MR. MCCORMACK: Good afternoon, everybody. No opening statements, so we can get right to your questions. Who wants to start?

QUESTION: Have you heard anything from the Chinese about the test?

MR. MCCORMACK: We talked to them about it. Chris Hill, when he was in Beijing, talked to them about it. He talked to a representative of the Chinese ministry. The bottom line is we encourage them to be more forthcoming and transparent with respect to not only this test but also their space programs. It has been a continuing topic for us as well as others in the region to encourage the Chinese to become more transparent in terms of their military spending and their military programs. I think the -- Chris's interlocutor didn't really have anything new to say beyond what you've seen from the Chinese ministry statements talking about this was not meant as a threat against anybody and it's not meant to spark a race to militarize space. But the bottom line, George, is we would encourage greater transparency as to exactly the specifics of this test, the intent behind it, and then also more largely more transparency about their program.

QUESTION: Bob Joseph said last Friday that this was a wakeup call and that the U.S. is going to take steps to defend its assets in space. Can you elaborate on what that would entail?

MR. MCCORMACK: I wouldn't get into that, Kirit. I think that probably the folks that are more qualified to talk about that would be over at the Department of Defense. They have a significant role in managing those assets, getting them up into space, and then any questions about defending them as well I think would probably best be put to them.

QUESTION: The officials that Chris met with, I mean, they did acknowledge the test? Because previously the foreign ministry had been pretty --

MR. MCCORMACK: Yes, yeah, they did.

Yes, sir.

QUESTION: (Inaudible) said the Chinese were diplomatically unprepared to deal with the aftermath of this test. Do you get that impression at all?

MR. MCCORMACK: I can't -- I'm not really in a position to judge. That really gets into the internal workings of the Chinese Government and I really wouldn't be in a position to tell you who was informed when or, you know, how far in advance or what information they were giving -- what information they were given. They haven't been very forthcoming, I think is the assessment, a fair assessment to date. Whether or not they were informed beforehand, I can't tell you.

QUESTION: Would you say though that the Chinese have been able to answer the questions that Bob Joseph has put to them when he met with them last week?

MR. MCCORMACK: I can't say. I haven't talked to Bob so I don't know what questions he put to them.

QUESTION: Sean, what do you mean when you say greater transparency in, you know, their future military actions? I mean, is that just between our governments?

MR. MCCORMACK: No, we've talked quite a bit -- if -- quite a bit about this whole idea of transparency in their spending plans, their budget, their military programs, what their policy and doctrines are. This has been a topic that we have encouraged them to make progress on for some time. We have made some progress, I think basic progress, in terms of military exchanges. We -- actually, between the Department of Defense and the Chinese military there is a joint exercise. You'd have to talk to DOD. It's something like a search-and-rescue mission kind of exercise. So there have been some baby steps in that regard in terms of greater openness, but they have a ways to go, generally speaking, about the spending on their military programs, their policies and doctrines, getting a better understanding of what their policies and doctrines are as well as the programs that they have that are financed by their budget. So we want to have a better understanding of that. I think states in the region have also talked to them about that. It's just normal dialogue with them.

Specifically in terms of this, the same would apply. We would be -- we're looking for, again, a greater understanding of exactly what their intent was, what the specifics were surrounding this test, as well as any programs they may have to conduct future such tests or any details of the programs of which this was a part. And this is -- all of this is designed, really, to avoid any sort of misunderstandings not only with the United States, but other countries around the world.

It is -- for countries that have good relations, and I would say we have good relations with China, it is important that there be a set of rational expectations that are generated based on publicly available information and information that is exchanged via diplomatic channels, just so you -- again, so you don't -- so you avoid misunderstandings, misperceptions down the road. This is an area, however, where we would continue to urge the Chinese to work on, because more progress needs to be made.

Okay, yes.

QUESTION: On Iraq?

MR. MCCORMACK: Sure.

QUESTION: Concerning specifically al-Maliki and al-Sadr, he -- al-Maliki has pledged to rein in al-Sadr's militia. I mean, do you sincerely believe that he's going to do his utmost to do this?

MR. MCCORMACK: (Inaudible)?

QUESTION: Yes.

MR. MCCORMACK: We take him at his word. He has said -- he understands and -- he understands that they need to get a handle on these groups, organizations, militias that are out -- operating outside the law. He understands you simply can't have that in any functioning democratic society. It just can't happen. You can't have armed groups operating outside the law. The people need to feel as though that the state and the government is providing for their security. It's one of the basic tenants of any functioning democratic society.

