SECRETARY RICE: Good afternoon. I'm delighted to welcome back to Washington Deputy Prime Minister and Foreign Minister Gianfranco Fini. We have met on numerous occasions. I think that it is fair to say that the United States has no stronger strategic partner than Italy in the global challenges that we face. We have been together in Iraq. We are together in Afghanistan. We are together in supporting the Palestinian people and the Israeli people to try to find a permanent solution to that conflict, one based on democratic values in which the Palestinian people would finally achieve statehood and there would be a two-state solution.
We have had a discussion and I think we'll talk further also about the situation in the Balkans. The Minister has just returned from an extended visit to the Balkans and I look forward to discussing this further with him.
And we've also talked about the challenge that Iran poses to nonproliferation and to the international community and about our joint view that Iran must know that there is a firm international consensus against the activities that Iran is currently engaged in. We would all like to solve this diplomatically and are committed to doing so, but Iran must recognize the concerns of the international community and has not done so. And it is now time to refer the Iranian case to the Security Council.
And so thank you, Gianfranco, for your strong role in the fight against terrorism, in the efforts to spread liberty and freedom. Italy and the United States share many bonds of kinship, many bonds of friendship and, of course, enduring bonds that are based on common values.
DEPUTY PRIME MINISTER FINI: (Via interpreter) I would like to thank the Secretary of State, Condoleezza Rice, who just a few moments ago, has mentioned and stressed once again the traditional and closer relations of cooperation and friendship between the United States and Italy.
We are convinced that the fight for freedom and democracy must involve all peoples and government and must be led in cooperation and friendship.
And certainly the scenarios of Middle East, Iraq and the Balkans are the places where Italy and European Union can play a more active role and certainly this is important for the United States. They are different among themselves, but they share one need: granting those people freedom and self-determination, granting the respect of the most fundamental value of all, that is, respect for human dignity and make it possible for democratic institutions to be built because they are freely chosen by the voters.
DEPUTY PRIME MINISTER FINI: Though in conditions which are different among themselves, what's happening in Iraq, Afghanistan and the Balkans, as well as the Middle East is part and parcel of this strategy. This is the only strategy which will make it possible for the west to defeat completely terrorism and above all, the only strategy which will make it possible for those populations to grow economically and therefore achieve a social justice. And on this occasion, too, we shared the same views as to the evaluation and the activities to be carried out.
MODERATOR: Anne Gearan, Associated Press.
QUESTION: Madame Secretary, the draft European text for an IAEA resolution on Iran stops short of asking the Security Council to impose sanctions and Mohamed ElBaradei today told you he won't prepare the full report you had wanted ahead of that IAEA meeting. Are you running into resistance to your tough approach and can you be satisfied with an outcome short of sanctions? And for the Foreign Minister, what is your view of the implied threat over the weekend from the Israelis that if diplomacy fails, they might take military action? Thank you.
SECRETARY RICE: Thank you, Anne.
We've made very clear that we believe that the next step before the international community concerning the situation with Iran is to refer it to the Security Council. The question of what the Security Council will then do we will, of course, have to get to the Security Council. But it has been our belief and it is that of the Europeans as well and a number of other states, that the time has come for referral.
Now there are many unanswered questions about the Iranian program and I'm certain that in due course, Director General ElBaradei will answer those questions. But the Iranians have done plenty for a referral at this point in time. They have walked out of negotiations with the European three. They have broken the moratorium on enrichment and reprocessing that they had been involved in. They have broken the seals at Natanz. It seems to me that the case for referral is very strong and that's what we intend to seek at the IAEA Board of Governors meeting. The Security Council can then take up the matter at a later time, but the referral absolutely has to be made.
Without going to the Security Council, we are not going to have the context in which Iran will understand that it is truly isolated on this issue and must deal with the international community's just demand.
DEPUTY PRIME MINISTER FINI: Italy is the first trade partner of Iran within European Community. But this privileged position did not prevent us from stating very clearly that Tehran must cooperate with the international community on this issue. The international community must be united and very resolved. It is now absolutely necessary to refer the case to the Security Council. The Security Council will evaluate the issue, we hope, with flexibility and with political far-sightedness.
