QUESTION: On Iran, you talk a lot about how Iran cannot be allowed to negotiate while it's still working toward, in your view, building a bomb. But couldn't it also be true that this impasse where essentially the sanctions haven't persuaded them to do anything differently -- in fact, they appear to be accelerating that program -- is -- it's the same thing. I mean, they are working toward nuclear proficiency without the international system being about to apply the brakes.

SECRETARY RICE: Well, I think there would be a very big difference to -- for them working towards nuclear proficiency while the international system thought we had serious negotiations going on and therefore was putting no pressure on them, and having them "work towards nuclear proficiency" while the international system is mobilized against them and might still have an opportunity to persuade them differently.

So one is that they get to continue their work under cover of negotiations in a sense making everyone relax and say, well, perhaps this will work so we won't be as vigilant and we won't press forward on the resolutions and press forward on the financial measures. I think that's an untenable place for the international system to be. That's why suspension for suspension makes sense. If they are -- even if they're continuing to work, and I think there is a question of how much proficiency they've actually gained because this is an engineering problem and you have to keep practicing it, you have to learn to do it over a longer and longer cascades for longer periods of time, introduce more and more nuclear material, and this is a complex process.

But let's say that they're continuing to work toward proficiency. I would rather be in a position in which the international community know that they're doing that in contradiction to the wishes of the international system, that in fact the potential for escalating Security Council resolutions is there, and the collateral effects of Chapter 7 where Iran is clearly not in cooperation and people are making their investment and reputational risks knowing full well that Iran is not in cooperation rather than under the smokescreen of negotiations. So that's the difference.

QUESTION: The Israeli Ambassador said the other day that he thought the worst case scenario would be two years until Iran gets the bomb.

SECRETARY RICE: I spend most of my time sensing that we need to do this as urgently as possible rather than trying to come to a firm conclusion on when they're going to succeed in this complex process. We know that they are continuing to work at it, which means to me that the international community needs to step up its efforts to convince Iran that they're on a bad course. But I can't comment on how long it might take.

QUESTION: But given the scenario that you outlined of continuing to work, what is your best case? I mean, what would you hope to see will happen over the next year while the Bush Administration is still in office?

SECRETARY RICE: Well, I think the first thing that they should do, they should suspend, and then I think there are plenty of possible ways to get to a civil nuclear program that makes sense for Iran, that would come with a lot of other benefits of trade and political relations. And so that would be the best outcome because -- you asked what would be the best outcome. That would be the best outcome.

QUESTION: How realistic that is --

SECRETARY RICE: Well, alternatively, I'd like to see the international system, the international community, get more -- get tougher about the kinds of pressures that it puts on Iran and to confront Iran with a clear choice between continuing down this road and the kind of isolation that the international community can actually bring to bear. And I think it's a combination of what you do in the UN and choices that people make.

QUESTION: Can you pursue both courses at once? I mean, we are going to hammer you if you don't and the land of milk and honey is open to you if you do?

SECRETARY RICE: Yeah. And I think that's really what we're doing because Javier Solana just met with him. He's going to meet with him again. There is a package out there that is a very forward leaning and quite attractive package of measures that the six would be prepared to engage Iran in if they're prepared to come to an agreement that makes sense for them and for the international community.

And everyone says, you know, well, why won't the United States talk to Iran. Well, I've been saying, you know, why won't they talk to us. Because in fact, if what they want, which we sometimes hear, is to begin a path toward a different kind of relationship with the United States and therefore the international community as a whole, there's a path to do that and it's a very clear path.

QUESTION: Why shouldn't people, when they look at your insistence on missile defense and naming specifically Iran in there as one of the main reasons for it, why shouldn't people assume that you've just resigned yourself to the fact that the Iranians are going to get -- are going to do this and they are going to have long-range missiles too?

