MR. MCCORMACK: Good afternoon, everybody. How are you? How was the weekend? All right.

QUESTION: (Inaudible.)

MR. MCCORMACK: Huh, I look pale?

QUESTION: Yeah.

QUESTION: You've been away?

MR. MCCORMACK: I’ve spent a long time on an airplane.

QUESTION: Really?

MR. MCCORMACK: Okay. I have a brief note for you, to be in the briefing and then we can get right into questions.

In yesterday's State of the Union the President urged members of Congress to show the compassion of America and reminded them that for people everywhere the United States is a partner for a better life. Today, the State Department launched a new website, focused on U.S. leadership in improving the lives of millions of people around the globe by empowering them to consolidate the democracy, increase trade and investment and enjoy healthier, longer lives. The site is unique in serving as "first stop" for information on the wide range of U.S. foreign assistance programs and contains valuable information on the latest development in innovative U.S. approaches to foreign aid. I would encourage you to visit the site from time to time at usinfo.state.gov.

And with that, I'll be pleased to take your questions.

QUESTION: Well, if there’s nothing on that. We have two places, Iran and --

MR. MCCORMACK: There’s no follow up on the Middle East?

QUESTION: Is it a replacement for the magazine you decided to suppress?

MR. MCCORMACK: No. No, it's not.

QUESTION: Well, there's been a lot of rhetoric --

MR. MCCORMACK: (Inaudible) Okay, it generated some interest.

QUESTION: Is this in coordination with some of the Secretary's announcements from last week? That the State Department is going to spend more -- devote more personnel and resources to, you know, shaping events and spreading democracy?

MR. MCCORMACK: I don't -- in terms of some of the initiatives, in terms of making the United States a more welcoming place when visitors come here, I think that will certainly be part of it. But the bulk of it is focused on talking about a lot about the various programs that are already out there. For instance, in fighting the spread of malaria and AIDS, what we're doing in terms of development and humanitarian assistance, those kinds of programs. But I'd encourage you to take a look for yourself.

QUESTION: Well, can you say how you think that this is going to differ from the pretty extensive couple of websites that you already offer, which is the State Department and the international version of that?

MR. MCCORMACK: I would urge you to visit and judge for yourself.

QUESTION: Under whose auspices does this come within the Department? Who's doing it?

MR. MCCORMACK: This is under the auspices of our Under Secretary of State for Public Diplomacy Karen Hughes.

QUESTION: The Secretary's spoke a lot about compassion that week, sort of -- does it matter what the President said, I thought,-- but let me ask you about news.

MR. MCCORMACK: (Inaudible) news.

QUESTION: A little bit more headline.

MR. MCCORMACK: Okay. All right.

QUESTION: You know I could ask about the president of Iran using some of the same rhetoric he's been using for a while: they won't yield to bullies (inaudible) again. But on a specific front, the prime minister is talking about halting intrusive UN inspections of facilities and resuming large-scale enrichment of uranium if Iran is taken before the UN Security Council.

MR. MCCORMACK: Well, we -- these are more threats from Iran that if followed through on would take Iran in just the opposite direction that the world is calling on them to go. We will have a vote tomorrow in the IAEA Board of Governors on the question of referring Iran to the Security Council. Certainly the United States is going to vote for a report on Security Council at this time from the IAEA Board of Governors. Other countries will have an opportunity to vote on that as well. We expect that that measure will pass and so Iran will find itself before the Security Council.

And the message that is going to be spent very clearly to Iran is that they have crossed the line. That they should come back in line with their Nonproliferation Treaty obligations, come back in line with the commitments that they have made to their negotiating partners: the EU Three. And come back in line in terms of cooperation with the IAEA. The IAEA Deputy Director for Compliance has delivered to the Member states of the IAEA Board of Governors a very interesting and, should I say, disturbing report, concerning what they have found on their most recent visit.

So again, Iran is taking itself -- the regime is taking the Iranian people 180 degrees opposite from where the rest of the world is headed on this issue. The rest of the world is very concerned about the fact that Iran continues to pursue development of nuclear weapons. And we would call upon the Iranian regime to suspend their activities related to enrichment and return back in a serious manner to the international community on this issue. And the specific request regarding Iran will be outlined in the resolution that's voted on tomorrow in the IAEA Board of Governors. It asks for several specific things for Iran to do and it will also refer the matter, or report the matter to the Security Council.

QUESTION: Report is the word?

MR. MCCORMACK: Report is the technical term. Report, refer, you know, what's in a name -- a rose, et cetera, et cetera. So I won't get into --

QUESTION: Maybe it's too early to ask this question but, you know, there was hope here that the simple matter -- the matter of simply taking or referring or reporting the situation to the Security Council might have some productive impact, might cause Iran to reverse course. Do these statements suggest that ain't going to happen or is it too early to make that judgment?

MR. MCCORMACK: Well, I think at this point it's too early to make that judgment, Barry. First of all, we haven't had the vote yet.

QUESTION: Sure.

MR. MCCORMACK: And we'll see how Iran reacts. They will have a period of a little over a month before the Security Council takes action on this report from the IAEA Board of Governors. That was part of the agreement that we had with the P-5, with Secretary Rice and the other foreign ministers agreed to in London yesterday -- yesterday, this morning, 1 a.m. Tuesday, so yesterday.

