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Q: Thank you, Mr. President. I'd like to shift gears to foreign policy. What is your strategy for engaging Iran, and when will you start to implement it? Will your timetable be affected at all by the Iranian elections? And are you getting any indications that Iran is interested in a dialogue with the United States?

THE PRESIDENT: I said during the campaign that Iran is a country that has extraordinary people, extraordinary history and traditions, but that its actions over many years now have been unhelpful when it comes to promoting peace and prosperity both in the region and around the world; that their attacks or their financing of terrorist organizations like Hezbollah and Hamas, the bellicose language that they've used towards Israel, their development of a nuclear weapon, or their pursuit of a nuclear weapon -- that all those things create the possibility of destabilizing the region and are not only contrary to our interests, but I think are contrary to the interests of international peace. What I've also said is that we should take an approach with Iran that employs all of the resources at the United States' disposal, and that includes diplomacy.

And so my national security team is currently reviewing our existing Iran policy, looking at areas where we can have constructive dialogue, where we can directly engage with them. And my expectation is in the coming months we will be looking for openings that can be created where we can start sitting across the table, face to face, diplomatic overtures that will allow us to move our policy in a new direction.

There's been a lot of mistrust built up over the years, so it's not going to happen overnight. And it's important that even as we engage in this direct diplomacy, we are very clear about certain deep concerns that we have as a country -- that Iran understands that we find the funding of terrorist organizations unacceptable; that we're clear about the fact that a nuclear Iran could set off a nuclear arms race in the region that would be profoundly destabilizing.

So there are going to be a set of objectives that we have in these conversations, but I think that there's the possibility at least of a relationship of mutual respect and progress. And I think that if you look at how we've approached the Middle East, my designation of George Mitchell as a special envoy to help deal with the Arab-Israeli situation, some of the interviews that I've given, it indicates the degree to which we want to do things differently in the region. Now it's time for Iran to send some signals that it wants to act differently as well, and recognize that even as it has some rights as a member of the international community, with those rights come responsibilities.

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