And he himself has said he's going to do this. Came out, he put his name behind it, he said, "I'm going to do this," so we take him at his word. And we will see if the actions follow through those words.

QUESTION: Well, any reactions to al-Sadr's ending of his parliamentary boycott?

MR. MCCORMACK: Well, you know, he was -- how they sort out their political differences in the Iraqi political system are up to them. Certainly, the kinds of steps when you boycott the parliament, effectively not allowing it to function in the way that it was allowed to function, is really a break with the faith of the people who put you there. Maybe not his specific voters, but the people of Iraq who invested in Iraqi democracy. They expect results, they expect their parliament to work, they expect their parliamentarians to show up for work and to act on their behalf. So it's a step back in the right direction, but you have to go back to the original question of why they did it in the first place.

Yeah, David.

QUESTION: On Iran. Iran's apparently asked -- blocked 38 IAEA inspectors and the IAEA says that they're still confident, even if they couldn't send those 38, that they'd have enough people to monitor what they need to monitor. Do you have a response to that?

MR. MCCORMACK: Well, we're still looking -- David, we're still looking into the details of this report. But you know, even if the IAEA makes the decision that there somehow is a workaround here where they can send other individuals to perform the functions that these individuals were supposed to perform -- and I -- again, I can't confirm the specifics of this story. I refer you back to the two parties in question, the Iranians or the IAEA -- it's another indication that Iran continues in its defiant attitude towards the international community.

They just don't get it. The international community has put them under Chapter 7 sanctions. Yet, here you have another example of the Iranians trying to dictate the terms to the international community -- in this case, the IAEA. And it just -- it -- I don't know who's providing them the leadership their advice, but it doesn't do their reputation in the international system any good and this kind of defiant behavior only adds to that.

They are in a very exclusive club right now. This state under Chapter 7 -- Chapter 7 sanction -- the EU just today made it very clear in public that they were going to fully implement Resolution 1737. The fact that Iran now finds it much more difficult to access the international financial system in the ways that it had in the past in order to facilitate the developments in its weapons of mass destruction programs is again another message to the Iranian people that they find themselves more and more isolated. That's not what we want. It's not our first choice. We've given this regime a different pathway and that pathway certainly is available to them, but they have chosen not to pursue it.

So once again another indication that this regime clearly doesn't get it. They will find -- they continue in this kind of behavior they will find themselves only more and more isolated from the rest of the world. And Iran is -- the Iranian Government is not the kind of government that can function in total isolation from the rest of the world. That's just -- they rely upon the exports of oil. They rely upon the international financial system in order to function. And I'm not saying that we are in any way contemplating or in fact now focusing our efforts on their oil sector. It's just to point out that they -- this is a country that does have a fair degree of integration with the rest of the world. That integration however is dependant on a two-way conversation and there are two sides to it. There's the Iranian side, there's the international community. And in this case, the international community is saying that we are not going to allow business as usual because you are exploiting those international institutions, in this case not a formal institution, but the international financial community, in ways in which we do not agree and there are consequences to that action. So again, the bottom line is, you know, yet another step that really signifies that they're going to find themselves more isolated.

QUESTION: Sean, two separate things here. One is ISNA, the Iranian state news agency, that reported this described it as a first step in curbing their dealings with the IAEA. Do you believe that this presages a further effort to limit the IAEA's operations in Iran?

MR. MCCORMACK: I would hope not. I would hope not. Again, we're working to understand exactly the details here and I would hope that they are not trying to dictate to the IAEA who should be on inspection teams and monitoring teams. I would hope that's not the case because certainly that raises some real questions again about their intent with respect to allowing these monitors in.

Now, I can't speak to what future cooperation they may have with the IAEA or exactly what their intents are. If they do -- I have seen the reports -- they do continue to make various sorts of other threats, but if they don't understand already that that sort of behavior further -- only serves to further isolate them, I guess that they will again have to see that that kind of defiance of the will of the international community will again only be met by their continuing to be isolated more and more from the international community which is not what the Iranian people want.

I would -- just one other point, when I say that we do not want to be isolated necessarily from the Iranian people, we follow through on that. Our -- we had a wrestling team that participated in a tournament in Iran very recently. They've come back. They actually -- they met with -- they had a very warm reception from the Iranian people and I think that's really instructive. Even though this is a regime that spews all sorts of invective about the United States and the others who are seeking to curb their drive for a nuclear weapon, the Iranian people actually desire that sort of contact with the outside world. They desire contact with the American people. We certainly will do what we can to facilitate that but a big obstacle in the way of further developing that is the behavior of this regime and the Iranian people should understand that.