QUESTION: Sean, can I follow-up on IAEA? IAEA is concerned, don't you think that ambassador, the U.S. Ambassador to India, Ambassador Mulford, put India and the U.S. relations on the spotlight because India was working, I think, behind the doors as far as the working is concerned and in favor of the U.S. and European Union, and some people are calling that Ambassador should be recalled or should resign because of his personal remarks, if he have made personal remarks.

MR. MCCORMACK: Well, he himself has spoken to this issue. Ambassador Mulford is a distinguished ambassador. He's doing a good job on behalf of the United States Government in India.

We've talked about the issue of reporting Iran to the Security Council with the Indian Government. We have expressed our hope that they would vote yes. They voted yes back in September to find Iran in noncompliance. We would hope that they would do so again on this resolution. But that is their decision. They're a sovereign country and it is going to be the Indian Government's decision on how they vote. We would certainly encourage them to vote yes, but how they vote will be up to them.

QUESTION: Has the Secretary spoken with anybody --I'm sorry -- anybody in India, with her counterpart or anybody on this issue?

MR. MCCORMACK: I'll check for you on that.

QUESTION: I have a follow-up on that and another question on the report.

MR. MCCORMACK: Okay.

QUESTION: If the Indians do vote no, Congress has threatened not to approve this deal that they have for nuclear cooperation. Is that something the Administration would support?

MR. MCCORMACK: Support what? What would we support?

QUESTION: Cutting India off from the deals that you've been negotiating.

MR. MCCORMACK: Look, we have talked about this before. It came up last week in the context of Ambassador Mulford's remarks. Ambassador Mulford said himself that he was providing his analysis of the political scene in Washington. Certainly there are realities on Capitol Hill concerning these issues. I said that we view them as separate issues. They certainly come up in the same conversation in the context of strengthening the nonproliferation regime worldwide.

So you know, we have talked about this before. There are certainly realities in the Executive Branch. We view these issues as separate issues but we certainly talk about them in the same conversations. As for the Hill, there are strongly held views on this matter and they don't center necessarily on India but on the seriousness of the threat posed by a nuclear-armed Iran, not only to the region but to the world.

QUESTION: And I have a question on the IAEA report and briefing that you received yesterday. It talks about links between the military -- between military work and weaponization and the work being done on the nuclear front. And Ambassador Schulte spoke a little bit about that today. Does this come as a surprise to you? Do you think that this is a kind of further evidence or do you think that this definitively proves that Iran is trying to build a nuclear weapon?

MR. MCCORMACK: Well, the point of the -- as this point, the report has not been formally presented to the IAEA, and I think in terms of detailed comment about it, I'm going to withhold those types of comments until after the report has been finally presented to the Board of Governors. But I think that there are certainly troubling questions that are raised by this report and you touched upon them. What are the linkages between Iran's enrichment activities and a military program? This report, in particular, raises questions about Iran's work on reentry vehicles. It raises questions about machining the uranium into hemispheres. There's only one reason why you would try to machine uranium, highly enriched uranium, into hemispheres: You do that because you want to create a nuclear weapon.

So the report raises a number of very troubling issues that Iran has yet to address. I've certainly seen the news reports out there that the IAEA inspectors traveled to Iran and they sought to access a site at Lavizan that had been raised previously, and there were a lot of suspicions about what was at that site. The suspicions were that that was one of the places where the Iranian regime was conducting nuclear weapons research. Well, that site is no longer there and the IAEA has asked a number of questions about that. What was going on there? They have yet to get answers to those questions. They have yet to be able to visit that site, take samples and to see what possible remaining traces there were of the work that went on there. They also were not able to speak with at least one of the people at that facility doing the work.

So this is just one of many, many questions that have been built up over time. And the interesting -- the thing that I would note about this is that the number of questions is not actually getting smaller with respect to Iran's nuclear program; the number of questions is actually increasing and the questions are becoming much more pointed. And it gets to this issue of linkage between Iran's enrichment activities and its weaponization activities. And we have talked about the fact for some time that we believe that those two things are interconnected, that in fact the enrichment activities that they are undertaking are done with the intended purpose of building a nuclear weapons. And as we proceed in time, we are seeing more and more indications that that is, in fact, the case.

So we look forward to hearing from the IAEA tomorrow in terms of what they have found over the recent months concerning their investigation into Iranian activities. I think that at this point there are a lot of questions that remain to be answered. But those questions point in one direction, and that is that Iran is working to develop a nuclear weapon.

Yes.

QUESTION: Okay, my first question is how big of a setback would it be if Iran did halt these snap inspections that they agreed to under the Additional Protocol? I mean, would that be backfiring or would that just be, you know, kind of a bummer but not really that big a deal?

MR. MCCORMACK: Well, the Secretary talked about this a little bit yesterday, not quite in those terms. But Iran -- the regime -- continues to make these -- continue to make these threats; they're going to do x, y and z, they're going to halt their cooperation, they're going to throw the inspectors out. But what the inspectors are seeing now, what they're watching, is Iran breaking their commitments, their obligations that they undertook to the EU-3. So there is some value in that.

But in terms of taking steps that would renege on their commitments, certainly that is serious and I think the international community would view that as serious. As for what, you know, utility the IAEA would place on the information that they have gotten from those types of inspections, you'll have to ask the IAEA. I think from a political standpoint that Iran's continuing defiance of the international community and taking steps such as throwing out inspectors, such as walking back on their commitments to allow inspections in any time, anywhere inspections, those are serious matters. And all it does is serve to further isolate Iran from the rest of the international community.

