely on the Iraqi situation?

MR. MCCORMACK: Well, we have in the past. We've had -- we had that channel of communication; it is still open. We don't at this point have any other meetings scheduled for that, but it has -- at least, those two meetings we thought it would be useful to directly communicate to the Iraqi -- to the Iranian Government about our concerns that their activities are, in fact, having the opposite effect of what they say they want. They say they want strategic stability in Iraq. Their activities are not having that effect. And in fact, their activities undermine that goal. So we thought that having those discussions not only at the ambassadorial level, but at the sub-ambassadorial level, were useful to have. At this point, we don't have any other meetings scheduled and we'll let you know if we do.

QUESTION: But against the backdrop of what they said of the Iranian activities, you still believe that this dialogue can be beneficial?

MR. MCCORMACK: I think -- what our hope is that Iran will match its actions with its words and that it will change its behavior. Just because you, you know, just because you are confronting Iran, in terms of these negative behaviors, does not mean you cannot have those channels of communication open. You can hold those two thoughts simultaneously in your head.

QUESTION: Sean?

MR. MCCORMACK: Yeah.

QUESTION: As these reports trickle out, while I know you can't discuss them, is there an effort underway to sort of build pressure on Iran before the international community gets together in New York in September at the UN meetings? Are you trying to make a greater push at that point? Is there going to be a new effort underway to isolate Iran?

MR. MCCORMACK: I think it's -- you know, anytime you have those large international gatherings and especially the UN General Assembly, it's a natural point at which there's a lot of discussion about front-burner issues in the international system. And certainly Iran's behavior across a variety of fronts, I'm sure there's going to be one of those. Is it specifically timed to that? Not really. Like I said, would we have hoped to have had a new Security Council resolution by this time? Yes. So, you know, it's not -- those activities aren't necessarily timed towards the General Assembly. But I think that's a natural point at which you're going to have a lot of discussion about Iran, as well as a variety of other issues.

Yes.

QUESTION: You mentioned before some figures within Iran and the business community who may be able to put pressure on the regime to say, hey, this isn't worth it. Who -- is there anyone in particular, any group in particular, that is particularly involved with the Revolutionary Guard, for example?

MR. MCCORMACK: You know, I don't have any specific names or specific groups for you. But you know, one thing that we do know and that's -- and it's certainly been -- it's certainly widely reported in the press is that the Iranian leadership is not monolithic. There are a variety of different individuals, groups, factions with different opinions about what policies the Iranian Government should pursue. You've seen some of these -- some of this debate erupt in public over the past year or so. But thus, far, despite what we suspect is an internal discussion or even debate, you haven't seen a change in behavior.

Yeah.

QUESTION: Can I change topic?

MR. MCCORMACK: Anything else on this?

QUESTION: I have.

MR. MCCORMACK: Yeah, go ahead.

QUESTION: Are you thinking to inform more and more Iranian people regarding your unilateral and multilateral decision about the Iranian regime?

MR. MCCORMACK: About what decision?

QUESTION: Unilateral and multilateral decision that you have as example in a different area regarding the atomic activities and the terrorist activities and right now that -- you mention that this is something internal deliberation, but anyway will be directed to the --

MR. MCCORMACK: Well, we are pretty consistent. We have consistent activity to try to reach out and inform the Iranian people about what is going on in the international system and the effect of some of the decisions their government is having on Iran's standing within that system, as well as the effect of some of those decisions within Iran itself. That's hard. It's hard because the Iranian Government at every step attempts to thwart the inflow of information that's not controlled by the state. There are outlets that do operate in Iran. The ability of the Iranian people to get a different view than that being put out by the state is somewhat limited, but nonetheless, it is there. And we do try to work through -- excuse me -- do try to work through a variety of different channels to provide a different perspective to the Iranian people so that they can be fully informed. That's hard to do.

Yeah. Anything else on Iran? Okay. You first, then you.

QUESTION: Abdullah Gul's announcement earlier this week, that he's going to renew his -- that he's renewing his bid for the presidency in Turkey, was followed by the head of the army saying that the next president would have to adhere to democratic principles in Turkey. How concerned are you that the head of the army is making pronouncements on the workings of a democratically elected government in Turkey?

MR. MCCORMACK: Well, first of all, any decision about who's going to be the next President of Turkey is going to be one for the Turkish Parliament and the Turkish people to make. And we have confidence in Turkey's democracy. We have confidence in Turkey's secular democracy. And there are going to a variety of -- there are going to be a variety of different points of view within Turkey. That is the nature of democracy. But any of these questions need to resolved within the confines of Turkey's law and Turkey's constitution. And we have full confidence that the Turkish system will come to terms with whatever differences there are within that system to produce a result that is democratic, that is consistent with Turkey's history, and consistent with Turkey's laws and constitution.

QUESTION: How concerned are you that there are fears in Turkey that their whole step may lead to another showdown with the secularists, thus undermining the stability of the political system in Turkey?

