. . .

QUESTION: Yes, Madame Secretary, thank you. Two questions. One is: Is the offer to sit down at the table with the EU-3 linked to any concessions from Russia and China to support eventual sanctions if the talks stall?

And secondly, the idea of security discussions with the Iranians -- is the United States willing to engage in security -- if the subject turns to security, is the United States willing to engage on that subject as well?

SECRETARY RICE: Let me take the second question first, Peter. First of all, we have many issues of concern with Iran that do not relate to the nuclear issue, and the security issues that we're concerned about are Iranian behavior in Iraq that endangers both the Iraqi people and our own forces; the terrorism that Iran continues to support in places like the Palestinian territories and indeed in Lebanon. Those are the security issues that are of concern to us and so, as I said some time ago, we have not been asked about security assurances and I don't expect that we will be.

Now, as to the question nonetheless of how we brought this all together, we've obviously had extensive discussions with all of our partners who have been trying to find a resolution of this nuclear issue. And we have made clear that we believe that the offer to join the EU-3 talks should Iran verifiably suspend all of its enrichment-related activities, that that offer gives the negotiating track new energy. We want this to work on the negotiating track. The President has made that very clear.

But we've also been in discussions with our partners about a package which we agreed to design when we were in New York a few weeks ago, and that package represents two tracks: One is a set of benefits should Iran agree to negotiate and negotiate in good faith, having suspended its program; but quite clearly, also a set of penalties or set of potential sanctions should Iran not be willing to act in good faith.

Our political directors have been working on that package. They have made good progress. I think that we have substantial progress. There are some outstanding issues that I would hope to be able to work on in Vienna. But let's go back to what is really at stake here. There is a strong international consensus that Iran must not have a nuclear weapon, that Iran must adhere to the international community's demands that it suspend its enrichment activities and return to negotiations and that if Iran is to have a civil nuclear program, it needs to be one in which the international community can have confidence that they're not trying to build a nuclear weapon under cover of civil nuclear power. We have complete and total agreement on that.

We are working on ways to make that choice clear to Iran. I think the last year and half or so -- year or so has really been about creating a climate of opinion about what is demanded of Iran. That we have done. And now we hope that this offer, this proposal that we would join the talks, should Iran suspend, will help to create a climate for action either in negotiations or in the Security Council.

Anne Gearan.

QUESTION: So to follow on that, do you have agreement then from Russia and China that if you got to that point, having made this overture sort of taken the last best hope here for diplomacy that if it fails at that point, they would be willing to back what they've been, thus far, unwilling to do?

SECRETARY RICE: I think that a substantial agreement and understanding that Iran now faces a clear choice. This is the last excuse in some sense. There have been those who have said, well, if only the negotiations had the potential for the United States to be a part of them, perhaps then Iran would respond. So now we have a pretty clear path. We have negotiations, if Iran is prepared to suspend. If Iran is not prepared to suspend -- and by the way, this is the understanding that comes out of New York -- that there is another path. And while we have worked to get agreement on what had been some tactical differences, I think you can be sure that our friends and our partners understand the importance of this step and the importance that the Iranians must now see of making a choice and making that choice clearly. I think we have very good understanding with our partners about that.

John.

QUESTION: Madame Secretary, two questions. One, in the past when this issue's come up and I've asked you about it directly, you said that there's no need for the United States to be part of the negotiations because Iran knows full well what they need to do. What's changed your thinking on that?

And secondly, if this works and if Iran does what you hope they will do on terrorism and on the nuclear issue, do you hold out the possibility of full diplomatic relations with the Government of Iran?

SECRETARY RICE: John, I am not going to speak hypothetically about the last point. This is not a grand bargain. I want to make very clear we are not talking here about what some have characterized as a grand bargain. What we are talking about here is an effort to enhance the chances for a successful negotiated solution to the Iranian nuclear problem, something President Bush has said that he very much wanted to do. We have always been determined to do what we could to support the negotiations. If you remember about a year ago we made some steps to support those negotiations. We now believe that having created a strong climate of opinion in which all states are united, in which a great number of states are united around a clear concept of what Iran must do, and that, by the way, includes a precondition of suspension for negotiations, that the United States might be able now to add weight to the negotiating track by joining these discussions.