QUESTION: Sean, the second is you raise the issue of Iran's, you know, oil exports. Oil is one of the most precious and scarce commodities in the world and one without which this country doesn't -- you know, can't really function. And why shouldn't one regard the threat or the possibility of somehow the United States not, you know, wanting Iranian oil or other states not -- I mean, why shouldn't one regard that as sort of an empty threat? People need oil. It's a very fungible market. You know, why is -- why do you raise that? It's not as if we're not going to stop needing oil or the rest of the world is going to stop needing oil.

MR. MCCORMACK: Well, I was only pointing out the fact -- and it's an easy example -- for how Iran is integrated in the rest of the world. You could juxtapose it, for example, with North Korea which is quite isolated from the rest of the world. But even in that kind of self-imposed isolation they still do need contacts with the outside world in order to continue to function. It was -- I was just pointing out, using as an example, to show that, yes, the Iranian people -- Iran desires interaction with the outside world. Another example, there are lots of airline flights in and out of Iran. That's another example.

Again, none of this is intended to foreshadow or indicate any particular action on our part. I'm just trying to use them as examples to show that there is that interaction and desire for interaction.

QUESTION: You could regard oil as their ace in the hole, given the world's dependence on oil. In other words, they can do what they want and they know that people will keep dealing with them because people need the oil.

MR. MCCORMACK: Well, again, that gets to the decisions of individual corporations and companies around the world. And they will have to make their own decisions based on their own investment risk assessments, their reputational risk assessments. They will -- businesses will have to make their own decisions. Of course we do from time to time talk to states who have perhaps some influence, some role, some stake in oil corporations about -- questioning, well, is now really the right time to be investing in the Iranian oil sector. We did that, for example, with the Chinese. You heard the Secretary talk about that a little bit.

But again, those are decisions for individual corporations to make. But there are very real factors that are on the table now in terms of investing in Iran, not because of anything in particular that we have done. But it really -- because of the Iranian regime's actions, which has in turn gotten a response from the international community.

So you know, again, when you're talking about and you're sitting there in the corporate offices thinking about making multi-billion dollar bets that return investments over a couple of decades, you have to consider these sorts of things. They're very real factors.

Yeah.

QUESTION: But you've said previously that the U.S. has no plans to target Iran's oil industry with sanctions. That still remains? I mean, that's no something that you're --

MR. MCCORMACK: That's true.

QUESTION: -- contemplating at the moment?

MR. MCCORMACK: You know, that said, we do still have on the books our own national laws, the Iran-Libya Sanctions Act. I think they've dropped -- intend to or are going to drop the Libya from that, which does speak to investment in the Iranian oil sector, the oil and gas sector. But that's the only thing that's on the books and, as we said, we don't at this point have any intention to proposing sanctions that are targeting their oil and gas sector.

QUESTION: But are you speaking on a regular basis with U.S. companies considering investing in --

MR. MCCORMACK: I think U.S. companies under the law are not allowed to invest in their oil and gas sector.

Samir.

QUESTION: The Foreign Minister of Qatar visited Iran on Sunday and assured the Iranians that any threat against Iran will be a threat against Qatar and the region. Isn't Qatar a member of the alliance of the GCC+2?

MR. MCCORMACK: Gulf Cooperation Council, yeah.

QUESTION: That the Secretary met with in Kuwait?

MR. MCCORMACK: Mm-hmm, right. And they issued a statement for all to read.

QUESTION: I mean, what's -- I mean, do you have a reaction on his visit?

MR. MCCORMACK: No. But look, the Gulf states and other states are going to have relations Iran. We would only encourage them to be good, neighborly, transparent relations that have -- that are based on mutual respect.

Charlie, did you have anything?

QUESTION: No, not -- if no one else has, I was going to do my Greek chorus thing. But no.

MR. MCCORMACK: Okay. David.

QUESTION: Is that a message that you heard during this recent trip that they and that the countries of that region did not want to see a military action against Iraq -- Iran? Pardon me.

MR. MCCORMACK: Well, again, it wasn't anything that was being contemplated. You heard from the Secretary that while the United States and the President never take any options off the table, we are seeking to address our differences with Iran on the nuclear issue through diplomatic means. Within Iraq we are also -- we are going to confront any of those networks or individuals who are financing or involved in attempts to harm our troops. And in terms of fighting terrorism, it's well known what our stance is. We are going to take any steps that we believe are prudent in order to protect the people of the United States.

