Remarks With Israeli Deputy Foreign Minister Tzipi Livni

FOREIGN MINISTER LIVNI: Hello. I would like welcome again Secretary Rice to the region. We discussed, of course, the situation in the region, the ongoing dialogue between Israel and the Palestinians, the need to reach an understanding between Israel and the Palestinians and to reach an understanding on the widest common ground, which is possible I hope. And of course we discussed the Iranian threats, the need to take some more sanctions against Iran. We discussed the situation in Lebanon. So basically like always never a dull moment in the region, and we discussed all the issues that were mentioned. And thank you.

SECRETARY RICE: Well, thanks very much. Thanks for hosting me here again and we did indeed have a wide-ranging discussion. We focused fairly intensively for most of the time on the dialogue that is going on between the Palestinians and Israelis.

I said to the Foreign Minister what I will say to all Israeli leaders, that we want to be as supportive as possible of this bilateral dialogue. We are hopeful that it can move forward to common understandings of a way forward to the creation of a Palestinian state so that two states can live side by side in peace and freedom. We did have other discussions, including about Iran and very briefly about Lebanon and the importance of the support for the democratic government there, but also the need to make certain that 1701 is carried out.

So it was all in all a very good set of discussions and thank you again for having me here.

MODERATOR: Israel Channel One.

QUESTION: Foreign Minister Ms. Livni, today the cabinet has defined Hamas as an enemy entity. Can you explain to us the consequences of this decision?

And second question, Madame Secretary, a fairly simple question: According to your sources, did Syria have nuclear equipment or maybe they still have?

FOREIGN MINISTER LIVNI: I think that I will start in answering your first question. Yes, of course, well, it's not a secret that Hamas is a terrorist organization. Hamas took over Gaza Strip and it controls this place, the territory. Clearly, Israel withdrawed from Gaza Strip in order to end the Israeli occupation in Gaza Strip and in order to reduce the responsibility of Israel on the situation in Gaza Strip. But yet unfortunately, even though we hoped while taking our forces out of Gaza Strip that this can be the beginning of the creation of a Palestinian state which I hope will live in peace with Israel, what we got in return are terror attacks, daily terror attacks on Israel, on Sderot, on Israeli citizens.

And our decisions today decide that -- declaring that Gaza Strip is a hostile territory. And the meaning is that even though when it comes to the humanitarian needs we have own responsibility; on the other hand, all the needs which are more than the humanitarian needs will not be supplied by Israel to Gaza Strip.

We do hope that the situation in Gaza Strip will change in the future and also the Palestinians understand that supporting these kind of terrorists are not going to help them.

SECRETARY RICE: As to your question to me, I'm not going to comment on any specific reports. I'll just note that the United States has been, under President Bush, extremely active in fighting the scourge of proliferation of weapons of mass destruction in general. The President has made very clear that he intends to work with the international community actively to prevent the world's most dangerous weapons from ending up in dangerous hands.

And as a result, we have a Proliferation Security Initiative, for instance, which helps us to track and in some cases intercept dangerous cargos. We have worked very actively with our friends and allies to get strong language on proliferation in various United Nations and IAEA documents. And finally, we have worked very actively to undermine networks. And indeed the wrapping up of the A.Q. Khan network, which was a black market way to transfer nuclear materials, nuclear equipment to states, rogue states, was probably one of the great victories for proliferation -- for the anti-proliferation efforts. So we're making very great efforts but I won't comment on specific cases.

MODERATOR: Associated Press.

QUESTION: Question for both of you. Do you think that the enemy entity designation is a legitimate treatment of civilians under international law?

And for Secretary Rice, first, is this an action that the United States supports? And second, do you have any concerns that it will lower the confidence among Palestinians and Arabs that Israel will bargain in good faith as you move toward your peace conference?

SECRETARY RICE: Well, looking forward, it is my very strong view that Israel and the Palestinians are showing their good faith in the discussions that they're having, discussions that are getting ever broader and deeper at the level of the Prime Minister and President Abbas and that indeed now have spurred the two sides to create negotiating teams that are to try and memorialize those understandings so that the creation of the Palestinian state can move forward.

It's no secret that the United States declares Hamas a terrorist organization and that we've been troubled by the fact that Hamas did what they did in the Gaza against legitimate Palestinian institutions, against legitimate institutions of the Palestinian Authority. And we have been very concerned that two things be understood, and we've talked about this and I think we have the same view in this regard. One is that we will not abandon the innocent Palestinians in Gaza, and indeed will make every effort to deal with their humanitarian needs. And secondly, that Gaza and the West Bank are both constituent entities of the to-be Palestinian state. And so that is not to say that Gaza is to be separated off somehow and treated as if it is (inaudible) the legitimate government of Gaza is ultimately that of the Palestinian Authority. But Hamas is indeed a hostile entity. It's a hostile entity to the United States as well.

FOREIGN MINISTER LIVNI: Okay, the short answer to your question is, yes, we made this decision according also to our legal advisors, so it is according to the international law and it's not going to affect the humanitarian needs of the population in Gaza Strip, as I stated before.