But it is essential that the whole world knows that international community is not going to be divided on the Iranian issue because it is absolutely necessary when it comes to nuclear nonproliferation, but in the Iranian case it is even more unacceptable from the moral viewpoint because of the unacceptable tones and the words spoken by President Ahmadi-Nejad. And being equally firm, we want to stress and reiterate to our Israeli friends that the only way to guarantee peace and security is the diplomatic route.
QUESTION: Do you see still some room or some developments for the European initiative for the formula which has been applied, and do you see a new format for the European negotiations possible for the Iranian case?
DEPUTY PRIME MINISTER FINI: The higher number of countries involved, the higher the success rate of the pressure on Tehran.
SECRETARY RICE: I believe that we have come to what the German Foreign Minister called a dead end in this stage of the negotiations. The Iranians are the ones who walked out. They are the ones who broke the seals. They have been the ones who've said that they intend to begin enriching and reprocessing. I don't see much room for further discussion in any format while those conditions exist, and that is why I've emphasized the Security Council route.
But let me be very clear. It's the Iranian regime that is isolating Iran, not the international community. No one wants to isolate the Iranian people. The Iranian people are a great people who deserve to be fully integrated into the international community. And I think that one thing that we will want to think about is how, whatever the course that is taken with Iran, is that the message gets through loud and clear both in rhetoric and reality to the Iranian people that we do not wish to isolate them.
QUESTION: Madame Secretary, Minister, in two days we're going to be having elections in the Palestinian territories in which the militant group Hamas is expected to do very well and quite possibly enter the government. My question is: Can the United States and the European Union accept and work with a Palestinian government that includes members of Hamas?
SECRETARY RICE: The first point that I'd like to make is that I think it will be a great day for the Palestinian people to engage in elections. They are in a transition to the creation of a basis for a democratic state and we look forward to supporting their efforts.
There are certain realities. The United States has -- Hamas is a terrorist group from the policies of the United States and it is a group that does not recognize the existence of Israel and it is a group that has not renounced violence and the problem, of course, is a very practical problem. In addition to the fact that the United States won't change its policies toward Hamas, the practical problem is that the Palestinian leadership in the roadmap is committed to a renunciation of violence, committed to dismantling terrorist organizations, committed to a peaceful road.
It probably goes without saying, but I'll say it anyway, that it's hard to have negotiations with a party that you do not recognize its right to exist. And so if we indeed do want a path to peace between Israel and the Palestinian people, it is going to have to be one in which Palestinians and any Palestinian government is committed to a peaceful path.
I might also add that this has been said by the Palestinian Authority President on a number of occasions that there has to be one authority and one gun. And as said by the Quartet that it is not possible to have -- I'm paraphrasing but -- one foot in terrorism and the other foot in politics. It simply doesn't work.
QUESTION: (Via interpreter) This is a question to you, Secretary of State, the United States says that the option in the Iranian issue is -- the valid option is the diplomatic one, but that on the President's table, there are all options open. Now considering the present situation, considering also the fact that in Iraq still a war is being waged, is it realistic to think that United States can afford to fight two wars?
SECRETARY RICE: Well, the question, as I said when I was in Europe, is not on the agenda because we have committed to a diplomatic course. We believe that a strong international response, a united international response, a Security Council context and response can indeed succeed in getting the Iranian regime to take a more acceptable course because I do not believe that the Iranian regime wants to be isolated in the way that it will be when it's in the Security Council.
SECRETARY RICE: But let me be very clear, the President of the United States doesn't take any options off the table. The key here is for an international response that will deal with a very real threat of an Iranian regime that may be, indeed, dedicated to the creation of a nuclear weapon under cover of peaceful nuclear uses. It's not acceptable and that's what you're hearing from Italy, that's what you're hearing from around the world and I believe that you will hear it very strongly when the IAEA Board of Governors meets in February.
MODERATOR: Thank you.
SECRETARY RICE: Thank you.
QUESTION: My question was can the USA afford realistically a second war?
SECRETARY RICE: I said the President takes no options off the table.