Interview With Reuters

2:00 p.m. EST

QUESTION: We thought we would start with North Korea. The South Korean Defense Minister today said that North Korea may be planning another nuclear test before -- either before or during the resumption of six-party talks. Do you have any information about that?

SECRETARY RICE: I can't comment on that. I don't have any indication that they are going to. But if they were to engage in something, it would obviously just deepen their isolation. So we'll just see.

QUESTION: But at least you have nothing, though? You're watching that?

SECRETARY RICE: I have nothing for you on that. Nothing for you on that.

QUESTION: Must North Korea take irreversible steps for the six-party negotiations next week to be a success or would a reversible step such as a temporary pause in plutonium production at Yongbyon be enough?

SECRETARY RICE: Well, there have to be concrete steps that demonstrate that the North Koreans are serious about denuclearization. I don't want to try to prejudge the outcome of the negotiations, but I think everybody is looking for concrete steps. This is going to be a process and so I don't think we ought to try and judge the first step on its own merits, but rather look at it as a part of a set of steps that we are going to take toward denuclearization.

What we can't do is get into a situation where months down the road we've had nothing that demonstrates that the North Koreans are in fact committed to what is there in the six-party document from '05, and that clearly means that the denuclearization has to be irreversible. But I don't think we have to judge each set of steps --

QUESTION: Each step.

SECRETARY RICE: Right, by that criteria.

QUESTION: The Administration has come a long way in its requirements for North Korea in that regard. I mean, early on people wanted everything frontloaded and things to be --

SECRETARY RICE: Well, this has to be pretty frontloaded. We have to have steps and I don't think we are talking about a negotiation here that anybody is prepared to go on for years to try to get the North Koreans to denuclearize. You also have to remember that we have a different context for these negotiations. We have Resolution 1718. North Korea is under sanctions. I think we have a much more unified set of policies among the other parties to the six-party talks. So we are in a different situation than we were a couple of years ago.

QUESTION: If you did get a suspension or a halt in Yongbyon activities next week, what do you do to ensure that when the Sanctions Committee in New York then takes up the Resolution 1718 and begins to make some hard decisions about how that resolution is going to be implemented, how are you going to ensure that everybody is going to say, yeah, we need to go through with this resolution and not -- I mean, because there's some concern that if you show progress in Beijing then people will say, well, you know, we can kind of pause on the sanctions?

SECRETARY RICE: I don't think you're going to see that.

QUESTION: You don't think so?

SECRETARY RICE: No, I don't. I think people understand that Resolution 1718 is aimed at the situation that obtains as a result of the North Korean nuclear test. And the six-party negotiations are to try to get us back on a path to denuclearization, but that doesn't undo the fact that the North Koreans tested a nuclear weapon, it doesn't undo concerns about proliferation of materials, it doesn't undo concerns about pressuring the regime. So no, I don't -- people may argue that. I haven't seen any evidence that people are going to argue that we should start relaxing sanctions just because we've made one step forward in the six-party talks, if indeed we even make one step forward.

QUESTION: What kind of progress would you envision in the working group talks on the financial assets, Banco Delta Asia?

SECRETARY RICE: Well, the working group is first and foremost to be very clear with the North Koreans about what the requirements, our legal requirements, are. Because remember, this is about illicit activities. This is not a set of sanctions. This is North Korean illicit activities. And so there's no kind of schedule for progress or anything like that. Obviously the issue is: Are the North Koreans prepared to start to try to rectify the situations that led to this in terms of illicit activities? They know how to stop this anytime, stop illicit activities.

QUESTION: Has Chris Hill been given authority to -- or flexibility to deal on that financial assets issue?

SECRETARY RICE: Chris Hill will not be the person doing the financial --

QUESTION: No, Glazer, okay. I wanted say --

SECRETARY RICE: Right. The Treasury Department is going to handle those on a separate track.

QUESTION: Right. But you're the Secretary of State and the policy is first and foremost here in this building. And there is at least some concern among Republican partisans of this Administration that in fact there has been a decision to show more flexibility on this financial asset issue.

SECRETARY RICE: The financial BDA, Bank of Macao, has to do with the North Koreans having violated our laws and we are not going to allow them to continue to violate our laws. But you know, obviously we will look at the totality of all of this and see where we are after the next couple of rounds.

