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QUESTION: I wonder whether you had found any information on the P-5+1 meeting yet, if --

MR. MCCORMACK: We did. We found somebody who had talked to the --

QUESTION: You did?

MR. MCCORMACK: -- traveling party and it was as I described it, that they -- what, excuse me?

QUESTION: (Inaudible).

MR. MCCORMACK: Yes, he's on his way back. They had a good discussion about Mr. Solana's upcoming meeting with Mr. Larijani regarding the -- Iran's decision as to whether or not to take up the offer for negotiations or to realize the negotiations, they must suspend all their enrichment and reprocessing-related activities. The focus of the discussions in Berlin were really on how we could present the existing materials, the existing offer, the existing choice of the two pathways to the Iranians. Our hope is that of course, the Iranians would choose to take us up on this offer. They have not done so yet. We're going to do everything that we can as a P-5+1 to encourage them to take us up on that offer. So it was in a sense of how do you present this, once again, to the Iranians; it wasn't a discussion in any way, shape or form walking back from the principle of the need for Iran to suspend enrichment-related activities in order to realize those negotiations. That -- on that matter, everybody is firm and committed.

QUESTION: So what are you --

QUESTION: But just to follow on, because this morning, I don't know whether I understood you correctly, but Nick Burns was saying on his travels that if they agree to suspension, then sanctions will be suspended. And if I understood you correctly this morning, you said that if they agreed to suspend enrichment, then you would curb any further action in the Security Council --

MR. MCCORMACK: Right.

QUESTION: -- and not suspend current sanctions. Did I understand that correctly?

MR. MCCORMACK: That's correct. Yeah, the idea is that it's -- if you do get to this point and let's all hope that we have the opportunity to put this to the test, that the Iranians would suspend their enrichment-related activity, their reprocessing-related activity, and in return, they realize a couple things.

One, negotiations; they realize negotiations about how they can have peaceful nuclear energy while giving the international system objective guarantees that they're not going to try to divert the technology materials or know-how to a nuclear weapons program. They can also discuss any other matters with any other members of the P-5+1 that they wish to discuss with us. The agenda would be open.

The other thing that they could realize is that during this period of time while their suspension is ongoing and while the negotiations are ongoing, there wouldn't be any further action in the Security Council on additional sanctions. The existing sanctions would, certainly at the initiation of those negotiations, remain in place. It would require another act or step by the Security Council in order to revoke any or all of those existing sanctions.

QUESTION: But would you put in place the action that would be needed to get the Security Council to revoke those sanctions if they agreed to suspension?

MR. MCCORMACK: That's -- that would -- that is not part of any sort of understanding, certainly at the beginning of any discussions. I can't speak to if you ever got into discussions and that there were some positive results from those discussions that there wouldn't be talk of, well, how do you walk back the existing sanctions. That is not a going in proposition, however. The proposition is that if there's suspension on the part of the Iranians, there is suspension of further action in the Security Council on the part of P-5+1 and the Security Council.

QUESTION: So is Nick speaking out of turn then when he said that they --

MR. MCCORMACK: I didn't see exactly what he said, but this is --

QUESTION: There seem to be conflicting signals coming from you and from him.

MR. MCCORMACK: I -- you know, I did not see what he said, but I can tell you that that is what -- that is where we stand right now.

QUESTION: Sean.

QUESTION: Can you discuss what you mean by present the existing offer? I mean, this offer is a year old. Solana has met with Larijani and the Iranians several times. Is this kind of repackaging of the offer or like old wine in a new bottle or something like that or are you looking for new ways to get the Iranians to accept the offer? I mean, obviously, the idea of suspension still stands.

MR. MCCORMACK: Right.

QUESTION: But within that, taking that as a given, are you -- what are you looking for? What could you possibly offer to the Iranians to make this offer more enticing for them to accept it this time?