So we'll see what the Iranian reaction -- what the Iranian reaction is. I expect that the vote will take place tomorrow to report Iran to the Security Council and then there's going to be some time. There's going to be some time for the Iranian regime to consider its options and to see how it will respond to the very clear signal that the rest of the international community is sending to that regime. And we will have an opportunity at the March 6th Board of Governors meeting to hear from Director General ElBaradei not only about the past work that has gone from the IAEA since the fall Board of Governors meetings, but also what the attitude and actions of the Iranian regime have been in the interim between tomorrow and March 6th, so we'll see how they reaction.

QUESTION: Which brings me to the second question, which is that this time that's been given is to allow the Iranians to consider the Russian proposal which the U.S. has backed in the past. And my second question is how many -- how much do we really know about the Russian proposal? Did you guys sign on to a proposal that might allow Iranian scientists to participate in enrichment in Russia, in a joint program? I mean, are there a lot of questions out there about the Russian proposal or do you guys have a lot of details about the proposal?

MR. MCCORMACK: Well, we've been briefed along the way by the Russian Government on their proposal and they have talked to the Iranian Government about their proposal. And at its core, it would call for a joint venture between the Iranians and the Russians to enrich uranium on the ground in Russia.

Now, in terms of --

QUESTION: (Inaudible) would participate in this and be (inaudible).

MR. MCCORMACK: Well, in terms of the details of it, I'm not sure that they've gotten beyond the discussions about principle, because the Iranians have refused to engage the Russian Government in serious discussions about that. Now, we in supporting the Russian Government in their activities, have made it clear that the object of this proposal is to ensure that the Iranian Government isn't able to obtain the know-how and the technology as well as the materials in order to perform enrichment on Iranian soil. They have structured their deal on the Bushehr reactor in a similar manner, so that the Russian Government would provide the fissile material for the Bushehr reaction and then take it back.

Look, the Russian Government doesn't -- it's important to remember -- the Russian Government doesn't want Iran to have a nuclear weapon anymore than the rest of the world.

QUESTION: But President Putin has used words like nondiscriminatory when he describes this deal and so -- leading some people to conclude that the Iranian scientists would be allowed to go to Russia and participate in this enrichment. So my question is when you guys backed this proposal, are we saying that you signed up for a proposal that did not allow the Iranian scientists to acquire the know-how of enrichment, to physically be on the ground in Russia and acquire this know-how? Is that --

MR. MCCORMACK: Again, we've been briefed by the Russians on it. And the very core, the principal of this agreement, is that Iran not be allowed to have access to those critical technologies and that know-how in order to do enrichment. That's the whole point here.

QUESTION: Can I follow-up on that?

MR. MCCORMACK: Mm-hmm.

QUESTION: So are you saying that you signed on in theory to the principle of such a plan and, you know, you're not going to give your kind of final blessing of the proposal until you see the fine print: what kind of equipment would still remain in Iran?

MR. MCCORMACK: Well, I'm not sure there is any fine print at this point because the Russians have --

QUESTION: Well, I mean, isn't there a lot of questions about if such a proposal would take place, not only what Farah said but also about what kind of equipment would remain in Iran, whether they'd still have equipment that could help them further their nuclear capability?

MR. MCCORMACK: Well, that's why -- I keep getting back to the point that we, the Russians, and everybody else agree that Iran should not be allowed to develop a nuclear weapon. It's a destabilizing -- that would be a destabilizing development for the world and the region and especially for Russia that borders on Iran.

So the core of any potential agreement, and I say potential here because the Iranian's have given no indication thus far that they will engage the Russian Government or anybody else, for that matter, in a serious manner, in addressing the legitimate concerns to give the international community objective guarantees that they will not be able to develop a nuclear weapon under cover of a civilian nuclear program. So certainly the international community, the key there is, looking for objective guarantees. And the Russian Government shares the interest and the views of the international community on this matter. So they have, in good faith, made this offer to the Iranian Government, as well as the EU-3, to try to address Iran's desire to have nuclear power.

Now, that raises the question of why does Iran need nuclear power. They sit upon some of the largest reserves of hydrocarbons in the world: gas and oil. But that aside, that question aside, the international community has said we will try to address your concerns. We will try to address your desire to have a civilian nuclear power program. But in return, you have to provide -- and the way the deal is structured -- have to provide objective guarantees to the international community that you're not going to try to develop a nuclear weapon, which is what we believe you have been trying to do for the past 18 years. Thus far, we have heard -- the world has heard nothing but words of obfuscation and threat from the Iranian Government.

And one further point. The leaders of the Iranian regime keep talking about they have a right to nuclear power, but that's not the question here. Along with signing up to a treaty, the Nonproliferation Treaty, come obligations. And what the international community has found is that the Iranian Government has not lived up to its obligations and, furthermore, the Iranian Government is trying to develop a nuclear weapon under the cover of these civilian nuclear programs.

But I wonder: Do the Iranian people really know what has been offered them? Is the regime telling them the truth about what has been offered them? Have they been told about the far-reaching proposal that the EU-3 has put on the table that would allow them to have a civilian nuclear power generating capacity? Do they know that the Russian Government has put this proposal on the table? You know, it's for you as journalists to ask these questions. I'm not sure that they have heard that.

So what the regime is doing is, by confronting the international community on this issue, they are -- they themselves are the ones who are responsible for isolating the Iranian people more and more, every single day, from the rest of the world. It's not -- the people responsible for that isolation are not the people of Europe, the United States or Asia or any place else. It's the leaders of the Iranian regime that are the ones that are isolating the Iranian people.

