MR. BAILY: Thank you all for coming this morning. As you know, we'll be on the record with Ambassador Jim Jeffrey, who is the Principal Deputy Assistant Secretary for Near Eastern Affairs, and he will be discussing today the U.S. policy towards Iran. I think Jim will open with a couple of general comments and then be happy to take your questions. Jim, thank you.

AMBASSADOR JEFFREY: Thank you, Jess. Iran is a very, very significant problem for the United States and for the international community and for the people of the region, and for that matter, at least in terms of the Iranian regime and for its own people. At the top of our agenda with Iran is, of course, the nuclear portfolio, but that's not the only issue. There are the others that you're all well aware of, the terrorism account, the unsavory efforts throughout the region with Hamas, with Hezbollah, with Syria, in Lebanon through Hezbollah, in Iraq, and a general policy of intimidating Gulf countries, Iran's rejection of Israel and the peace process, Iran's own human rights violations, and it's own campaign against pluralism in Iran, which unfortunately is growing under Ahmadi-Nejad.

While these are the problems longstanding, there is a particular problem with the current government under President Ahmadi-Nejad that requires very close attention by all of us. The U.S. is not seeking regime change, what we're seeking is a change in behavior across the board and the path to seeking this change is multilateral action primarily in the UN with the -- what we call the P-5+1, one being Germany, but also through international efforts such as that at the UN that produced 1701 for Lebanon and multilateral actions -- interactions with the countries of the region on the peace process between Israel and the Palestinians and in several other fields. We have a variety of bilateral sanctions that we're trying to gain more international support for to deter Iran for -- and pursuing the path of nuclear weapons. And we also have a variety of steps that we're taking with our friends and allies in the region to strengthen their defense against a growing Iranian military threat.

So it's a very broad agenda. It's a very troubling one coming at a time of considerable turmoil in the Middle East. Despite the challenges of the other competing priorities, we think that Iran is at the top of the list. Thank you.

MR. BAILY: If you would state your name and organization, and please speak into the mikes. I know it's a little clunky, but that way we'll get it on the transcript.

QUESTION: Hi. My name is Parichehr Farzam from Radio Farda.

MR. BAILY: Go ahead, ma'am.

QUESTION: Mr. Jeffrey, it seems that Britain has started the process of rapprochement with Iran, Syria and Saudi Arabia over the issue in Iraq. To what extent is U.S. ready to go to meet with Iranians over this issue?

AMBASSADOR JEFFREY: You said Britain?

QUESTION: Britain, Saudi Arabia. It seems that they start to do --

AMBASSADOR JEFFREY: Yeah, I mean, I can't comment on what the British may or may not propose in the future. I think that as the White House Chief of Staff Mr. Bolton said yesterday, we are open to new ideas in the Middle East. With particular reference to Iraq where Iran plays a very significant role, I have to say that we have several times attempted to meet with the Iranians on Iraq. And for various reasons, often problems with the Iranian perception of this, they did not take place. We have offered to sit down with the Iranians to talk about the nuclear issue conditioned by a suspension of enrichment. They have not responded to that offer although Mr. Solana spent months trying to further it.

And this has been a consistent Iranian response to us for a long time. It's somewhat like the North Korean situation, although I'm not an expert there. But throughout, for example, the Clinton Administration, we had a standing offer to discuss with the Iranians without any preconditions and we were told this wasn't adequate. So the question comes, you know, even if the United States were to decide to once again put a high priority on talking to Iran, would the Iranians respond and would these talks lead to anything?

QUESTION: Thank you.

MR. BAILY: Yes. Get the mike, please.

QUESTION: Thank you very much. My name is Ibrahim Bidarva from Persian Service of VOA. In today's meeting between President Bush and Prime Minister Olmert, Iran's controversial nuclear program is at the top of the agenda. Since it's less than a week after the election, this visit is taking and already Robert Gates, nominee for Defense Secretary, said sanction against Iran has not been in the interest of the United States of America. Congress is starting January going to be controlled by Democrats and other developments. What do you think, Mr. Ambassador, about the American policy in the future, starting in January? Is Israel worried to see a change in American policy towards Iran?