QUESTION: Okay, one more on North Korea. Under what conditions would you send Chris Hill or anybody else to Pyongyang?

SECRETARY RICE: Well, I think that is just not an issue at this point. We have a way forward out of the September 19th agreement and anything that we would do would be in the context of trying to fulfill some element of that agreement. And so I think we will just see what makes sense, what steps make sense in the context of that agreement.

QUESTION: Could we talk about Iran for a moment? You've repeatedly made clear your reservations about talking to Iran about Iraq because of the concern that they would demand some kind of compensation. Just because they might seek compensation though doesn't mean you have to give it to them, and I wonder why it is not conceivable to talk to them and see what they say without giving away the store.

SECRETARY RICE: Well, here's the issue. We created a circumstance in which Iran can talk to us anytime that they meet the condition that the international community has set out of concern for their nuclear program -- anytime, anywhere, about anything. But if we are going to have talks about issues, let's do it in that context where the United States is not in a position of rolling back a condition with which we and the international community are completely agreed.

Now the question of stabilization of Iraq, if, in fact, the Iranians believe that the stabilization of Iraq would be in their interest, they should do it. They are also in discussions with the Iraqis about Iraq. They are members of the International Compact for Iraq and they engage in those discussions about Iraq. And so there's no absence of ways for the Iraqis to -- I'm sorry, for the Iranians to talk about Iraq and about Iraq's future and what they might do to stabilize Iraq.

So that makes the question why then would you want to have comprehensive bilateral talks with us in which Iraq is the centerpiece? And it suggests to me that it means that there is some trade-off here that they're seeking, and it just -- it has costs in terms of even the sense that the United States would be prepared to kind of deal on Iraq in the context of these other things or to strike a deal putting these other things on the table. There are plenty of ways to talk to Iran. They just haven't chosen to take it up. If they want to talk, they can talk. So why do they want to talk in -- and by the way, they've never made any indication that they do in fact want to have these bilateral comprehensive talks in which Iraq is the centerpiece. That's not --

QUESTION: It almost sounds as if you feel like a nuclear-armed Iran is a greater threat to American interests than a destabilized Iraq.

SECRETARY RICE: Well, let's remember that the center of gravity about stabilization in Iraq is in Iraq. It starts first and foremost with the Iraqis dealing with the most recent problems of sectarian violence that have arisen and a number of other problems dealing with their own political reconciliation and then dealing with people who are killing innocent Iraqis. That's the center of gravity for the stabilization of Iraq.

It is a false notion to say, oh, well, if you dealt with Iran you could stabilize Iraq. There's no evidence that that would be the case. Can Iran contribute by ceasing activities that are contribution to destabilization? Of course. But the center of gravity for dealing with the Iraq problem is in Iraq. And given that the -- a nuclear-armed Iran, yeah, you bet that's a problem for American foreign policy and foreign policy in the region and foreign policy of every other state in the international community, which is why you've had such common purpose to try and prevent the Iranians from getting the technologies that would lead to a nuclear weapon.

So it's just not -- the argument isn't right that somehow if you're not willing to let Iran have a nuclear weapon then -- sorry, that if you allowed Iran to have a nuclear weapon then you could stabilize Iraq. It just isn't true.

QUESTION: You've repeatedly called, in vain, for the Iraqis to find a way to work for national reconciliation and there have been calls like that for multiple -- many months, even years now. Does the fact that the current government has simply been unable to do that since it's come into office simply demonstrate that it's too weak to do that?

SECRETARY RICE: It's been seven months. It actually hasn't been years. It's been a matter of seven months. And it is a government that faces multiple challenges, including it faces a challenge in the way that its coalition is put together. It's a very broad coalition. But as almost any coalition government will tell you, when it is very broad it is also very difficult to get anything done because you're always trying to deal with different constituencies.

And so I think Prime Minister Maliki and the other leaders of Iraq -- and it can't just be Prime Minister Maliki -- are going to have to come to terms with what coalition of parties, what coalition of actors, can support the government in doing the two or three things that it needs to do. It needs to get an oil law. It's actually been fairly close to getting a national oil law. It needs to make some movement forward on the rules of de-Baathification. And it needs to deal with the problem of death squads arising out of militias. That's the agenda really and I think the government needs a coalition that will support a program there. And they are working on it and, yes, it's been some time, but these are pretty difficult and hard issues. I think they have a new urgency since the sectarian violence has spiked.