MR. MCCORMACK: You can talk to political scientists who are better versed in Turkish domestic politics than me. But look, what you are seeing, as far as we can see, is a debate about Turkey's future course; a debate about Turkish politics and how Turkey's values manifest itself within a political system. That is the functioning of a democracy, as it -- I think anybody would recognize it's a debate that we would have here in the United States or in Western Europe or elsewhere. But ultimately, the Turkish people are going to have to wrestle with these questions and figure out how to deal with them within the confines of their political system.

QUESTION: And just one more, if I may --

MR. MCCORMACK: Sure.

QUESTION: -- on a slightly different topic. There are reports that the U.S. Government has asked the Sudanese Government for guarantees that if the Al-Jazeera reporter held in Guantanamo, Sami al-Hajj, were to be sent back to Sudan, the government in Khartoum would not allow him to leave Sudan.

MR. MCCORMACK: Right. I saw the news reports. Let me look into them. I'll try to get you an answer. I, at this point, don't have information on that report.

Yes, sir.

QUESTION: Mr. Bryza told a Greek newspaper that if the Turkish Parliament says for Mr. Gul to be the next president, it will bring a lot of troubles and tension. Do you have any comment on that?

MR. MCCORMACK: I haven't seen -- was this Matt Bryza?

QUESTION: Yes.

MR. MCCORMACK: Yeah, I haven't seen Matt's comments. I'll -- let me take a look. I'll talk to him to see if there's anything said that was any different than he might otherwise have said.

QUESTION: Did you miss that "I love Abdullah Gul" headline? (Laughter.)

QUESTION: Yeah. (Laughter.)

MR. MCCORMACK: Right. (Laughter.) I did. I did. I missed it.

QUESTION: You missed it?

MR. MCCORMACK: I missed it. Where's Lambros? Did he write that? (Laughter.)

QUESTION: Couple of quick things.

MR. MCCORMACK: Yeah.

QUESTION: We have a report out of Khartoum quoting the brother of a man who's being held in Guantanamo Bay. This is the detained Al Jazeera camera man, Sami al-Hajj, as saying that the United States has asked Sudan for guarantees that the imprisoned man would not leave Sudan if he's released from Guantanamo Bay. Do you have any comment on that? Are you seeking that assurance from the Sudanese before releasing him?

MR. MCCORMACK: Let me look into it. I don't have the information here. So we'll get you, guys, an answer.

QUESTION: There's one other one that may fall into that category. There's a Russian court case. A Russian court found that the head of a website called Allofmp3, which sells music online, was not guilty of breaching copyright. This has been a big issue in U.S.-Russian negotiations on Russian WTO accession. And I doubt you have something prepared, but if you could get a comment on whether the United States is disappointed by this verdict --

MR. MCCORMACK: Sure. Yeah, we'll take a look at it.

QUESTION: Thanks.

MR. MCCORMACK: Mr. Gollust?

QUESTION: I just want to --

MR. MCCORMACK: A late-breaker?

QUESTION: Yes. Hugo Chavez is announcing constitutional reforms for -- that would eliminate, from other things, eliminate term limits for the President of Venezuela. Is that something you would like to take on?

MR. MCCORMACK: At this point, Dave, I would say only that we have seen the press reports. And I think that they talk about his prospectively taking this action. Look, until -- unless and until he takes an action, I'm not going to have much to say about it other than to note that there has been a -- I think if you look at the trajectory of Hugo Chavez governing democratically in Venezuela, you'll see that's a downward trajectory. He's taken a number of different steps that have been well documented over the years that have really eroded some of the underpinnings of democracy in Venezuela. And that's certainly been something that many throughout the hemisphere have found very disappointing. But in terms of this particular action, I think we'll hold off until we see that he has taken some action.

Okay.

QUESTION: I don't know that you would necessarily have a comment on this, but aides to Palestinian President Abbas are quoted as saying that they are considering or he is considering ways to hold new elections that would limit the participation of Hamas. I'm well aware of the U.S. Government's views on Hamas and the position to (inaudible) them and so on. But as a matter of general principle, does the U.S. Government believe it's a good idea for another government, in this case, Abbas's, to look at holding elections, but finding ways to exclude certain parties from participating or limiting their participation?

MR. MCCORMACK: Let me look into the details of this. I want to understand exactly what these guys are saying before I offer any particular comment, even a general comment.

QUESTION: Do you have any update on Richard's travels, meetings --

MR. MCCORMACK: He's in Pakistan at the moment. I know that that's been reported. I think he's had a meeting with President Musharraf, or at least he will have a meeting with President Musharraf, as well as others, throughout the -- and the Foreign Minister and perhaps the Prime Minister as well.

QUESTION: Just one related to that. The Pakistani Foreign Ministry put out a statement today, very critical of a couple of things, notably the legislation passed, tying progress in the war on terrorism, to aid to Pakistan. And our report had no comment from the embassy or from Assistant Secretary Boucher. And it seems only fair to ask you, guys, if you want to say something about it.

MR. MCCORMACK: Look, I would say only very generally that we believe that Pakistan is a good ally in the war on terror. And in terms of the Hill and any restrictions that they may have placed on aid to Pakistan, you know, of course, we're going to work with the Hill on what it is -- in terms of their point of view. But of course, the President is the ultimate authority on how to conduct American foreign policy.

QUESTION: Thank you.

(The briefing was concluded at 1:08 p.m.)

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