... MR. SMITH: The President said, about this secret facility that's been uncovered in Iran, that it is inconsistent with a peaceful nuclear program. What does the United States think this secret facility is for?

SECRETARY CLINTON: Well, we believe that it is a covert facility designed for the Iranian enrichment. It has not been disclosed, and therefore, it raises additional suspicions about the Iranian intent regarding their nuclear program and this week we had several very important developments. First, we had, in this room, a bilateral meeting with President Medvedev and President Obama. And in a very small setting where -- I was there -- the President talked with great specificity with President Medvedev about the dual track that we are on regarding the Iranian nuclear program, and the upcoming meeting on October 1st and opened the discussion about the information that we had concerning this facility.

MR. SMITH: So he told President Medvedev?

SECRETARY CLINTON: Yes, yes. And what we -- also saw happen later that day was an agreement by all the members of the so-called P5 + 1: the United States, Germany, France, the United Kingdom, Russia, and China, all in agreement, saying that we expected answers from Iran in the October 1st meeting, and that we are working on what's called a dual track.

We are pursuing the answers. We have made it clear to Iran that they have a right to peaceful nuclear energy for civilian purposes under appropriate safeguards and monitoring, but not to a nuclear weapons program. And if we don't get the answers that we are expecting, and the changes in behavior that we are looking for, then we will work with our partners to move for sanctions.

MR. SMITH: You talked this summer about if -- if diplomacy failed, you called the sanctions "crippling sanctions" would be in order. What would those be?

SECRETARY CLINTON: Well, Harry, we're exploring how you broaden and deepen sanctions. Now, sanctions are already in place. But, like many sanction regimes, they're leaky. But in the last eight months since we've been dealing with North Korea on a similar set of issues, we have forged an international consensus around very tough sanctions and that's given us some additional information about how to proceed on the Iranian front.

But this is a very serious matter. The Russians have come out with a strong statement, saying that the burden has now shifted. It has shifted to Iran. They have to come to this meeting on October 1st and present convincing evidence as to the purpose of their nuclear program. We don't believe that they can present convincing evidence that it's only for peaceful purposes. But we are going to put them to the test on October 1st.

MR. SMITH: They have managed to hide a nuclear weapons development system for almost 20 years. Do you suspect that this is for other peaceful purposes because they have insisted for the last half dozen years or so that the only reason that they are interested in enriching uranium is for nuclear power, for electricity?

SECRETARY CLINTON: Well, it certainly is hard to accept that at face value. This latest incident concerning the facility at Qum, it would have been disclosed were it for peaceful purposes. There would have already been IAEA inspections.

We have been following this for several years, in cooperation with some of our international partners, watching and assessing what the Iranians were doing. And then, when this became known -- actually, through the Iranians, beginning to provide some information about it -- we disclosed the fact and gave the information we had to the International Atomic Energy Agency.

So, I guess one has to ask, if it's for peaceful purposes, why was it not public? Why was the fact of it not generally known, instead of through our working with partners to discover it --

MR. SMITH: Because the IAEA guidelines basically dictate that if you're even going to do anything like this you have to send us your plans --

SECRETARY CLINTON: That's right. That is exactly right. And of course, as you point out rightly, there have been many other actions along the way that raise similar doubts.

Now, the Iranians keep insisting, "No, no, this is just for peaceful purposes." Well, I think. as the Russians said in their statement, and as we believe, and what this meeting on October 1st is to test is "Fine. Prove it. Don't assert it, prove it." And we are looking to see what they have to say.

MR. SMITH: You keep talking about the Russians, and it's interesting, because President Medvedev almost did cartwheels once the President announced that the radar shields were not to be constructed in the Czech Republic and the missile systems weren't to be constructed in Poland.

Do you really have -- is Russia really in tune with the United States on this? Because they have made verbal statements in the past, and then when it comes time to have the rubber meet the road, so to speak, they haven't been there. Will they really be there this time?

SECRETARY CLINTON: I think Russia has begun to see many more indications that Iran is engaging in threatening behavior. Certainly these last incidents seem to confirm that. And, finally, the Russians were very supportive of our sanctions against North Korea. President Medvedev said in this room that sanctions may not be preferable, but they may be inevitable.

So, I think this is what diplomacy and engagement is about. We are doing what we think is right for the United States. The missile defense decision, the Iranian process, this is in the interest of our people, our security, our safety, and our friends' and allies'. But we also believe that, in working closely with Russia, sharing information, that they have been quite helpful this past week.

MR. SMITH: Is there anything the Iranians can do in this meeting on October 1st to dissuade you from what you believe they're up to? What can they say in this meeting to say, "All we're trying to do is make electricity."

SECRETARY CLINTON: Well, they can't say anything, because they've said that for years. But they can open up their entire system to the kind of extensive investigation that the facts call for.

MR. SMITH: Is that the only thing the U.S. and the other nations that will be there, is that the only thing that you'll be satisfied with? If they completely open the doors?

SECRETARY CLINTON: Well, we have to be satisfied. And there may be other approaches short of that. But, you know, I think it's really essential that we satisfy ourselves and the international community, which has passed numerous resolutions against Iran's program, pointing out that they are violating UN and IAEA obligations and the Non-Proliferation Treaty. So words are not enough. They are going to have to come and demonstrate clearly to the international community what they're up to.

MR. SMITH: Finally, in a region, in a nation that has known some instability over the last couple of months, what do you think this means in light of that as a backdrop?

SECRETARY CLINTON: Well, Harry, that's a really important question, because we know that there has been instability. It's not just what we see on the television screen but what is reported to us. But we are dealing with the government that is there. We encourage the free expression of ideas and political choices, but this nuclear program really is the core of our concern right now. And we are very urgently pursuing the engagement strategy that the President talked about while simultaneously working to get the kind of very tough sanctions that may well have to be imposed.

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