QUESTION: Do you think more U.S. troops would help stabilize the country?

SECRETARY RICE: Well, look, I'm not going to prejudge that question because I think this is a question for the deliberations on the way forward so, you know, I'll discuss it in that context.

QUESTION: The United States has spent close to $400 billion and nearly 3,000 American lives in Iraq since March of '03 and the result is a country that is clearly less stable than it was under Saddam.

SECRETARY RICE: Less stable? For whom?

QUESTION: For the Iraqis, is it not less stable, given the amount of violence there is --

SECRETARY RICE: Well, for the Kurds and the Shia that he gassed? For the Iranians, of whom he killed one million? For the Kuwaitis that he occupied? For American pilots that he shot at routinely? You know, it's an odd definition of stability. This was a regional threat that had dragged the United States into war in 1991 and we tried a strategy which, by the way, I fully supported at the time of ending his occupation of Kuwait and then essentially trying to contain him. That was the strategy. You're going to do it with sanctions and weapons inspectors and no-fly zones and you know an awful lot of, by the way, trouble to try to contain him.

One of the costs of that was sanctions -- for the Iraqi people -- were sanctions that were actually very hard on the Iraqi people but not very hard on the regime because, as now know through bribery and the Oil-for-Food efforts, they were -- the regime was doing just fine. The regime was also rebuilding its military capability and, yes, in fact continuing to pursue not at the level that we thought but at a level a continued option on weapons of mass destruction. So I don't consider that stable.

Now, the current situation is difficult because they're trying to make a transition from tyranny to something that is -- that relies on politics rather than oppression, and that's very hard and it's in a context in which al-Qaida frankly got ahead of the curve and managed to do exactly what Zarqawi said he was going to do, which was to set off sectarian civil strife. And so it's very difficult.

But we shouldn't confuse difficulty in Iraq today which, no, is not stable, but call Saddam Hussein's Iraq stable because that just flies in the face of a history of his aggression in the region and his aggression against his own people, not to mention his threats to our interests.

QUESTION: On the Arab-Israeli peace process, you said on your recent trip that you thought there may be an opening coming soon because of the fragile ceasefire in Gaza -- Olmert's speech. But yet the unity government still hasn't been formed. Tensions are rising in Gaza. Some people are saying it is edging closer towards a civil war. Where do you think that opening is?

SECRETARY RICE: Well, I still think that the opening is because Israelis and mainstream Palestinians, the Palestinian Authority of Mahmoud Abbas, et cetera, want, I think, to find a way to move this process forward. That's really where the opening is. Now, I'd be the first to say that in order for that really take off, there is going to have to be some resolution of the Palestinian internal conflict. And if the national unity government isn't the way that it's going to be resolved, then they have to find some other way to resolve it. I think it is a matter for Palestinians with the help of, as I understand they've reached out to -- broadly among Palestinians to try and resolve it, but that is going to be an important element whether that opening is there. But I think the opening is really ironically between the Palestinians and the Israelis.

QUESTION: But with the tensions rising in Gaza, I mean, we've seen in the last two days that it's become a very difficult and very tricky situation on the ground. What on a practical level do you think the United States could be doing? Could General Dayton be doing something more?

SECRETARY RICE: General Dayton is working with the security forces, but you can't build security forces overnight to deal with the kind of lawlessness that is there in the Gaza, which largely derives from Hamas's inability to govern. And their inability to govern, of course, comes from their unwillingness to meet international standards. This is one, I think, the Palestinians are going to have to find a way to resolve and we are trying to support Mahmoud Abbas in doing that. I think people have made very clear that we are prepared to and in fact are working hard on the reform of his security forces even in the absence of a political resolution of the conflict among Palestinians. And I think you'll see work to try to help create better structures for the presidency to deal with the outside world. You know, but that's all the work that the international community is trying to do. I think the question of how they're going to resolve the political conflict really is a question for Palestinians.

QUESTION: On the issue of President Abbas's security forces, are you planning a -- in a supplemental to ask for more funding and do you think that you're going to be able to convince Congress that you'll be able to ensure that the funds reach President Abbas and his security forces and that you don't have additional guns floating around the territories that get into the wrong hands?

