PRESIDENT BUSH: A couple of opening statements, and then a couple of questions per side.

. . .

I do want to mention that we did talk about a couple of very important subjects. Obviously, we spent a lot of time on Iran. After all, we're close allies in trying to make sure that the Iranians do not develop a nuclear weapon. We talked about the WTO round, the Doha round for the WTO, and I appreciated the Chancellor's willingness to work with not only the Europeans, but with a country like Brazil, and others, to see if we can't bring this round to a favorable conclusion.

. . .

CHANCELLOR MERKEL: (As translated.) Well, let me say that I am very pleased to be here, and I am also very gratified -- (inaudible) -- to talk to you about. We have been able to strike up what is a very, very good rapport, very good relationship, and is a friendship. And we bolster that friendship mostly by telephone calls; we've been in constant contact.

We've addressed a number of issues here today of regional concern, chief among them is Iran, where we are in total agreement, saying that under no circumstances must Iran be allowed to come into possession of a nuclear weapon.

We are in agreement, also, that a diplomatic solution needs to be found, and we do see good chances for bringing this about. But we also think that it is essential, in this context, that the clear resolve of the international community is shown by standing united, by showing cohesion on this matter, and -- (inaudible) -- be crucial in this context is that we try to draw as many partners as possible into the fold, and to clearly show to the Iranians that this is unacceptable.

. . .

Q Mr. President, what kind of sanctions should be taken against Iran, and when?

PRESIDENT BUSH: That's the kind of question that allies discuss in private.

Q You discussed it just this afternoon.

PRESIDENT BUSH: Hold on a second. It's very important that the international community send a clear message to the Iranians that a nuclear weapon is unacceptable. We are pleased that the EU3 has taken such a strong role in this measure. It is part of having a unified message. The United States is actively involved with our partners in achieving this important objective.

The first important thing that must be done in achieving an issue diplomatically is for everybody to share a goal. And the goal is clear, and that is the Iranians should not have a nuclear weapon or the capacity to make a nuclear weapon. And that, in itself, is an important diplomatic achievement.

The Chancellor and I, of course, obviously agree on that, but so do other partners in this effort, such as the Russians. They agree that the Iranians should not have a nuclear -- it's a good starting point. And now we're talking about the tactics, as to how to achieve that objective. One such tactic is to go to the United Nations Security Council, and today we laid down a resolution. And we will continue to consult with our partners as to how to achieve a diplomatic solution to this issue. And the timing of resolutions and what they should say is all -- what allies do. And we will come to a common agreement as to how to proceed, because this is a common effort.

And the Iranians must understand that we won't fold, that our partnership is strong; that for the sake of world peace they should abandon their nuclear weapons ambitions. And we're resolute on that matter. So that's what Angela and I talk about. We talk about how to make sure this coalition continues to send a common message. I appreciate her steadfast and her strength on this issue.

Let's see, we've got Toby, yes.

CHANCELLOR MERKEL: Let me just add one remark. I think the situation just the one that we have now, it is crucial, if one wants to see this conclude to a diplomatic success, to actually do this on a step-by-step basis. Quite often, attempts have been made to rush matters, and to actually pre-empt what should be at the end of the process and to take the next -- the other next step before the next one. And I really do think that on this one in order to pursue this diplomatic process successfully we need to pursue this on a step-by-step basis.

It's happening now. We now have an agenda. What is on the agenda now is looking at this matter, and then the Chapter 7 Security Council resolution, and what we need to do further is accept what we want to pursue further in this process with all our partners and try to keep them all together.

PRESIDENT BUSH: Right. Toby.

Q Madam Chancellor, do you want the United States to talk directly with Iran on this issue? And did you tell that to President Bush today?

CHANCELLOR MERKEL: What I want is to achieve things together, to be successful in this together in what we are trying to do here -- and that is to see to it that Iran is not in possession of a nuclear weapon, persuading them that they will not be allowed to get possession of a nuclear weapon and that they need to abide by international rules.

And I think in this overall process we have shown that there is very good interaction between us. What we have been doing, we've been doing together and shall continue to do so. And I think it is right in this overall process to say it's important what the European Union has done in this process, they've played a very crucial role. And I must say that I'm fully behind the attempts that have been made by the EU3, together with the United States, because right from the start we have been in on this together, and we shall continue to do so.

. . .