MR. MCCORMACK: Perhaps the way you present it, the way that you emphasize when you talk to them, the hope is that they'll come around and that the hope is that perhaps over time as there are additional costs to their defiance of the international system that they make a different calculation.

You know, what we're looking for are the reasonable people in the Iranian leadership who can do that cost benefit analysis and say, hey, look, not only are there real costs to what we're doing here in terms of existing trade, there are opportunity costs for trade and investment that's not going to happen because of our behavior. So it's our hope that you keep trying and that maybe as we maintain the diplomatic pressure and then perhaps if they continue in this defiance, increase the diplomatic pressure, that at one of these meetings, they are going to say we have done the cost benefit analysis, let's find a way in order to get back -- get to the negotiating table.

QUESTION: But beyond doing that, I mean, is there some sort of discussion about some kind of formula where the Iranians, like some face-saving gesture or something -- there's been talk in the past about, you know, a definite period of suspension and things like that? I mean, are you in discussion about ways to make the offer acceptable to the Iranians that both can say that they won here?

MR. MCCORMACK: Well, that's the --

QUESTION: Beyond just wearing them down.

MR. MCCORMACK: -- that's part of diplomacy, let somebody else have (inaudible) way. So we'll see. You know, Mr. Solana has obviously latitude to listen to what the Iranians have to say. He is in power to meet with them. He is in power to present to them the P-5+1 proposals. He is obviously empowered to listen to what they have to say and then report back to the group. And one would hope that he hears something different in a positive sense, that they're ready to entertain this idea of suspending their enrichment program in order to get into negotiations. And we all hope that that is -- that's the case.

QUESTION: So is it a question of how to present the existing offer or who to present the existing offer to?

MR. MCCORMACK: My sense is, Matt, the how -- what it is -- what do we emphasize, what do we highlight for them. How can we convince them to say this is a good deal, take it?

QUESTION: (Inaudible)? I mean, it sounds like it.

MR. MCCORMACK: Well, I can't tell you the calculations right now. But certainly, they are continuing down the road of building centrifuges, putting the cascades together. You can talk to the IAEA about exactly what their activities are, but there have been reports about testing at least small amounts of UF6 in their centrifuges. So they are continuing along with their program, which is why, unfortunately, we find ourselves in the position that we do; that there's this continued diplomatic pressure on them, there's increasing isolation of the Iranian regime from the rest of the world, and the prospect of more isolation and more steps in the Security Council.

Yeah.

QUESTION: You have been -- you spoke about the reasonable people and you have been counting on divisions within the regime for a month now, and it doesn't give any results. So don't you think now it's time to try to find another strategy or --

MR. MCCORMACK: No, we think that this is, at this time, the proper course to follow, that if you look back, we only started down the pathway of sanctions a relatively short period of time ago, when you look at the extended timeline that this issue has been dealt with by members of the international system, whether that's the P-5+1 or earlier than that, the EU-3 negotiating with the Iranians. So it's really a relatively short period of time in which the Iranians are -- have been sort of stunned by the reaction of the international system; two unanimous Security Council resolutions, a big vote in the IAEA Board of Governors. And I think that's been a bit of a surprise to them.

Certainly they do -- you can look at their diplomatic activities in the run-up to the Security Council votes and yeah, they are looking for divisions in the international system. They're trying to exploit differences of opinion, differences in tactical approaches, all of those sorts of things. Thus far, they've been unable to do that. What we hope is that they finally get the message that the international system is not going to become less united; it's actually becoming more united in the demand that Iran give up this pathway to a nuclear weapons program and they come to the negotiating table.

So perhaps when the reasonables in Iran make that calculation that put -- you know, the chances are that we are going to find ourselves only more isolated in the international system, that there are only going to be more states who are adding their names to these resolutions in this condemnation, and that -- look at the costs that are mounting for our country and our future and say, "It's not worth it."