SECRETARY RICE: Yes. I don't know -- I don't think we'll probably do it in a supplemental, but we are going to request funding. And it's a complicated matter of where the funding might come from, but you needn't worry about that. It's just a matter of, yes, we will request funding to support the security reform and I think we will get support.

QUESTION: And how much funding are you going to be asking for? What is this going to buy?

SECRETARY RICE: Well, this is to support General Dayton's security plan that he's working with other states in the region and I don't want to get into quoting a number now. We're working on that number. But the important thing is that we are going to adopt extremely concrete and tight measures to make sure that the money is going to the right places.

QUESTION: Are you talking tens or hundreds of millions?

SECRETARY RICE: We're talking tens of millions.

QUESTION: What have the Saudis told you about what they'll do if there's an all-out Sunni-Shia war, civil war?

SECRETARY RICE: They haven't told me anything -- what I read in the newspapers.

QUESTION: Okay. How about the U.S. Government then?

SECRETARY RICE: Look, I think that the Saudis have been very clear that they are concerned about the situation in Iraq and that they believe that the only answer is to have a government that is equally representative for the interests of Shia and Sunnis as well as Kurds. They have therefore been very active with us, particularly with Ambassador Khalilzad, on reaching out to Sunnis, helping with Sunni outreach, helping with tribes with which they have connections, and that's been the nature of the discussions. What can Saudi Arabia do to help ensure that the Iraqi Government will be one that is representative of the interests of Sunnis as well as the interests of Shia? That's been the nature of the conversation with the Saudis.

QUESTION: So are you then not concerned at all that if this war continues and becomes even worse that they may feel an obligation to come in on the side -- more directly on the side of their --

SECRETARY RICE: It doesn't help us to try to talk about hypotheticals here. What is very important is, yes, there are regional implications of what happens in Iraq. I think that's clear to everybody. The best strategy then is for the regional powers to do everything that they can to help bring about the kind of Iraq that they would like to see. I have said to the Arab states that they should support Sunni engagement in the Iraqi Government -- I think they're doing that; that they should recognize that the Iraqi Shia are Arabs not Persian and therefore not necessarily drawn to Iran but rather drawn to Iraq's Arab traditions and Arab identity.

And, you know, we've gotten some good cooperation. I would just cite the fact that Amr Moussa, the head of the Arab League, has been very responsive in going there and working with the Iraqis. I think that they want this to work. So that is what they are concentrating on. But yes, it has regional implications; there's no doubt about that.

QUESTION: One of the regional implications of Iraq and Iran's involvement has been the Saudis and other GCC states recently came out -- commissioned a study for nuclear power development in their own countries. Is this something that worries you or do you think -- I mean, this Administration has been very forward-leaning in terms of embracing nuclear power. So as a consequence, do you embrace this in that light or do you think that this is a way to get into a nuclear weapon?

SECRETARY RICE: Well, I'd like to know more about it and I think it is something that we should have discussions. When I was in Egypt I did talk to the Egyptians about their -- the work they've been doing to perhaps -- and it was just at the study stage -- perhaps seek peaceful nuclear energy. They gave statistics about how much natural gas they had left, how much access to oil they had left. It sounded to me like it made sense for them to explore nuclear power. I think one would have to wonder about the need of some states for nuclear power given their own energy resources.

QUESTION: Would Saudi Arabia --

SECRETARY RICE: Yes, it is one thing for a state to be running out of natural gas in 34, which is the case of Egypt. It's quite another for a state to be the most oil-rich state in the world. But I think that there is no reason not to discuss it. And remember that the President's view has been all along that clean energy derived from nuclear power has a place in an energy policy that allows growth with a responsible environmental policy. And the question has been how to make that proliferation, if not risk free, resistant. And it is why the President has talked about energy -- I'm sorry, fuel supply for countries from some kind of guaranteed fuel supply of the Nuclear Suppliers Group or an international fuel supply if they were willing to give up the right to enrichment and reprocessing or willing not to pursue the right to enrichment and reprocessing, which brings us back to Iran. That is essentially the deal that has been offered to Iran. It is essentially the way the Russians have structure the Bushehr reactor. So there are ways to have nuclear power that is, if not proliferation risk free, at least resistant to proliferation risk.

QUESTION: In addition to that, though, do you see, and maybe are you discussing, the possibility of extending the U.S. nuclear umbrella to the Gulf States as a way to reassure them if, you know -- against an Iranian nuclear program?