QUESTION: Just a follow-up.

MR. MCCORMACK: Yeah.

QUESTION: You said that wasn't something the U.S. was considering, but was it something that you heard during the trip from the other members of the GCC?

MR. MCCORMACK: You know, I'll tell you, frankly, in the meetings that I was sitting in, I didn't hear it.

QUESTION: Cyprus. Do you have any reaction on today's EU ministerial's decision about (inaudible)?

MR. MCCORMACK: Let me look into it for you.

Yes.

QUESTION: Different topic. Your counterpart in South Africa says that they're having discussions with the State Department about two South African nationals who are alleged to have links in U.S. eyes with al-Qaida. Can you elaborate on the status of those discussions and what designation, if any, the U.S. wants to see applied to those individuals?

MR. MCCORMACK: Right. In terms of designations of individuals either under U.S. executive orders or under UN resolutions, those are things that are announced in public once the designations have been made. In advance of any such designations, we don't discuss any deliberations or any information that we may be considering that might lead to a designation.

QUESTION: Just to clarify, since no public declaration has been made, should we take it that no designation has formally been made then?

MR. MCCORMACK: There's under normal circumstances a public declaration that is made once somebody has been designated under UN -- under U.S. executive orders. And then under -- I don't know what the procedure is for designation under UN Security Council resolutions.

QUESTION: So the press reports that they have been designated, in the past tense, are incorrect at this point?

MR. MCCORMACK: I would just refer you back to my previous two answers.

Yes, ma'am.

QUESTION: On North Korea. Have you seen reports that U.S. is considering unfreezing several accounts at BDA?

MR. MCCORMACK: I haven't seen those reports. I haven't seen those reports.

QUESTION: There's actually another report -- I think it's from Russia -- that the BDA talks could happen on the 24th.

MR. MCCORMACK: I saw that particular report. I checked into it and checked with Department of Treasury. There's been no date or venue agreed upon as of yet.

QUESTION: I'd like to ask you for a comment on Mr. Chavez's latest remarks about the U.S.

MR. MCCORMACK: Oh yes. Look, if I spend all my time responding to these various sort of outrageous remarks, then I'd be up here for hours on end. At the end of the day, these kind of remarks don't do Venezuela or President Chavez any favors. They certainly don't enhance his reputation or Venezuela's reputation around the world. He is the elected representative of Venezuela. He has decided upon, apparently, a course of action that would lead to the nationalization of various industries in Venezuela. That's a pathway that has led to economic dislocation and disadvantage for a number of countries in the path -- in the past. But again, if that's the pathway that he wants to proceed down, then he is the elected representative.

We are ready to have a positive relationship with the Government of Venezuela and work with them on issues of mutual interest and concern. So that's where we stand.

QUESTION: What about his remarks about Secretary Rice, rather derogatory?

MR. MCCORMACK: Again, like I said, he has said such things about Secretary Rice, President Bush, a whole collection of other U.S. Government officials. At the end of the day, none of it has done him or Venezuela any good. And as a matter of fact, I would argue that it's actually hurt Venezuela in the international system.

QUESTION: How so?

MR. MCCORMACK: I'll give you one example. Although I can't tell you the motivations for everybody who voted in the General Assembly for who would take the GRULAC seat for the UN Security Council, I would put it to you that there were a lot of states that reconsidered how they were going to vote after President Chavez made the remarks about President Bush at the UN General Assembly. That was one example where it certainly has, I think, hurt in a material way Venezuela's standing within the international system.

George.

QUESTION: There's a report that the Southern Sudanese Government wants the Blackwater company in North Carolina to start training Southern Sudanese. Do you have anything on that?

MR. MCCORMACK: We'll look into it for you, George.

QUESTION: Thanks.

MR. MCCORMACK: Sure.

Samir.

QUESTION: What's your reaction to Abbas visit to Syria and this meeting with --

MR. MCCORMACK: Whose?

QUESTION: President Abbas. The -- of the Palestinian Authority.

MR. MCCORMACK: Right. He's --

QUESTION: (Inaudible.)

MR. MCCORMACK: He is, in the context of trying to sort out the various contradictions within the Palestinian political system, talking to Hamas again about forming a national unity government. I'm not sure that, at least reading the press reports, much has come out of this particular meeting. Again, it's up to the Palestinians to sort out for themselves and among themselves exactly what kind of configuration they are going to have in their government.

What we have said is that the platform of that government has to meet the Quartet principles that have been outlined. And not only that, but their actions have to follow those principles.