And so that's what we're hoping on. That's the strategy. We've talked about it and we believe that this time, it's the right strategy. And one would hope that reasonable people in the Iranian leadership would see that and would make that calculation; that they would see the trend lines and it's not a positive one for Iran.

QUESTION: Yes, but divisions among the Iranians seems to bring only immobilism and no movement to what you wish.

MR. MCCORMACK: Well, the -- we certainly can see, in public, evidence of the fact that the Iranian regime is not monolithic, that there are differences of opinion, that there are -- that there is a debate within their system about what pathway to follow. Our experience is it takes some time for this leadership and this regime leadership to come to a consensus decision. It's not a -- just judging from the outputs, a regime that will -- that typically is able to react quickly to changes in circumstances in the international system. It takes them a while to sort through whatever differences of opinion might exist within the leadership.

So I say all that with the thought in mind that it -- going back to the other point I made, it has been relatively a brief period of time that we have been in this phase of the diplomacy where you have sanction -- a number of different sanctions following on one another.

QUESTION: You're not concerned, Sean, that your attempt to find differences in there and the reasonable people and the Iranian people as having the exact -- exactly the opposite effect? That in fact, couldn't it be -- are you worried that you're trying to do what -- to them what they're trying to do to the international community and trying to find divisions and splits and the international community has just gotten more solid as -- what you say? And that you trying to do that to them is having the same result?

MR. MCCORMACK: Well, let me try to be a little bit more precise. We're not -- in taking the steps that we're taking, we're not targeting a specific named set of individuals within the Iranian regime. I can't tell -- I couldn't tell you who the --

QUESTION: Maybe not, but you're telling me the reasonable --

MR. MCCORMACK: Right, who the reasonables are and this is just -- what we're trying to appeal to them is on the basis of their national interest and do the simple cost benefit analysis. They are capable of doing that, quite clearly. So we're just -- we're trying to appeal to those people who -- within the regime and there are other evidences -- there's other evidence that people can make these calculations. If you look, for example, in their -- the steps that they've taken to encourage investment in their oil and gas sector, clearly, they understand how to do cost benefit analysis. So what we're trying to do is appeal to them on the basis of their national interests, just that cold, hard calculation of cost benefit.

Look, this is -- this not only costs you in the current time, but it's going to cost you a lot in the future. And you make a point about, "Well, doesn't this just harden the reaction of the regime?" Well, that's one of the reasons why we are also reaching out to the Iranian people, not only because we think it's good in and of itself, but to emphasize to them that this is not a dispute with the Iranian people. The international system, the P-5+1, the United States does not have a dispute or difference with the Iranian people. In fact, we -- our consistent message from the start of this has been that we don't wish to cause any hardship, do any harm to the Iranian people. The message has been that you have a leadership now that is taking you down a pathway which the Iranian people have expressed in a number of different forms they don't want to go down.

And we would hope that that leadership would change its mind. That's what we're trying to appeal. So yeah, we are trying to, in a sense, talk to the Iranian people and the Iranian leadership in a number of different levels.

QUESTION: But Sean, on the whole idea of reasonables, I mean --

MR. MCCORMACK: Right.

QUESTION: It seems as if while -- as the Secretary talks about the difference between strategy and tactics, I mean, this particular regime may have different tactics and -- you know, Ahmadi-Nejad may have more rhetoric than other administrations, but it doesn't seem that any Iranian Government is against some kind of nuclear program. And you say that there are -- you know, you're appealing for the reasonables, but it seems as if the country is pretty much of one mind, that they have a right to a nuclear program.

MR. MCCORMACK: They have a right to a peaceful nuclear program. We don't dispute that.

QUESTION: (Inaudible.)

MR. MCCORMACK: A peaceful nuclear program? No, I don't -- at least not since Secretary Rice has been -- that Secretary (inaudible). So yeah, we have no dispute. We, in fact, want to find a way for them to have peaceful nuclear energy -- now and again, this is a society that has vast hydrocarbon reserves, but they say that because of their growth and looking out over the horizon, that they have great future energy needs.