QUESTION: Sean, a quick follow-up.

MR. MCCORMACK: Yes.

QUESTION: Sean, in the Middle East, everybody is following of course, the whole issue in the Middle East from the Iranian point of view and many around there see it through the prism of Israel, Iran and the strategic balance over there.

First, to what do you specifically attribute the harsh language from Iran towards the U.S., specifically towards Washington?

MR. MCCORMACK: Well, the --

QUESTION: And how can you put it in the context of Israel and Iraq? Many think that the leverage that the Iranians have is the deep penetration, actually they have into southern Iraq, where if they were needed eventually by the British and the Americas. Can you give us a little bit, a picture, a little bit of all those neighbors -- Israel, Iraq, the Shiites in Iraq, very close to Tehran? How the U.S. can balance all the demands strategically from the good neighbors around and at the same time send a message to Iran that it's an international community message, it's not just only American?

MR. MCCORMACK: Well, I think you only have to look at the comments from around the world about Iran's pursuit of nuclear weapons to see the level of concern. As for why the Iranian regime chooses to use the United States as a foil, if you will, for distracting the attention of the world or their people from any other variety of issues, you'll have to ask the Iranian regime why they choose to do that. I would suggest that there's a long history over the past two decades of doing just that.

In terms of where Iran, you know, finds itself geo-strategically, they have to their east a neighbor, Afghanistan, that is now on the pathway to democracy; to the west they have a neighbor, Iraq, that is now struggling to build those very democratic institutions that would provide for a better way of life for the Iraqi people. And it is ironic that the Afghans and Iraqis in Iran were able to vote for whatever candidate they wanted to in the elections that took place in both of those countries. The Iranians people didn't have that same choice. When the voted for a president, they didn't have the ability to check off one of the names of the thousand people that had been eliminated from the ballot by fiat by the Guardian Council, which is how the elections are run in Iran.

The Iranian regime also as they look around the rest of the Middle East will find that there are increasing steps towards greater freedom and democracy throughout the Middle East. Now, the process of democracy, as the Secretary has said, through the process of greater freedom and the spread democracy throughout the region is sometimes messy. We get unexpected results like we did in the Palestinian elections. But this is -- a project of a generation. And it is a project of opening up the political spaces in these countries in the Middle East so that those individuals who previously did not have a choice to express themselves and to express how they wanted to be governed, now will have the opportunity to express that choice.

QUESTION: But (inaudible)

MR. MCCORMACK: That is all to say, that the rest of the region is headed in one direction, a more positive direction. The Iranian regime is headed in the other direction. They're headed in a direction more -- of more repression: artists aren't able to play classical music in Tehran. We just heard the other day about the Iranian regime breaking up protests by transit workers who want to express their opinion that they deserved a different kind of deal for their work, but they weren't allowed to do that. And you can go on and on and on in terms of the examples of this regime. And this is not just a concern of the United States; this is a shared concern by the rest of the world.

On top of this, you also have an Iranian regime that is essentially the central banker for terrorism in the region. They are the largest sponsor -- state sponsor of terrorism in the region. So, yeah, these are all indicators that this is a regime that is headed in the other direction.

QUESTION: But would you put the nuclear program of Israel, because in Tehran this is how it is seen: it's they have it, why aren't we allowed to have it? I mean, what's your answer to -- how can you address this issue?

MR. MCCORMACK: Our view and the view of the United States has always been that we look forward to a Middle East that is free of nuclear weapons. And we are working right now within the confines of the nonproliferation regime to see that happen.

Yes.

QUESTION: Sean, can we go back to the Russian proposal? If I understood well what you said, it implies that if between the Board of Governors tomorrow and the 6 March IEA -- wait --

MR. MCCORMACK: IAEA.

QUESTION: -- meeting. If in between -- during this month, the Iranians say, okay, we accept to examine seriously the Russian proposal, would it change something for you in the Security Council?

MR. MCCORMACK: Let's see, we'll see tomorrow in the resolution that's going to be voted on a series of steps that the IAEA Board of Governors calls upon Iran to conform with. So you'll see exactly what those steps are. But regardless of that, Iran will now find itself before the Security Council. We'll see how they react and we'll see if that reaction, whatever it may be, is satisfactory to the international community. Because the international community is united on this question. We'll see how Iran reacts.

QUESTION: So the Russian proposal is inside EU figures among the steps?

MR. MCCORMACK: Well, what's happened now is that the Iranians have now regressed to the point where they have -- where they left off from the Russian proposal. They have now broken their commitments to the EU-3 so they're much farther back than where -- even where they started six months ago in the eyes of the international community.

Now, I would point out just a little bit of the history here that the August 2004 Paris Accord by the EU-3 was actually in reaction to a previous agreement years before that the Iranians had broken. So they have a -- there's a long history of this and it comes as no surprise to the international community that Iran now has reneged on yet another international commitment. We'll see how they respond.

Teri.

QUESTION: Good, thanks. Speaking of the resolution that's going to be voted on prospectively tomorrow, what can you tell us about how many versions it's gone through? Are you satisfied with the last draft that you've seen? And how much hand did the U.S. have in writing it or was that something that you also left to the EU-3, basically?

MR. MCCORMACK: I believe the European 3, the EU-3, took the lead in drafting it. Certainly we're involved in it and I believe that there is an agreed text at this point. You never -- that's subject certainly to last-minute objections or questions, but there is an agreed text in Vienna now. We believe it's acceptable.