AMBASSADOR JEFFREY: That's about six different questions and three or four comments, several of which I don't agree with, so I'm going to give a scattershot approach to the set of questions.

First of all, I don't think Mr. Gates -- but I could be wrong, but I just went through the 2004 Council on Foreign Relations Report -- I don't think Mr. Gates has said that sanctions don't work. I think Mr. Gates proposed that the United States look for ways to engage Iran, which of course is exactly what we have done since. And the Secretary of State twice, before the Senate Foreign Relations Committee on Iraq and before the press and me on the nuclear issue, raised the willingness to sit down and speak with the Iranians. So I think that we have responded in part to much of that report long before we knew that Gates was going to become the Secretary of Defense.

I think in terms of what will happen in January, I think we should wait till January. I think January is quite a ways away. I would make a comment that it would be -- regardless of how you interpret Iraq in the election and the congressional makeup vis-a-vis Iraq, I would be very cautious about extending that to the question of Israel in general.

And thirdly, it is absolutely proper and fitting that Prime Minister Olmert, a good friend of the United States and we think a good friend of international stability, is here to talk about a country which has threatened to destroy Israel, wipe it off the face of the earth and is busily working on long-range missiles and nuclear weapons. That is an appropriate theme. It would be quite incomprehensible if Mr. Olmert did not want to talk about the existential threat to his country raised by Iran, particularly under this leadership, following these policies.

Thanks.

QUESTION: I'm Joyce Karam with Al Hayat Newspaper. Thanks for speaking to us. If the Iranians agree now to sit on the table with the U.S. on Iraq, do you see that happening soon?

AMBASSADOR JEFFREY: We'd have to see, as we've seen before, what the circumstances are of their wanting to sit down with us, who they would want at the table, where they would want to do this and such. But you know, they make offers in general terms in newspapers, but we will see.

MR. BAILEY: Christian.

QUESTION: [Christian Wernicke, with Sueddeutsche Zeitung] Ambassador, you mentioned in your introduction that the U.S. is not seeking a regime change, what we are seeking is a change in behavior. Is that totally in line with all parts of the government or even Congress legislation, which kind of asked -- not by military means, but by political and diplomatic and communication means -- to change the mullah regime in Iran?

AMBASSADOR JEFFREY: I would have to know the specific piece of legislation you're referring to. The --

QUESTION: Especially in the House. I mean --

AMBASSADOR JEFFREY: But once again, there are certainly voices. You know, I mean, America is, like many other societies including your own, a very pluralistic place.

The last legislation, the renewal of what we call the ILSA legislation against Iran and Libya, only this time Libya was dropped off thus we can't call it ILSA anymore -- I think we can call it ISA -- certainly did not go as far in calling for a change in regime as the -- what was it, the Iraq Liberation Act of 1998? I would say -- I would cite that as a good example of regime change legislation. I don't see the same thing.

In fact, the ISA legislation was quite remarkable. While it urged the promotion of democracy in Iran, it was very, very careful in stating explicitly that this is not to be done by military force. And I mean, as one who has worked with European Union diplomats extensively in the Balkans, in a way we were looking for what amounts to regime change or deep-seated changes in both institutions and behaviors and policies that amount to something approaching regime change. Part of the European Union accession process is something that I would consider regime change. So I think that part of the concern about regime change and the fact that I mentioned it is tied to this idea of regime change through lightning* military strikes.

MR. BAILY: Munir.

QUESTION: Munir Mawari, I am with Asharq Al-Awsat daily newspaper. The President's trip to Asia, in his trip is he going to discuss the issue of Iran with the U.S. friends over there?

AMBASSADOR JEFFREY: I am certain that the President will discuss Iran and North Korea on this trip because these issues are much on his mind. He may discuss other Middle Eastern issues as well. But I'm sure that he will discuss Iran and also the North Korean issue because these are threats to the people of that region as well as to us.