Let's be very clear. Things are moving along on the ground. When the Iranians decided to walk out of the Paris agreement -- Paris talks and to begin accelerating their nuclear activities, the concern is growing that Iran cannot be allowed to continue that path of acceleration of its nuclear activities unchecked. So we now have an opportunity to either check their movement toward further sophistication of their nuclear program by negotiation to which we would be a party or to check it by greater pressure on the Iranians through sanctions and other measures through the Security Council and, if necessary, with likeminded states outside of the Security Council.

But it is time to know whether Iran is serious about negotiation or not. We cannot continue in a circumstance in which every few days an Iranian official says, well, you know, we're sort of interested in the Russian proposal or maybe we're interested again in going back to the EU negotiations, but nothing happens. And so we think it is time now to have a clear choice and a clear -- two very clear paths.

QUESTION: But full diplomatic relations are --

SECRETARY RICE: John, we are not in a position to talk about full diplomatic relations with a state with which we have so many fundamental differences. But the Iranians can, by seriously negotiating about their nuclear program and seriously coming to a civil nuclear program that is acceptable to the international community, begin to change the relationship that it has with the international community, change the relationship that it has with the United States, begin to open the possibilities for cooperation. That ought to be an important step that Iran is prepared to take.

Yes, Barbara.

QUESTION: Madame Secretary, in the past this Administration has been very reluctant to do anything that might be seen as giving legitimacy to a government that you, at least the past, always talked about as being led by the "unelected few." By agreeing to sit down with this government, are you now providing that legitimacy to this administration which has been in power for 27 years in Iran, and are you also saying that the U.S. is not going to actively try to undercut, overthrow, undermine the Iranian Government?

SECRETARY RICE: We have been very clear and nobody is confused about the nature of this Iranian regime. We know precisely about the nature of this Iranian regime. We know that this is a regime that does not give rights to its people for political participation. We know that this is a regime that is engaged in supporting terrorism around the world. Nobody is confused about the nature of this regime.

But the President made very clear that we are going to do everything that we can to find a diplomatic solution to the nuclear problem and the only thing that is being provided legitimacy here is the international community's consensus that Iran must suspend its current enrichment and reprocessing activities, return to serious negotiations, find a civil nuclear program that does not have proliferation risks associated with it through the fuel cycle, and negotiate in good faith. That's what's being provided legitimacy. What's being provided legitimacy here is the negotiating process to which we have long been committed.

We will continue to have our differences with the Iranian regime on the vast number of issues that are before us, but it is our view that a diplomatic solution to the nuclear program is necessary, a diplomatic solution to the nuclear program is in sight by a unified response of the international community and that this is our best way to get that response.

Yes, Barbara, you can follow up.

QUESTION: You give legitimacy to a process, but in fact you have to give legitimacy to the representatives who are sitting there. And also, European diplomats have said that in the course of these talks, or perhaps in other fora, security issues would be discussed. Not that the U.S. was being asked to give security guarantees to anybody, but that the U.S. obviously would be willing to talk to Iran about its concerns about the security of the Persian Gulf. Is that true?

SECRETARY RICE: Barbara, let me go back to the first point. We have been a party outside of these negotiations, supporting these negotiations all along. So nothing is changing in that regard. The fact that we would sit to actually try and resolve the nuclear program diplomatically, I think it goes without saying. By the way, we have done this with regimes with which we have serious problems. We have been doing it with the North Korean regime also in a multilateral setting.

But let's remember what is not happening here. This is not a bilateral negotiation between the United States and Iran on the whole host of issues that would lead to broader relations between Iran and the United States. This is an effort to reinforce diplomatic negotiations that we believe should succeed and have a chance to succeed with the strongest possible way.

In terms of security, we have found ways to make our concerns about security known to the Iranians. We've done it, for instance, in Afghanistan through a channel between our ambassadors. Of course we'll make our concerns about security known to the Iranians. But we're not going to negotiate about the terms of terrorism. You don't negotiate about terrorism. It's wrong to engage in terrorism and there isn't anything to negotiate. But will we make our concerns known? Absolutely we'll make our concerns known.