QUESTION: You mean an agreed text that has been circulated to the members?

MR. MCCORMACK: Of the resolution, yeah.

QUESTION: Has been circulated to the members and you've gotten commitments back from them that this is amenable to them and this is --

MR. MCCORMACK: Well, it's amenable to us. We'll see how others react and I think that they'll express that through their votes tomorrow.

QUESTION: Okay. So you'd say it's in final form, then?

MR. MCCORMACK: The text of the --

QUESTION: Yeah.

MR. MCCORMACK: -- the resolution from the IAEA Board of Governors?

QUESTION: Right.

MR. MCCORMACK: Yes. Yes. I mean, again, with the caveat that, you know, there always could be last-minute hands raised and changing commas or a conjunction or that sort of thing, but --

QUESTION: So unlike the -- UN parlance, it's -- there is no "in blue" yet?

MR. MCCORMACK: Charlie, I don't know the specific procedures, but we believe we have what is the final text that will be voted on tomorrow.

QUESTION: A follow-up on Iran, Mr. McCormack?

MR. MCCORMACK: Yes, sir.

QUESTION: Why (inaudible) a policy for nuclear stuff for all or for none, and the matter will be over?

MR. MCCORMACK: Nuclear for what?

QUESTION: For all or for one.

MR. MCCORMACK: For all? Nuclear one is for all or --

QUESTION: Or for one. Because some countries must get and some other ones must not have.

MR. MCCORMACK: That's not a pathway, I think, that we're going to follow.

QUESTION: Excuse me?

MR. MCCORMACK: No, there have -- there have been -- I have -- I remember when I was in graduate school and I've actually read serious academic treatises on just that point, suggesting just that thing. That is not the policy of the United States.

QUESTION: What is the answer? What is the answer to it? We hear nuclear stuff (inaudible) but in this case we hear some others who have and some others must not have. So my point is why a policy for nuclear stuff for all or for one? It’s very serious.

MR. MCCORMACK: I'm trying to address your question in a serious manner. And there have been those that have suggested this. I don't think that that is where the international community is headed.

Yes, ma'am.

QUESTION: Can we change subject?

MR. MCCORMACK: I don't know. Iran? Yes. Yes, ma'am.

QUESTION: It appears that the Government of Iran will be on the Security Council with or without the resolution, the result of the resolution; am I right?

MR. MCCORMACK: They will find themselves, we believe, after tomorrow, before the Security Council, yes. Their file, their dossier, will be transferred to the Security Council, therefore it will be open to possible action by the Security Council. Now, in our agreement with the other members of the P-5, we agreed that we would not seek or others would not seek to take action on that report, that referral, from the IAEA Board of Governors before we have had an opportunity to hear again from Director General ElBaradei on March 6th. There's a schedule Board of Governors meeting on March 6th. So that's sort of the lay of the land where we are right now.

QUESTION: Iran again?

MR. MCCORMACK: Okay.

QUESTION: Sean, don't you have also the impression that you watch what's unfolding now internationally that we are also again facing the same path we've seen with Iraq ten years ago -- investigations, refusal, denial and then confrontation -- and we've seen what it led to.

MR. MCCORMACK: Yeah, I wouldn't --

QUESTION: I would think that --

MR. MCCORMACK: I wouldn't draw those parallels. The Secretary has talked about this, the President has talked about this, and I don't have anything to add to what they've said on the matter.

Yes. Anything else on Iran?

QUESTION: Another issue.

MR. MCCORMACK: Okay, we'll come back to you. We'll come back to you.

Okay, Joel.

QUESTION: Sean, another aspect of Russia. President Bush has spoken about this, Secretary Condoleezza Rice has spoken about this, but it appears that Russia --

MR. MCCORMACK: Well, then what could I possibly have to add if both of those people have spoken to it? (Laughter.)

QUESTION: Russia apparently will not support the funding cuts which are requested by the U.S., EU and others, and does that put us as well as the Russians on a political --

MR. MCCORMACK: Just regarding the Middle East, Hamas?

QUESTION: Hamas, right.

MR. MCCORMACK: Well, I would only point out that Foreign Minister Lavrov was in the room and went over the text of the Quartet statement that was issued on January 30th very carefully.

QUESTION: Can I ask you something on that subject? Israel has decided not to reimburse or not to turn over customs, taxes, et cetera, to the Palestinians. That's right away. And meanwhile, Saudi Arabia and Qatar pledged many millions of dollars to help the Palestinian Authority financially. Do you have any observations on either of those two things, or both?

MR. MCCORMACK: Well, I think they both can refer back to the Quartet statement that was put out two days ago, and that was the Quartet urged measures to facilitate the work of the caretaker government -- and this is referring to President Abbas's government -- to stabilize public finances, taking into consideration established fiscal accountability and reform benchmarks. So there's a commitment here that the international community has made with regard to this interim government. We ourselves are working with other members of the international community to see that those commitments are met. There's another question then when you have a new government, but that's not where we find ourselves at the moment.

QUESTION: (Inaudible.)

MR. MCCORMACK: Well, with respect to --

QUESTION: (Inaudible.)

MR. MCCORMACK: You know, with respect to the Israeli Government, we're working with them on this issue. We're talking to them about it. But we have made it very clear. You've heard from Secretary Rice. You heard from the Quartet. And so this is an international request that the individual governments, organizations, look for ways that they could support this interim government and, again, taking into account the established fiscal accountability and reform benchmarks. So this is a topic we're talking to the Israeli Government about --

QUESTION: (Inaudible) interim government?