QUESTION: Yeah. I have a question to follow up with the first question about Olmert. We heard him saying on NBC Today that he is not in Washington to seek U.S. protection for Israel. Is there any comment about this?

AMBASSADOR JEFFREY: I would take him at his word.

MODERATOR: Samir.

QUESTION: [Samir Nader with Radio Sawa] Mr. Ambassador, can you update us on what's going on at the Security Council and when do you expect the resolution? And who -- are the Russians going along or --

AMBASSADOR JEFFREY: There'll be another meeting today. We believe that we are making progress in the last week on this. We have a unified position with the Europeans. We have had a number of contacts at a number of levels with the Russians in particular in the last week. And I don't want to use the word "optimistic." It is not a word that is easily defined. I would say that -- nor would I put a time limit on this, but I would say that many of the reports that I've seen about a flagging effort and that kind of thing, I would say is not what we are seeing from those who are actually doing it.

QUESTION: Do we expect one before the end of the year?

AMBASSADOR JEFFREY: I would say, you know, we should expect it will happen sooner or later. You know, this has been a slow process since the end of May. But it has been a process that has moved steadily forward with one resolution back on the 31st of July and I'm convinced we're going to see another resolution. Now what's going to be in there in detailed fashion is not yet clear, but I would expect a strong resolution that will focus on basically raising the cost in the missile development area and in the nuclear energy area for the Iranians as long as they pursue enrichment in what we believe is a nuclear weapons program.

QUESTION: A Chapter 7 resolution?

AMBASSADOR JEFFREY: I think Chapter 7 resolution.

QUESTION: Thank you.

MR. BAILY: Philippe.

QUESTION: I'm Philippe Gelie with Le Figaro from France. How do you reconcile the goal of engaging Iran to have them help stabilize Iraq, on the one hand, pressure them to stop the nuclear race in Iran, pursue the freedom agenda which is seen as destabilizing action? I mean, what is the American policy on Iran? I don't see clearly. What are your calls*? What is your mandate at this point?

AMBASSADOR JEFFREY: Well, the goals are, as I said, a deep change in all of the things you mentioned. The question you've asked is: What are the resources that we bring to bear?

QUESTION: And how do you reconcile all those?

AMBASSADOR JEFFREY: If you mean reconcile -- prioritize them. I mean, to me I would say that Norway is a country that does not oppress its people, does not interfere militarily in its neighbors and doesn't pursue nuclear weapons, so these goals of ours are not irreconcilable within a given regime. They may irreconcilable with that particular person. So I think -- yeah, I think that the issue is the priorities in the -- and the question of what clout do we bring to the table.

First of all, we are engaging the international community, particularly on the nuclear issue, and we work very closely with France, Germany, Britain and as closely as we can with the Russians and the Chinese on this. That's an important factor. And I would say it shouldn't be discounted. I interpret the attack that the Iranians just launched on the UN Security Council as an example that this is having an effect. They didn't expect this. They didn't think that we would all hang together. So that's exerting pressure on them.

Same thing with Iraq. The Iranians may want to tweak us in Iraq, but the last thing they can afford is an Iraq that turns badly south on them because chaos in a neighboring state, breakdown in authority, groups looking for different identities and such, is not necessarily a good thing for Iran or for any country on the border, certainly not for Turkey, not for Saudi Arabia, Jordan, Syria, Kuwait, and Iran shares an interest.

Now, there has been a difference, I would say, in recent Iranian pronouncements and activities particularly associated with Ahmadi-Nejad, but I cannot be specific enough to blame him personally. But certainly of late on the issue of Iraq and what we saw earlier, where there was a certain general understanding, they obviously have influence with the Shia, and we obviously have interest with the Shia, but they also have interest with the Kurds as do we. And I think that it is not inconceivable that we can find a mutual interest in Iraq just as we have found one in Afghanistan by and large with some exceptions with them. So I wouldn't rule that out. And as I said, these other objectives are difficult to attain. The question of ways and means is a legitimate one that I can't give you a particularly good answer for, but I don't think they're irreconcilable (inaudible).