SECRETARY RICE: Well, the issue right now is to prevent an Iranian nuclear weapon and that means halting Iranian access to technologies that can easily be diverted to -- from civil nuclear use to nuclear weapons use. And it really all comes down to the fuel cycle, and that's where our concentration is. We have had a security dialogue, the Gulf Security Dialogue that is going on with the states of the region, because the security environment is changing. And I think those discussions are going to continue. It's a kind of companion, if you will, to the political dialogue that we're having in the GCC+2 where I think these mainstream Arab forces are -- Arab countries recognize common interests that they have, common interests that they have with us for a stable Iraq, Lebanon, Palestinian territories leading to a state where they -- where people recognize that the extremism that is brewing and some of -- much of which is fueled by state sponsorship in Iran is a problem for the region. So of course we're going to have a security dialogue, and we are, as well as these political discussions. But the overwhelming interest right now is to prevent Iran from going there.

QUESTION: Any closer to a resolution on Iran?

SECRETARY RICE: I keep getting notes that say we're making progress, so I assume we're making progress.

QUESTION: On Sudan. What are your options on Sudan now? Prime Minister Blair says that he would support a no-fly zone in Darfur if there isn't a resolution soon on this and if the Sudanese refuse to agree. So what are you looking at? Do you support a no-fly zone? And what other options are you exploring?

SECRETARY RICE: Well, Andrew Natsios is out there right now. And the best outcome obviously is that the Sudanese will accept the compromise that Kofi Annan worked out in Addis Ababa. And I think the Sudanese need to be convinced -- and we do have a unified international position on this -- the Sudanese need to be convinced that if they are not willing to accept that help from the international system, then they're going to be held accountable for anything that happens.

I think beyond that, there are all kinds of tools at the disposal of the international community. There are already standing sanctions resolutions in the Security Council. There is the possibility of designations. I mean, there are lots of tools and I think we'll be exploring those options.

I can't really comment at this point on the no-fly zone. It's an idea that's been out there, but I don't think we know enough about it at this point to -- I don't know enough about it to really comment. I think this is something that we would need to look at real closely. But the thing right now is to try and get the Sudanese to agree.

QUESTION: Did Andrew Natsios give the Sudanese a deadline when he spoke to them this week?

SECRETARY RICE: He certainly told them that it was urgent. We don't generally work with hard deadlines.

QUESTION: Just a quick one on Cuba. When Fidel Castro finally dies, the United States Government will have its first opportunity in more than four decades to deal with at least a different leader or leadership -- a different leader in Cuba. What do you plan to do to seize that opportunity?

SECRETARY RICE: Well, the first thing we are going to make clear is that the Cuban people deserve to have free and fair elections just like every other country in the Western Hemisphere has, and that the United States does not expect to support the transfer of power from Fidel to another member of his regime as if somehow you can skip what is, I am quite certain, the desire of the Cuban people to have a free choice. That's going to have to be supported by the international community, and I think there's a general sense that that is the case. We have a compact that we -- with the Cuban people that the Commission on Transition to a Free Cuba issued. It makes very clear what the United States would be prepared to do in the event of Fidel Castro's death, including humanitarian assistance, including recognizing that the future of the Cuban political system rests with Cubans on the island, but most importantly also being very clear that this has to be a democratic transition, not one long-serving strongman to another strongman.

QUESTION: And if it's not, do things simply stay frozen?

SECRETARY RICE: Sorry?

QUESTION: If it's not a democratic transition, if it is indeed, you know, one member of his leadership to another, nothing changes from your point of view?

SECRETARY RICE: I wouldn't assume that that is a configuration -- an outcome that's necessarily stable. I think you're going to have pressure in Cuba for change. And I think you're going to have the best way to express that in a peaceful way is through a democratic process.

Now, obviously, it's a process that will have to be prepared and that the international community has done this for any number of people -- Liberia, the DROC, all kinds of -- Haiti, where you have a period of time to prepare a transition for democratic elections. I think that would be an ideal role, for instance, for the Organization of American States, for the UN to be involved in that kind of preparation. But the goal has got to be very clear. There have to be free elections in Cuba.

QUESTION: I was going to ask do you have anything new on the state of Fidel Castro's health?

SECRETARY RICE: I don't, no.

Okay, thank you very much.

# # #

2006/1122