MR. MCCORMACK: Yeah, the current interim --

QUESTION: (Inaudible.)

MR. MCCORMACK: There's only one interim government.

QUESTION: Okay.

MR. MCCORMACK: Just one on the Palestinian side. But there is, on the Israeli side, yes, Acting Prime Minister Olmert --

QUESTION: So Israel is not in step with that?

MR. MCCORMACK: Like I said, Barry, we're working with them on this issue.

QUESTION: No, but they've done it. They say they're going to do it.

MR. MCCORMACK: Well, the question here, Barry, is how do you -- how do you in this interim period meet the needs of an authority that needs to continue to govern, needs to continue to provide public order, needs to continue to provide services to the Palestinian people? The current interim -- the current government has made certain commitments to the international community. The current government on the Palestinian side has said that it will live up to certain obligations to the international community. In return, the international community has said we will look for ways to live up to our obligations to the interim government. Like I said, it then becomes another question when there is a new government on the Palestinian side.

QUESTION: (Inaudible) the Israeli Government about this, we can deduce from what you're saying that you think the money should be transferred to this interim government?

MR. MCCORMACK: Well, I'm not --

QUESTION: I know you're not saying that, but --

MR. MCCORMACK: Again, the issue here is how do you support President Abbas in his efforts in this interim period, which best estimates now, could last anywhere from two to three months. The Palestinian Authority has certain needs in terms of budget support, paying salaries. They've derived some of that money from taxes collected by -- or custom duties collected by the Israeli Government. And they have found -- the Israeli Government in the past has found various ways to support the Palestinian Authority based on those kinds of funds in terms of bills being paid.

QUESTION: Well so how are you talking -- you said, we're talking to the Israeli Government?

MR. MCCORMACK: Yeah, and through the normal channels that we always do with our embassy there in Tel Aviv as well as back here in Washington.

QUESTION: It has -- has it risen to the level of a Secretary Rice phone call yet?

MR. MCCORMACK: No.

QUESTION: (Inaudible) the Israelis (inaudible)?

MR. MCCORMACK: That's correct.

QUESTION: Sean.

MR. MCCORMACK: Yes.

QUESTION: According to the Egyptian head of intelligence, President Abbas would be ready to form a government without Hamas, so a government who wouldn't have a majority in the parliament. If Hamas, when it's ready to renounce violence and recognize Israeli, would it be a way out, according to you? Would you support such a solution?

MR. MCCORMACK: Support what?

QUESTION: A government without Hamas and with a minority in the parliament?

MR. MCCORMACK: Well, my understanding is that President Abbas has said that he will look to the majority parliament -- the majority party in parliament to form a government. We are now in the government formation process in the Palestinian areas. That process will unfold according to the Palestinian laws and the Palestinian political process. There was a vote; the Palestinian people expressed their desire for change in that vote. So we'll see what the government is that results from that vote.

We're -- the Quartet, as you can see in its most recent statement, did not try to dictate the composition of that government in any specificity. What it did, it talked about the fact that the court and in terms of the international obligations and the reaction to whatever this new government might be, concluded that it was inevitable that future assistance to any government would be reviewed by donors against the government's commitment to the principles of nonviolence, recognition of Israel and acceptance of previous agreements and obligations, including the roadmap.

So those are the principles upon which the international -- the Quartet have called upon the international community to abide by in reaction to whatever Palestinian government will emerge next. We -- President Bush, just in interviews this morning, made very clear our views -- made known our views with respect to any potential funds -- flowing to the United States -- that might involve -- that would go to a government comprised of Hamas under the current conditions.

QUESTION: We already don't fund the government -- we already don't fund the PA as a policy. The President has signed something like two waivers in the last --

MR. MCCORMACK: Two.

QUESTION: -- three --

MR. MCCORMACK: Three in the past (inaudible) years.

QUESTION: But one of them was paying off an electricity bill to Israel. I mean, salaries of the government of the Palestinian Authority are really pretty much not paid by the U.S. and since December the EU hasn't been paying them. So how deep is this threat really? I mean, are you talking about cutting off humanitarian programs like the USAID -- something like 150 million USAID humanitarian programs or which go through U.S. contractors or are you only talking about direct assistance to the Palestinian Authority?

MR. MCCORMACK: What we're talking about is all of our programs. Now, the Secretary talked about the fact that on a case-by-case basis, we would look at those humanitarian programs that truly benefit the Palestinian people, you know, for instance, I don't want to, you know, I don't want to get too deeply into any prejudging, what any -- the outcomes of any review of our aid programs might be. But on a case-by-case basis, the Secretary has said that we understand that there are humanitarian needs that the Palestinian people have. They are poor people. So we, in conducting our review, looking at the law, looking at our policies, will come up with a judgment on what it is that the United States Government will do.

QUESTION: What about democracy and government and those programs?

MR. MCCORMACK: Well, there are -- I went through this last week, but happy to review it for you in sum. There are three different channels, if you will, that the U.S. Government has for providing funding that would benefit the Palestinian people. You mentioned direct assistance to the Palestinian Authority. That was done three times over the past couple of years via waivers. Over the last fiscal year it was $70 million, $20 million for, as you pointed out, electricity bills and $50 million for promotion of democracy, building democratic institutions. But of that, about $15 million -- 1 - 5 million has already been spent, so there's a remaining portion of that money that has not yet been spent.