QUESTION: May I follow up on that? In Iraq, who needs the other most? I mean, is the United States that needs more the Iranians, or do you think the Iranians need your help equally to avoid this chaos?

AMBASSADOR JEFFREY: I think that the single biggest factor for stability in Iraq by a very considerable margin is the United States. I don't think -- the Iranians are a complicating factor and they very often contribute to instability rather than stability. And I think that they understand that and I think that whether that will have any impact on their behavior and how it will be, whether they will misinterpret our motives for being there and such, that I can't tell you. It's a good question for them. But I think that everybody, including the Iranians and all of the actors in Iraq, understand that the United States is by far the biggest single force for stability at present in that country.

QUESTION: Did you say -- just to clarify, I'm not trying to take it out of turn. You said you do not think they're a complicating factor?

AMBASSADOR JEFFREY: The Iranians are a complicating factor in Iraq. I do not think that they are contributing particularly to stability. They would argue against it and they can cite some things that they have done on the economic area and they do work closely with people with whom we also work closely, such as Mr. Talabani, Mr. Hakim and others.

QUESTION: You mentioned that U.S. is not looking for changing the regime in Iran, just changing the behavior. At the same time, you are looking to having the Chapter 7, the resolution on Chapter 7, Article 41 is considered if that would be necessary using the military force, and that would be some kind of contradiction between this statement and the other which will be on the resolution.

AMBASSADOR JEFFREY: I don't think so because I think under the way that a Chapter 7, Article 41 resolution would be set up, it would be obvious that you would be pursuing a threat to international peace, which is what Article 7 is all about, but that you are pursuing this through political and economic means. And the goal of any resolution is not to change the regime; the goal of the resolution is to change the behavior in the area of nuclear programs. I think that would be very clear in the resolution.

QUESTION: A follow-up? Then you are not looking for Article 41, are you?

AMBASSADOR JEFFREY: We are looking for Article 41, yes.

QUESTION: Oh, you are? Because that would be included.

QUESTION: Deniz Enginsoy, Turkey's Anatolia News Agency. Do you expect Turkey to support bilateral or multilateral sanctions towards Iran? Because it's in fact trying to improve economic relations with Iran and in general what kind of support do you expect from Turkey?

And secondly, isn't it going to be difficult to go after Ahmadi-Nejad after all Democrats have gained power in Congress?

AMBASSADOR JEFFREY: Once again, let me take the second question first. I try really hard not to comment on domestic political issues in the United States, but I would say that as a observer that there was considerable concern in political circles in America about Iraq and about the rate at which we were seeing progress and questions about the progress we were seeing. I would not expand that -- I'm not a journalist, but I would caution you to -- I don't see the evidence that that should be expanded to everything we're doing in the Middle East, including on Iran, including on Israel and such.

In terms of Turkey, first of all, the sanctions that we're contemplating at present are sanctions devoted to a very specific and narrow area, quite different than the sanctions on North Korea at present. And of course we expect Turkey, as a member of the United Nations, to support them and we don't see that as incompatible with a country's economic ties with Iran, which many countries, including those who are working with us in the Security Council on this resolution, do have.

QUESTION: [Ron Baygents with Kuwait News Agency] A couple of things, like two separate questions, and I'll try to be brief. There is often this statement and you made it earlier about -- when you were ticking off your introductory remarks about posing a threat to the Gulf states. And one is can you comment on how they do pose a threat to the Gulf states? And then -- I mean, other than the fact that they developed long-range missiles. I'm talking about political intent more than I am military capability.

And then second question, which is unrelated, is the report that I read of James Baker having dinner with the Ambassador from Iran, the UN Ambassador, and this strong sense of the -- not the U.S. elections so much, but the ascension of Mr. Gates and the idea that there's a lot of buzz in Washington about more diplomatic approach to Iran. Just -- can you just comment on does the Iraq Survey Group provide a vehicle in which we could elevate the idea of diplomacy with Iran in the White House, possibly? More diplomatic efforts in the future?