SECRETARY RICE: Well, because, first of all, nobody is resigned to them doing anything and nobody is pursuing a policy of -- that is based on resignation to them doing anything. But in terms of their long-range missile threat, they have also been improving their missile capability and given that these deployments of missile defense would take some time, you have to plan against their potential missile capabilities. And you know you want to both plan for the outcome in which perhaps -- and this is not just a nuclear issue, this is a ballistic missile issue -- in which they have a relationship with the international community in which you can begin to deal with that threat, but you also have to plan for the situation in which they have a relationship with the international community which you don't, and you do have to plan for that.

QUESTION: I'm sure people want to talk about missile defense more, but can I just go back on Iran? You have a situation where four Iranian Americans that we know of are in custody and one's been missing for a long time. The President himself made a statement about this a couple weeks ago. Sean yesterday or the day before made another statement about it. Have we reached the point now where you think this is a new crisis, that Iran is holding these people and wants something specific in (inaudible)?

SECRETARY RICE: No, I -- these -- the Iranians are holding people and trying people who have done nothing except try and make Iran a more open and better place, in some cases just went to visit their families. And so we are calling upon them to release these people. They should be released. But the Iranians should recognize that it just shows again what kind of regime this is.

QUESTION: But doesn't it sort of evoke that time, though, when you hear Americans are being held in Iran?

SECRETARY RICE: No, let's not try to go back to a historical analogy that I think is a very different set of circumstances. We take seriously the holding of any American anywhere in the world where they're being wrongly held and where they're being accused of things that clearly are untrue. The Embassy situation I think everybody recognizes had a special character and it is at the root of why it is very difficult to see the path to normal relations with Iran. This was a pretty unprecedented in kind of diplomatic history.

QUESTION: Will -- sorry.

SECRETARY RICE: Modern diplomatic history.

QUESTION: Will Ambassador Crocker or some other high-ranking U.S. officials have direct talks again with Iran before these people are released?

SECRETARY RICE: These people are not linked up with what we're doing in other fora. The nuclear issue is being handled by a coalition of six and we're going to keep that as an issue for the coalition of six. Ryan's conversations, if they happen again, and Iraqis would like it to happen again -- we haven't determined when and if it makes sense. But Ryan is there to send a strong message to the Iranians about Iraq and to talk to the Iranians about the degree to which they seem to be undermining their own policy. They say they want a stable, secure Iraq. They say they are supportive of the Shia-led government there. They say they want normal relations with Iraq where they're engaged in reconstruction.

And then they arm militants, send in technologies that are killing coalition forces even though everybody understands, including the Iraqis, that the coalition needs to be there until the Iraqis can defend themselves, and engaging in practices, frankly, that threaten to draw in other Iraqi neighbors in unhealthy -- unhelpful ways.

And so you say to the Iranians: How does this accord with what you say are your policies? And so you look for whether there are areas in which we might as Iraq's neighbors, and in our case kind of a neighbor through circumstance, where we might find some common ground to give the Iraqi Government the kind of support that it needs.

But I think the last thing you want to do is to conflate these issues, including the issue that we are dealing with through several different channels, including friendly governments, on behalf of the people who are being held in --

QUESTION: What issues are being weighed now about whether to continue these discussions with Iran?

SECRETARY RICE: Well, you'd like to have some sense of where this is going. It would obviously be very useful if the Iranians -- if Iranians showed on the ground that they were prepared to be more cooperative -- or let me put it this way, less uncooperative, less destructive.

But I will tell you, I think a lot of this will depend on how the Iraqis assess how they would like to see this move forward. Just like the neighbors conference, this is more than anything about rules of the road and ground rules for how Iraq's neighbors are going to relate to the Iraqi Government. And the reason we've been really prepared to go down this road with Ryan and his counterpart is that the Iraqis believe that this is useful from the point of view of beginning to engage all of the interested parties, their neighbors, in a dialogue about how to support them. And so I suspect we'll also -- as a part of the assessment, we'll lean pretty heavily on how the Iraqis think about it.

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