There is also indirect -- I guess what you could refer to as indirect assistance. That is AID programs that are implemented via NGOs, nongovernmental organizations. And then there's the humanitarian assistance which is provided through the UN.

QUESTION: So all I'm asking is real quickly, I don't want to -- the second part, the USAID programs are on the cutting block. They could be on the cutting block.

MR. MCCORMACK: That's not how we're looking at it. We're looking at the fact that we have certain obligations to the American people, to our laws. We have to look at what the legal -- what the law says, if, in fact, we do -- we are confronted with a Hamas government. So we're going to look at that review in the context of our policies. We, the Quartet, have laid out the principles that should guide those reviews. The EU is going to do their own review and I would expect that individual countries will conduct similar reviews. So that's the stage at which we find ourselves now.

Yes, Elise.

QUESTION: The Secretary said during her trip that she and the whole building, that the Administration, in fact, was very surprised and caught off guard by the sweeping victory and Hamas. And indeed Hamas seems to be also surprised that they won. And that she said that it's possible that the U.S. just didn't have a good enough pulse on -- the finger on the pulse of the Palestinian people. How are you going to get a better pulse on the Palestinian people, especially in the wake of the fact that you're going to have to deal with diplomatically with a new government that could include Hamas? I mean, a part of that is diplomatic representation, I think.

MR. MCCORMACK: Right. I think you have a good summary of the Secretary's reaction to that question. People ask just who -- for the benefit of those who weren't on the trip -- did you expect this? And she said -- did you see this coming? She said, no. And she's asked her staff to look into that. Why is it that we didn't see this coming? And she talked a little about the fact that maybe we didn't have a good feel for the political pulse of the Palestinian people. So she's asked her staff to take a look at that, why it is that that happened, why it is that this was missed. And she will also ask them, when she has those answers, to go back and take a look and see how in the future you don't miss such things.

QUESTION: Well, isn't it more about getting a general pulse of the people going, not just about election time, but just understanding the people a little bit more. And as I asked to you, do you see a fundamental kind of challenge or improbability you're going to be able to do that when you have this new government?

MR. MCCORMACK: No, I think that clearly we need to do better and she's going to talk to her staff about how we can do better. And I, at this point, don't have those answers for you.

Yes, ma'am.

QUESTION: A question on an incident in Iraq.

MR. MCCORMACK: Okay.

QUESTION: Friendly fire incident. U.S. troops on a Canadian diplomatic vehicle in the Green Zone. Could you give us an update, please?

MR. MCCORMACK: Right now I know that we've talked to the Canadian Government about this incident. It's regrettable and the Department of Defense is now conducting an investigation to determine exactly what happened. But this is, as I've said, a regrettable incident. We've already talked to the Canadian Government about it and the Department of Defense is looking into it.

QUESTION: Does that include apologizing to the Canadian Government or just talk to them?

MR. MCCORMACK: Well, again, we're expressing the fact that this is a regrettable incident and we are going to get to the bottom of exactly what happened.

QUESTION: Have we determined if there were warning shots fired first?

MR. MCCORMACK: I don't think we -- I don't think we have that level of detail right now. At least I don't have it available as to exactly what happened.

QUESTION: Can you give us a description of what -- what do you have about the incident, I mean, you can tell us so we make sure we report it accurately?

MR. MCCORMACK: Let's see. I'll take a look here. I know that it involved the Canadian Chargé d'affaires in Baghdad and there were a couple of convoys, one in the front, one in the Canadian convoy in the rear. As for what transpired between the -- one convoy following and another and shots being fired, that's exactly what's being looked into. I can't provide you any details on that. But it certainly is a -- it's regrettable. Nobody wants these kinds of things to happen and we're going to try to determine what happened so we can take steps to see that it doesn't happen again.

QUESTION: Given that this was inside the Green Zone, which is supposed to be secure, and that this was pretty obviously a diplomatic convoy behind, I mean, is there ever an instance where this --

MR. MCCORMACK: Well, again, you're making -- you're making an assumption there. You said pretty obvious that this was a diplomatic convoy. I don't know that. I'm not trying to say that in the end it won't be found that it was obvious that this was a diplomatic convoy, but we don't know that now. And what is happening is the Department of Defense is very carefully going to look into this incident, they're going to talk to the people involved in it and try to piece together exactly what happened. Nobody wants to see these types of things happen and certainly the -- well, we'll determine exactly what it is that people in the lead convoy knew and what they didn't know and what was obvious and what was not obvious to them and why they took the actions that they did.

QUESTION: (Inaudible) that she was being apologized to afterwards by the Americans on the ground. Is that saying that they're admitting fault?

MR. MCCORMACK: Again, what we're trying to do is piece together the facts here. Like I said, nobody wants to see anything like this happen. Nobody -- you know, our soldiers and our security personnel certainly don't want to fire on innocent people. Certainly not close friends and allies. And so we'll see what happened. We'll see what happened. This is regrettable. Nobody wants to see these types of thing happen.

Goyal.

QUESTION: Two questions, quick on South Asia. One, there is some kind of misinformation in the Indian press throughout India last week as far as this -- these nuclear comments are concerned. As far as India Globe is concerned, they have printed as what you said and what Secretary said, but what they are saying headlines that U.S. wants India on Iran's vote in the IAEA, vote for the U.S. or deal is off between U.S. and India -- nuclear deal. So what I'm asking you, how can you clarify this misinformation or correct or write whatever the information --

MR. MCCORMACK: Goyal, I think we've ridden this horse and put it in the barn. I think we're done with that.