AMBASSADOR JEFFREY: Yeah, you know --

QUESTION: I know you don't want to say too much, but can you say something?

AMBASSADOR JEFFREY: Yeah, let me try to because I hope to answer about 20 questions from about nine of you. I am at two disadvantages in trying to answer a question like that. The first one is nobody has the slightest idea at the end of this process of making sausage what will emerge from the Baker-Hamilton Commission or what a Secretary of Defense Gates, if the Senate confirms him, will actually advocate or not advocate in 2007, which is a long way from what he did in 2004, before Ahmadi-Nejad and before a whole series of IAEA revelations about the nuclear weapons program that Iran is pursuing. So that's the first problem is one of facts. We don't know where we're going to be in two weeks or two months.

The second problem is, as a government official, you're asking me to get very deep into sort of the psychological, you know, analysis of where the American Administration and where the American people and where the American Congress and individuals players are going to go. I just don't know. I mean, as I said, and I've already said it, the American people evinced considerable concern about the course we are pursuing and its progress and our tactics and perhaps more in the elections. The President has indicated that he will listen to a variety of ideas and that he is open to changes. Which changes, at what cost and such, remains to be seen. I would not expand this unnecessarily too far into the rest of the Middle East or the rest of American foreign policy, but that's just a suggestion.

Now, your first question was on threats to the Gulf. There's a variety. First of all, I think it's simply -- and we've seen a hundred examples of this around the world -- a big regional state with regional claims of hegemony in the case of Iran that go back 3,000 years, for those you Greek classicists, and small states which do not have much military clout and which do not -- are not major security players. You have in several of those states --Kuwait, Bahrain -- Shia minorities who have particularly, and I know the case in Kuwait, have had ties with the Iranians before. That's of concern.

And you simply have a general effort by the Iranians to throw their weight around in a variety of military and political, cultural and religious ways, and that's disturbing to the people in the region, as they're at no loss to tell us whenever we see them and whenever you folks see them.

. . .

QUESTION: Ambassador Jeffrey -- sorry, I didn't introduce myself. Christian Wernicke, Sueddeutsche Zeitung. Coming back to the two questions of my friends, you mentioned the parallel situation when -- in Afghanistan, which leads me to the point that a colleague of yours, or former colleague of yours, Jim Dobbins, is always citing this period, even including 2002, that there's a lot of missed options.

It all boils down to the question that has been raised: How do you weigh the different interests? I mean, if there is -- you like it or not, there is a tradeoff between the nuclear program and security and Iran's help in -- for security in Iraq. So is the -- is the U.S., for example, willing to give in to the Iranian demand or at least consider the Iranian demand for a kind of security guarantee for this regime? That's what they're asking for. They want to have the security that the big power of the world -- and that's your government -- is not interfering there.

AMBASSADOR JEFFREY: If I could shape that into a question as opposed to a debating point, I would say have -- has Iran asked for a security guarantee? I don't really know where they have actually asked for that. A lot of people both here in Washington and Europe assume that that's what they want, but I think that assumption needs to be, you know, questioned until someone comes up with an authoritative statement of the Iranians that that's what they want. I haven't seen it. But you know, maybe I missed it. I've only been doing Iran now since June. But you know, but that doesn't preclude the fact that maybe that's what they want but they haven't said it.

We have said, as part of the dialogue that was placed on the table by Mr. Solana discussions on regional security. That's the most we do. We don't give regimes security guarantees. There are good reasons for that. If a regime is well-behaved, such as Switzerland, it doesn't need a security guarantee. And if a regime is a bad actor, there probably are good reasons why you would not give it a security guarantee, because you would then be basically saying that no matter what it does nothing will happen to it. And we have friends, we have allies, we have interests in the region that we have responsibilities to defend and protect in a variety of ways.

MR. BAILY: Joyce.

QUESTION: I'm going to ask two brief questions really quickly so that others will have a chance. You mentioned Afghanistan. Do you support multilateral table that would include Iran similar to the one that happened in Afghanistan? Yes or no?