Okay, we understand that argument as an international system. So let's talk about how you can have a peaceful nuclear energy program. There's no dispute about their right to a peaceful nuclear energy program. That is not in question. The question is because of Iranian behavior, the international system doesn't believe this leadership when it says, well, this is just a peaceful nuclear energy program. The facts, the experience of the past several years, point to the fact that they are developing a nuclear weapons program under the cover of this peaceful nuclear energy program.

QUESTION: That's even before Ahmadi-Nejad, though. I mean, I don't understand what reasonables you're looking for. It seems as if while some people might not like the way that Ahmadi-Nejad is going about this in Iran, everybody is pretty much in agreement. I mean, I don't understand who is more reasonable than the next on the nuclear program. That's the one thing that they all seem to agree on.

MR. MCCORMACK: I would just point out that they have suspended their enrichment-related activities previously when they were talking to the Europeans. So they are capable of doing it.

Yeah.

QUESTION: Yeah, just one thing. When you're looking at how to present this -- the proposal to the Iranians, are you looking at sort of bringing up and making more important the risk of incremental sanctions if they don't comply? Is that one of the ways in which you're looking at how to present it? And are you going to include any new incentives? And secondly, Russia, for example, is not crazy about the idea of a third round of sanctions.

MR. MCCORMACK: Well, Mr. Solana has latitude in terms of how he presents this to the Iranians. So in a sense, the answer to your question is it depends a little bit on the situation, (inaudible) atmospherics and how he judges the situation there. I'm not aware of any additional incentives that are being contemplated at this point. It's actually a pretty good package that's been out there. And the second part of your --

QUESTION: It was on Russia. Russia's --

MR. MCCORMACK: Russia. Oh, right. Yeah, yeah, yeah. We want to talk to the Russians. I expect that when Secretary Rice goes out to Moscow, leaving Sunday night, talking about Iran and next steps is going to be, you know, high up on the list. We want to work cooperatively on this. We worked very well on the last round of sanctions, the last Security Council resolution that we had a very good process in which there was good private consultation with the Russians -- the Russian leadership. We want to replicate that process and talk about what the next moves are tactically. And we're absolutely going to take onboard the Russian point of view. They have shaped this approach as much as any country within the P-5+1. So a great deal of respect for their views.

We've talked about in the past that sometimes they have a different tactical view, we're going to take into account what they have to say, but it is important that the Iranian regime understand quite clearly that they will not be allowed to develop a nuclear weapon. I think the Russian Government would agree with that statement, as would other members of the Security Council. So we're going to have a good consultation during the Secretary's trip to Moscow. (Inaudible) beyond Iran; it's not going to be the only thing they talk about. And we're also going to be talking to other members of the Security Council and P-5+1.

QUESTION: Do you think there's a P-5+1 ministerial in the near future?

MR. MCCORMACK: We'll see. If they need to get together, I'm sure that they will.

QUESTION: No plans right now, though?

MR. MCCORMACK: At the moment, there's not anything on the schedule.

Yes.

QUESTION: Still kind of related around -- what do you make of the trip by the North Korean Vice Foreign Minister to run at a time when both countries are being isolated by the international community for their nuclear ambitions?

MR. MCCORMACK: Well, you seek out friends where you can find them. I -- you know, I can't tell you. They have a history of cooperation at a variety of different levels, as well as the transfer of missile technology. There is now a qualitatively different situation than when that cooperation had previously taken place, at least what has been publicly reported and that you have, on both Iran and North Korea, separately, Security Council resolutions which place some real restrictions upon the transfer of that kind of technology and the commerce in those kind of technologies and materials. So of course we would expect that any interaction would comply with Security Council resolutions. As for any sort of political motivations in doing this, I -- you know, I certainly can't get in the -- inside the decision-making loop of either of those regimes.

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