But I would like also to express the need to give a very complicated answer to a complicated situation on the ground. And our policy tries to give an answer to a distinction which happens now in the Palestinian Authority -- between the need to make a distinction between the moderates -- between Abu Mazen, Salam Fayyad, the government which meets the requirements of the international community -- and this ongoing dialogue is of utmost importance. And, of course, Israel makes its dialogue in good faith because it is our own interest, the creation of a future Palestinian state. We believe in two-state solution. We believe in the need to live in peace in the region. And we are willing, as was stated before, to take also some -- or to compromise on several issues. But of course any negotiations need to address the crucial or the vital interests of both sides, also Israel's security. As we understand it, the creation of the Palestinian state is in Israeli interest as to support the future Palestinian state's economy is part of our interest. We expect the Palestinians to understand that Israel's security is also part of the own interest.

So basically, this is part of the ongoing dialogue between Olmert and Abu Mazen and only a few days ago, there are new teams that are going to try and find the common ground. And I hope that we can reach this common ground. It's not easy; it's complicated.

On the other side, we need to give an answer to daily attacks on Israel coming from Gaza Strip. And the distinction between the moderates and the extremists in the Palestinian side is being translated also in terms of territories. So there is no consideration of policy of Israel to divide the West Bank and Gaza Strip, I can assure you. But on the other hand, we need to take two different policies toward the situation to meet the challenge, the security challenge, the threats coming from Gaza Strip and our need to promote a process with the moderates.

QUESTION: Madame Secretary, does the United States support the designation?

SECRETARY RICE: I've given my answer, Anne.

MODERATOR: Israel Radio.

QUESTION: I'd like to -- this question to Secretary Rice. I would like to hear, please, your comment on the things that Bernard Kouchner, Foreign Secretary of France, said that the war against Iran may be inevitable.

SECRETARY RICE: The President has said -- President Bush -- that the United States is committed to a diplomatic track because we believe a diplomatic track will work. The President of the United States also never takes any of his options off the table.

Now, why will the diplomatic track work? It will work if there is -- why might it work? If there is international unity, which we've been able to achieve in two Security Council resolutions that have been unanimous Chapter 7 resolutions. If there is resoluteness in the international community to do even more, so that – I’ve been very pleased to see that a number of private entities are making decisions about investment in Iran, I think on the basis of investment and reputational risk. Private banks have left Iran. A number of companies are not going to deal with Iran. And I think it is extremely important that governments signal, as Germany did with the cutting of their export credits, as the French are now doing, that it is not business as usual with a state that is seeking the technologies that could lead to a nuclear weapon and whose President has said the most awful things about another member of the United Nations, speaking of wiping Israel off the map. So it can't be business as usual with Iran.

But our view is that the diplomatic track can work. It has to have both a way for Iran to pursue a peaceful resolution of this issue and it has to have teeth. And the UN Security Council and other measures are providing teeth.

MODERATOR: New York Times. Could you wait for the microphone? Just one second.

QUESTION: Foreign Minister Livni, the United States has said that it wants this upcoming Middle East conference to address critical issues. Saudi Arabia has said that it won't attend unless final status issues are addressed. Is Israel prepared to discuss the status of Jerusalem, the fate of Palestinian refugees and the borders of an eventual Palestinian state?

And for Secretary Rice, why have you not yet endorsed the idea of inviting Damascus to the conference?

FOREIGN MINISTER LIVNI: Okay. As I said before, our own interest is to reach an agreement between Israel and the Palestinians. It's not because of the international process -- international pressure, but this is our own interest and our own need.

But it is very important to you find what is the common denominator, whether there are common grounds that we can agree upon in these kind of sensitive issues. And this is part of the dialogue between Olmert -- or this was part of the dialogue between Olmert and Abu Mazen, and we need to find out whether we can bridge the gaps on certain issues which are more sensitive. And the idea is that we would like to see this international meeting a success and we would like to find out what are the common grounds that -- and whether there are things that we cannot bridge the gap when it comes to Israeli interests and Palestinian interests. So we should find out what is the best way to bridge this gap maybe in the future. But basically, this is part of -- we are trying to find out what are the common grounds on most of the issues, I believe.

SECRETARY RICE: We haven't invited anyone yet. (Laughter.) It’s true.

QUESTION: So are you prepared to invite Damascus?

SECRETARY RICE: Helene, we haven't invited anyone yet. So I'm not going to address the issue of participation until we address the issue of participation.

FOREIGN MINISTER LIVNI: I mean, basically, not talking about invitations, of course -- no, but basically, it's important to understand because I know that there are certain expectations and high expectations and I believe in realistic expectations.

And it's not -- you know, it's not a secret that there are certain issues which are more sensitive and more -- and they're part, maybe, of the hard core for the conflict. And of course, we would like to end the conflict the next day, but it's not less important to find the best way to do it in the wise and clever way, in the most delicate situation. While, as I said before, there is also a gap between part of -- maybe the willingness of the other side, of both sides, and the ability to translate it into an understanding and then to translate it into actions on the ground.

MODERATOR: And I'm afraid that's all we have time for.

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