And many fear in the region, including in Lebanon, that a dialogue with Iran or Syria would happen at the expense of the freedom and democracy march that we've seen in Lebanon lately. Would a dialogue with either of these countries bring up the issue of Lebanon?

AMBASSADOR JEFFREY: Okay, as I said, you know, the President will look at any suggestion anybody is going to make in this process. We will see a lot of suggestions. But at the present time we haven't taken a policy decision to have a dialogue with anybody that we don't currently have a dialogue with.

In terms of the Lebanese and others, of course, they're nervous. And people are very concerned that in doing this kind of trading off sort of thing that if you start doing that that then very important issues that people have committed themselves to will be ignored and we don't want to ignore these issues. We think that the people of the region want to have a democratic system and that includes Iraq, it includes Afghanistan, it includes Iran, it includes Lebanon, it includes the Palestinians. And to the extent that there are elections, and to one or another degree there are elections in all of these countries (a) it's a good thing, (b) it needs to be further encouraged and (c) we need to ensure that governments are held accountable so that you get good governments. But this is not something that we're prepared to give up.

QUESTION: Oh, boy, this is kind of coming to being around the same sort of thing. (Laughter.) If you could just be the -- not the devil's advocate but whichever other one it is. Assuming that as you say they get a sanctions package at some point -- and we don't know when, two months, three months, whenever -- and then Iran presumably is not pleased with that and then we go into the new year and we have the new defense secretary. What I'm trying to get you to comment on is if you're in the Iranian position and this is what's happening, could you sort of give us -- why would they have an incentive to have a dialogue or negotiate? Would they not disabuse me of the notion that they would be happy to just let the U.S. wallow in their problems in Iraq for a couple more years, kiss the Bush Administration good-bye and take their chances on the next administration, you know? Why would they not do that, please --

AMBASSADOR JEFFREY: Mm-hmm. Sure.

QUESTION: Okay.

AMBASSADOR JEFFREY: Well, first of all, the expectation is that if they do not respond to a Chapter 7 UN resolution, now two Chapter 7 UN resolutions once we get the second one, that there would be further steps, presumably further UN resolutions, further sanctions, if the UN system is to maintain its integrity. And these steps would be, I believe, potentially more painful, along the lines of the current resolution with North Korea.

If I were the Iranians, I would see what is happening with North Korea and I would be worried about that. I would be worried about the fact that that particular resolution includes a ban on military equipment. And if I'm an Iranian that is totally dependent upon foreign military equipment, that's a concern. Again, you know, they can ship more weapons to their out-of-control allies in southern Iraq, but that will simply create more chaos and will not contribute to security and will not contribute to a stable western border. So that's something that they have to think about.

Up to a certain point, I'm willing to believe that a certain amount of chaos may be in their short-term interest, but I do not believe that they -- balance of opinion in Iran is that a chaotic situation in Iraq over the long term is in their interest. And they should consider carefully the alternatives given their past with Iraq.

MR. BAILY: Yes, sir. Speak in the mike, please.

QUESTION: Okay. Mr. Ambassador, back to issue of regime changing. And although you say that it's not part of the American policy toward Iran, if the Iranian people wants to change the regime in Iran, what the United States of America can do without being accused in interfering in Iranian affairs to help the Iranian people in that process?

AMBASSADOR JEFFREY: The United States is a friend of all democratic movements that seek to further pluralistic -- democratic pluralistic solutions. I mean, that's just a general policy. It's what we have been supporting for a very, very long time and we would be willing to do so in Iran but also by means that are transparent, legitimate and well known through support of free elections, monitoring of free elections, through media policies, through educational exchanges and that kind of thing. We would do everything in our power -- again through legitimate, transparent means -- to encourage those forces that are pursuing such an agenda, you know, because (a) we believe it's an important end in and of itself; and secondly, we do believe that democratic countries generally are less willing to threaten their neighbors and become problems in a given region than dictatorial regimes.

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