QUESTION: Some press reports said that the U.S. discouraged him from going to Damascus.

MR. MCCORMACK: It is his decision whether or not he was -- he wanted to go to Damascus or not.

QUESTION: Thanks.

MR. MCCORMACK: Yeah.

QUESTION: Can you tell us what Secretary Rice hopes to accomplish at the Lebanon donors conference and can you give us any sense of how much of a contribution the United States hopes to make?

MR. MCCORMACK: I'll leave that for -- on the last part, I'll leave that for Secretary Rice to talk about. It will be substantial, but that is not really the -- shouldn't be, really, the sole measure of this kind of conference. You are going to have high-level representation at this conference and a number of countries represented at the ministerial level. President Chirac himself has taken a personal interest in this conference, so I think more than anything else, what it does is it demonstrates the support of the international system for this democratically elected government and also, the international system's support for the Lebanese people.

Now there are going to be -- you know, the opposition is going to do everything it can to detract from that message. We've heard -- I've seen the press reports and we've seen the reporting about various strikes and demonstrations that are planned coincidentally to begin tomorrow, I believe. And also -- you know, also coming out with just extravagant reports of exactly what will be pledged at this conference far beyond anything that anybody would -- might rationally expect. This is just a -- it's a tactic that they are using to -- trying to distract people from the fact that they themselves have not met, really, any of the promises that they have made to "rebuild" the south of Lebanon.

So what Secretary Rice is going to be doing is, when she goes there, both in her words and through our actions, demonstrate support for this democratically elected government as well as demonstrate the support of the American people for the Lebanese people in very real ways. One important thing, one important initiative that we have started is really to encourage public-private partnerships. And while the political support from the foreign government, as well as the direct assistance from the foreign government, are very important things especially in this case, over the medium to long term, what the Lebanese people and Lebanese -- the Lebanese economy really needs is that sort of integration with the rest of the international economy and direct investment in Lebanon and the Lebanese people from foreign corporations.

In this case, you're going to see some of that from U.S. corporations and that's critically important for Lebanon and for the Lebanese people, and their economy.

QUESTION: Can you say anything else about her travel?

MR. MCCORMACK: In terms of her travel, well, she's going to be going to Brussels to talk about -- she's going to have a meeting with her NATO counterparts up in Brussels. The real -- the centerpiece of that discussion is going to be Afghanistan. Again, we are going to be talking about our support in a variety of different ways for Afghanistan. We have done a review of our programs and our strategy in Afghanistan, and Secretary Rice is going to be talking about that. We believe that we're on the right pathway. We're going to -- she is going to talk about the kinds of resources that we're going to dedicate to making sure that we succeed in that mission. She's going to talk to her NATO counterparts about the importance of NATO as an organization, making sure that it is committed in all the right ways to succeed in that mission. I'm sure that they'll talk about the caveats issue. That's been one that's been -- it's been an issue that's on the table. It's important. It's particularly important to those countries with troops in the south; the Canadians, the Brits, for example.

So we'll talk about that. I would expect they'll probably also, while they're there, touch upon the issue of Kosovo. It's again an issue that's going to be in the news, I suspect, for the -- over the next several months. So that's real -- that's what she'll be doing in Brussels.

QUESTION: Sorry, just to get back to Lebanon, about 10 days ago, Tom Casey, when he was announcing the 20 Humvees, which is part of the initial 285-Humvee package, he said that the U.S. was going to be asking for additional military funding for the Lebanese military. Do you have any figures on how much you're asking Congress for? I know that it's being packaged together with the humanitarian aid.

MR. MCCORMACK: I do.

QUESTION: Do you have any special figures?

MR. MCCORMACK: I do, but I can't share them right now. No, Sue. We're going to -- I'm going to let the Secretary make any announcements of numbers?

QUESTION: What does substantial mean, though? Because it could mean hundreds of thousands, it could mean billions. I mean, the figures out in the region are really -- as you said, what did you say, exorbitant figures? I can't remember --

MR. MCCORMACK: Exorbitant.

QUESTION: Exorbitant, yeah, with $7 billion and then the other one was $4 billion for what --

MR. MCCORMACK: Right.

QUESTION: -- the Lebanese Government would like, of which the U.S. will provide a substantial amount, so --

MR. MCCORMACK: The -- I'm just going to say that the U.S. package will be substantial.

QUESTION: Thank you.

MR. MCCORMACK: Thank you.

(The briefing was concluded at 1:31 p.m.)