QUESTION: I mean, have you -- I mean, yes or no --

MR. MCCORMACK: Goyal --

QUESTION: -- as to --

MR. MCCORMACK: I gave you an answer, a pretty credible answer too, I think.

QUESTION: Yeah.

MR. MCCORMACK: We have a couple of hands outstretched here, Charlie. Two hands. A double hand raise. How can we -- how can I not call on --

QUESTION: Some questions on Cyprus --

MR. MCCORMACK: It would indicate some type of urgency --

QUESTION: Cyprus.

MR. MCCORMACK: (Inaudible) question.

QUESTION:   It was reported by the Turkish Cypriot press and confirmed by the Turkish officials that the U.S. Government is building illegally a naval base in Karavostassi, K-a-r-a-v-o-s-t-a-s-s-i, in the Turkish-occupied area of the Republic of Cyprus, and to my surprise the opening of this port is included in the Turkish plan for a solution delivered by the Turkish Foreign Minister Abudllah Gul January 24th. I am wondering what prompted your government to open such a base in (inaudible) the U.S. and international law and the UN Charter and is your express (inaudible) support to the Turkish plan connected somehow with the building of these bases in Karavostassi.

MR. MCCORMACK:   Wow, that was a long question. Lambros, I'm going to have to look into that one for you, okay? We'll get you an answer.

QUESTION: Can you check?

MR. MCCORMACK: It's going to take a lot of dicing all the various parts of that question.

QUESTION: Finally, do you know when Deputy Assistant Secretary Matt Bryza is going to be in Cyprus?

MR. MCCORMACK: I don't. I don't.

QUESTION: And the last. Since Deputy Spokesman Adam Ereli the other day praised the Turkish plan for a solution --

MR. MCCORMACK: I think I praised it as well.

QUESTION: You are right, but he said it better.

MR. MCCORMACK: I want to associate myself with his remarks.

QUESTION: With a bunch of nice epithets. How do you comment, however, on the editorial by the Turkish Cypriot newspaper Afrika calling the Turkish plan as a plan of pain and (inaudible) the Republic of Cyprus criticizing, which is in full disagreement with your express support?

MR. MCCORMACK: You know, people disagree with me all the time. That's their right. I have expressed the views of the United States Government, as has the Deputy Spokesman in the Department of State.

QUESTION: Sean, one more quick one?

MR. MCCORMACK: Goyal, no. No, no, no. We're going to go to this gentleman here.

QUESTION: Just to come back quickly maybe on the Ambassador Bolton at the Security Council. A lot has been said about the man and, you know, what is expected or not expected. Two major issues are coming up. Today we've seen Sudan -- Ambassador Zoellick and Madame Minister, but I remember just one month ago the Sudan Government represented at the UN totally refusing this idea of bringing in international troops, UN troops under whichever form. Are you expecting probably any hurdles there in this process? What can Mr. Ambassador Bolton bring in now to the table with the reputation he's got around Washington, D.C.?

MR. MCCORMACK: Well, the reputation that he has around this building is that he is a tough intelligent skilled diplomat. So I expect that he will bring to bear all of his formidable skills on this question. It's important to the U.S. Government. It's important to the world. And I would point out, as Deputy Zoellick did just a while ago, that Sudan already does have international troops in Sudan, so it's not a threshold question of whether or not you let in international troops. There already are -- there already is an international contingent there.

Yes, sir.

QUESTION: Can I just ask one more Canada-related question, if I can? Last week, Ambassador Wilkins in Ottawa stirred up a little bit of nationalism, I think, in Canada over some comments. He suggested that the U.S. wouldn't need to ask permission any time it wants to send vehicles through -- or vessels through the Northwest Passage in Arctic waters. The Prime Minister of Canada, or the Prime Minister-designate has come out and said, no -- yes, in fact, the U.S. would have to seek Canadian permission. What, in fact, is America's policy on that? Does it believe the Northwest Passage, as frozen as it is, is, in fact, international waters?

MR. MCCORMACK: We believe it is an international strait. It's a longstanding policy of the United States Government.

QUESTION: So the United States would not want to -- would not seek the permission of Canada to send a nuclear submarine or --

MR. MCCORMACK: We believe it's an international strait.

QUESTION: Being as you (inaudible) the former prime minister of Pakistan while in town. One, if she -- she was the guest of Voice of America, has she met anybody here at the Department? And also, she and her -- another Prime Minister Nawaz Sharif in London both were criticizing the present government (inaudible) in Pakistan. And they were saying -- both of them -- that U.S. is on the wrong track as far as fighting against terrorism in Pakistan or from that area is concerned.

MR. MCCORMACK: On the first of those, I am not aware of any particular meetings. In terms of Pakistan being a good ally in the war on terrorism, you've heard the President talk about it; we've talked about it many times here. We believe that we have a strong ally in the war against terrorism. Terrorism is a threat not only to the United States but it's a threat to Pakistan. President Musharraf understands this and he is taking actions not only to directly confront terrorism but undertake deeper reforms, longer term reforms in terms of the educational system and other parts of the Pakistani Government. That, if successful, will lead to a better way of life for the Pakistani people, more economic opportunities and a political system that is open to all peaceful voices and will have the ability to express their opinions through the ballot box.

QUESTION: Thank you.

MR. MCCORMACK: Thank you.

(The briefing was concluded at 2:47 p.m.)

DPB # 17