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QUESTION: Let's talk about Iran, the source of a major headache here in Washington. Iran is still on the path of trying to acquire nuclear capabilities for military application, notwithstanding UN resolution, notwithstanding unilateral American measures against it, notwithstanding a basket of incentives.

I mean, is it still possible to pursue a policy with real options with Iran during the few months of the Bush Administration and for the next president? I mean, what is the next president going to inherit when it comes to Iran?

SECRETARY RICE: Well, the next president will inherit an international coalition against Iran and against Iran's desire to have nuclear capabilities that could lead to a nuclear weapon. The six parties that work together have passed four Security Council resolutions. Iran's economy is having very deep difficulties, I think in part because of the increasing isolation of Iran. And Iran is getting a very strong message from the international community that it can have civil nuclear power, that there is another way for the Iranian people, but that it's not the path that its leadership is on. And frankly, it's touched off interesting debates even inside Iran about what Iran's future course should be.

QUESTION: We are sitting in Bill Burns' office. I guess we invaded him - his office.

SECRETARY RICE: Yes.

QUESTION: Why shouldn't we see his participation in multilateral talks with a senior Iranian official recently as indicating some sort of a shift towards a degree of or a measure of engagement? And is there a softening here of policy towards Iran, or just a recognition that we need to have an international framework to ratchet up pressure on it?

SECRETARY RICE: Well, the United States has been very consistent in its approach to Iran, and that consistency has been with our friends and allies to have two tracks: on the one hand, a track that can go to the Security Council and show Iran that there are costs for being unwilling to do what the international community demands; and on the other hand, there can be negotiations and a track toward better engagement with the world. And what Bill Burns did when he went to meet with his colleagues in the six parties was to simply go to receive the answer from Iran to the very generous package that had been put on the table. Now if Iran wants to have sustained engagement with the international community and with the United States, it's easy to do: Just suspend enrichment and reprocessing; we're ready to sit down and talk with Iran about anything at any time, at any place.

QUESTION: But they keep saying no; and they keep enriching uranium.

SECRETARY RICE: They do, but they're doing it at an increasingly high cost to Iran, and we have to hope that there are, indeed, reasonable people who will see that this course of isolation is not good for Iran. And I do believe that there are now very extensive debates inside Iran about exactly this question, because the Iranian leaders, the Iranian regime, wants the Iranian people to believe that they can't have civil nuclear power, that they're being denied civil nuclear power. In fact, they can have civil nuclear cooperation through the IAEA as soon as they stop enriching and reprocessing material.

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