Yes. Saul.

QUESTION: So far, Madame Secretary, you have always ruled out -- sorry, you have always refused to rule out the military option against Iran. But are you prepared to consider taking that option off the table, at least temporarily while negotiations go ahead?

SECRETARY RICE: The President is not going to take any of his options off the table, temporarily or otherwise. I don't think you really want the American President to take his options off the table. But the President has said that we are committed to a diplomatic solution to this problem and we believe that there are many things that we can do diplomatically. I can remember being asked several times: "Well, is diplomacy coming to an end?" And those who travel with me will remember that I have said there are many other arrows in our diplomatic quiver. Well, this is one of those arrows in our diplomatic quiver that if, in fact, the Iranians are prepared to suspend, then the United States is prepared to reinforce these negotiations at the table. But the principal condition here has not changed. It is not our condition. It's the condition that the Europeans set. It is also the condition that the Board of Governors affirmed and it is the condition that the Security Council presidential statement affirms.

And so what we will do, I believe, by making this step is to make clear that these paths are now available to the Iranians and to, in a sense, expect that the Iranians are going to soon demonstrate which of these paths they intend to take.

Yes.

QUESTION: Madame Secretary, just to return to the first question you were asked -- to pin you down a little bit closer on it -- is the United States decision to sit down with Iran contingent on the behavior of any country except Iran? And by that, I do mean Russia and China. There are reports, as you're probably aware, that the U.S. does expect Russia and China to support stronger sanctions. And also, is the package that you're going to discuss in Vienna -- can you give us any more details about it? For instance, is there a light-water reactor in the package or is the United States prepared to let this be an EU-3 package and not a P-5+1 package?

SECRETARY RICE: Well, as to the package, we are going to be discussing the package in Vienna. I also think it's only fair that we have the discussions with our partners before we have the discussions in public about the package. The package is one that we believe represents the instructions that the ministers gave when we were in New York, which is a series of positive benefits if Iran is prepared to abandon its nuclear weapons ambitions, and a set of penalties or steps that could be taken if Iran will not take that choice.

In terms of what we expect, we do expect from the international community, particularly from our partners, that if Iran demonstrates that it is not prepared to take the negotiated path that we are going to go along the path of strong action in the Security Council and that includes measures that may be able to bring pressure on Iran to do so.

We have -- our choice is the following. We cannot allow Iran to get a nuclear weapon. That everybody has agreed to. Therefore, our choice is to provide an atmosphere in which Iran comes back to negotiations and we solve this by a negotiated track -- we're trying to give that the very best chance; or, if Iran is not prepared to do this through a negotiated track, to bring isolation on Iran so that Iran realizes it doesn't have any other option. Those are the two choices. And we're going to -- we're not going to stop work on -- with our friends and allies on what we might do if Iran makes the wrong choice. We're going to continue those discussions. We have options that are very near-term options should they not make the right choice.

But I want to emphasize the diplomacy again here. This is a real opportunity. It is an opportunity for the world to clarify Iran's intentions and it is an opportunity for Iran to make its intentions clear. If Iran really wants a negotiated solution, it can suspend its enrichment-related activities as it has been required to do in a Board of Governors resolution, and we can sit down at the table and talk about how to get to a civil nuclear program that is acceptable to the international community.

Janine.

QUESTION: What is unclear to you about Iranian intentions?

SECRETARY RICE: Well, I think most of the evidence thus far is that Iran does not intend to have a civil nuclear program that is acceptable to the international community; thus far, that Iran does not intend to accede to the Board of Governors demands or those of the Security Council presidential statement. But this is another opportunity for Iran to demonstrate that, in fact, they do intend to come into the international consensus about this.

We are prepared to go either way. We are prepared to do the negotiations and the United States is prepared to be a party to it. But Iran must suspend its enrichment activities fully, verifiably and then we can have negotiations. Those negotiations, I think, will open up new opportunities and new benefits for the Iranian people, but that is only possible if Iran makes the choice to follow the path that has been put before them by the international community.

There's another path, which is a path of isolation and considerable cost. And we are working along both those paths, but obviously with a hope that diplomacy and negotiation is going to succeed.

Thank you very much.