MR. ERELI: Okay. Well, no statements to begin with. So we can just go straight to your questions.

Q This is either a brilliant question or a silly one, but it's very straightforward. What is the U.S. position on the deal the three Europeans struck with Iran? Do they approve -- do you approve of it? Are you in a watchful, waiting mode? Do you disapprove? Are you skeptical?

MR. ERELI: The secretary spoke to this in his interview with -- briefing with the press yesterday. And I think I'd refer you to his remarks. This is the best -- I guess the best word I would use is agnostic. We've seen this thing before. This is -- we've seen this thing before. They've had a deal with the EU to suspend enrichment. They broke it. The EU-3 goes back and negotiates and comes up with another deal. We'll be discussing it. We have discussed it. We are discussing it with the EU-3. It will be the subject of discussion at the Board of Governors meeting.

This is something that the -- we were advised of, knew about, consulting with consistently with the EU-3 -- both the secretary with his colleagues, Undersecretary Bolton with his colleagues. So it is something that we have been informed with, consulted with, aware of, but it is a deal between the EU-3 and Iran. And we, I think, are appropriately reserving of judgment on it based on previous experience.

The important issue here is not just -- not specifically the deal itself, but the bigger picture. And that is continuing indications of a clandestine nuclear program which Iran persists in developing that poses a threat to the region and, we believe, to the United States, and is something that the international community is seized with and is, I think, committed to confronting.

This is the position we have made very clear for the past more than 10 years -- 18 years. And, you know, the more we dig, the more we engage with Iran, the clearer it becomes to us, and we think the rest of the international community, that there's a there there. And I would look at the EU-3, latest EU-3 deal as a recognition that there is a problem, that there is a need to do something about it, and that they're trying this approach. It's been tried before; it didn't work very well. They're going at it again.

We will continue to work with them, discuss with them, and deal with the issue in the appropriate fora, which is the IAEA, and make our conclusions, frankly, based on Iranian actions. Again, at this point we're in the stage of, I think, rhetoric. But when -- the rubber meets the road when Iran respects its commitments over time. So far, we haven't seen that.

Q Is there anything to be gained, any point, in bilateral meetings with the Iranians like at Sharm el-Sheikh, for instance?

MR. ERELI: That is a purely speculative question.

Q You're not going to say it's -- in other words -- when you say "speculative," that leaves open the possibility that we'll have them, doesn't it?

MR. ERELI: I don't -- I'm not aware that that possibility is being considered.

Q Okay.

MR. ERELI: Yes?

Q Last week, Secretary Powell said that he thought -- or earlier this week -- there's -- he called it progress, the Iranian deal with the EU-3. Is that still the State Department's position, that the deal shows some progress?

MR. ERELI: I won't -- I won't characterize it that way. First of all, let's let the secretary's words speak for themselves. What I would echo is that we are approaching this issue and dealing with this issue with the appropriate degree of caution. We've been down this road before. The Iranians went off track. The EU are trying to get them back on track. But we are appropriately cautious, given past experience.

Q May I follow up?

MR. ERELI: Mm-hmm.

Q Having said that, are you still considering pushing the issue to the Security Council?

MR. ERELI: Well, we've been clear that based on Iran's past actions, we believe that this is an issue that should be referred to the Security Council. It is a matter that -- and that's a matter of record. This issue will be something we will be discussing with the IAEA Board of Governors later this month. And based on, you know, what's happened with the director general reports, based on the views of others, we'll decide and come to consensus about what the next steps are. But it's the United States' and it's consistently been the United States' position that Iran has, based on what it has already one, demonstrated that this is a matter that should -- that we think should go to the Security Council.

Q But hasn't Iran successfully split the U.S. from its -- how can you go to the Security Council if France and Britain are happy with this plan here?

MR. ERELI: You're asking me two different questions. The question was, one, what does the United States think. I'm telling you what the United States thinks. You're asking question two, what can be done about it, and the answer is to continue to put the spotlight on Iran's actions or its misactions and continue to work with the international community, including the EU-3, on constraining Iran, on getting it to meet its international obligations and getting it to meet its treaty commitments, and, failing that, to take appropriate international action. That's what we're engaged in.

Q Can I follow that? I just want to put this in the context of the secretary's remarks on the plane. I mean, if the U.S. believed that Iran was developing a delivery system, then why would you even consider this agreement, because you feel as if it's not a peaceful program?

MR. ERELI: Well, the agreement with the EU is to suspend enrichment, end uranium-enrichment activity. That is what the IAEA has called upon Iran to do, and that is the goal that we're all working toward. Whether this latest effort can accomplish that goal is going to be something that -- is something we were just talking about with the Europeans and will be a further matter of discussion with the IAEA

As far as Iran's missile program, that's, again, been a matter -- first of all, that's not a subject of -- or a matter for the IAEA -- it's not a subject of discussion at the IAEA board of Governors. That's another piece of the puzzle. It deals with the issue of not necessarily the development of weapons of mass destruction but a development of delivery systems.

Again, that has been a concern that we have voiced very consistently and I think have been very determined in working with our partners in the international community to address and to try and prevent.

Q Can I -- one more. Are you saying or was the secretary saying that you're just talking about your general concerns about Iran's missile program, or is he suggesting that Iran is developing warhead designs?

MR. ERELI: I'd refer you to the specific remarks he -- his specific remarks. I'm not going to -- I'm not in a position to elaborate on what the secretary said. I think what we've made clear consistently is we believe Iran has a covert nuclear weapons program and they are -- their programs to develop delivery systems are of concern and a threat to the region and to the United States.

Q Okay. But without parsing the secretary's comments, does the U.S. believe that Iran is developing a warhead design?

MR. ERELI: I don't have a judgment to share with you on that.

Q Just a quick follow-up on that, Adam. On the delivery system, would Iran -- as part of it getting back on track that you were talking about, would it have to give up its delivery system or disband it as far as getting back on track, or that would be separate from --

MR. ERELI: The getting on track or off track were remarks related to suspension of uranium activity, so that deals with -- that deals with development of WMD. The missile issue is a different issue and dealt with in a different forum.

Q So you wouldn't -- you know, if they get back on track as far as the enrichment and so on and they request a bilateral meeting, would that be then --

MR. ERELI: (Chuckles.) Well, let's put the bilateral meeting aside. Everyone's talking -- there's a lot of talk about bilateral meetings. I think our position on engagement with the Iranians is clear. We have always said we're not opposed to talking with the Iranians, if and when we have an interest in doing so and when the president determines that it's in our interest to do so. So that's a general statement of principle.

I'm not aware of any consideration being given, serious consideration being given, to such engagement. Why? Because, frankly, we haven't seen the kind of -- or there's -- it doesn't strike us as the moment or opportunity to do so.

The second issue that you talked about is the issue of weapons development. That's an issue that we're dealing with through the IAEA, through multilateral diplomacy.

That's proven effective, we think, and is the appropriate way to deal with it. And that's where we're focusing our efforts.

Q Adam, I want to see if I heard you correctly and then ask you to try and explain two statements. You said that their programs to develop delivery systems is a threat to the United States, if I heard you correctly. And then you said you're opposed to talking to them unless the U.S. has an interest in doing so. If it's a direct threat to the United States, why wouldn't you have an interest in talking to them?

MR. ERELI: Let me put it this way: I don't want to break any new ground here on the subject of talking to Iran. And for our position on that, I think it's very well stated as a matter of public record and testimony by both the deputy secretary and the secretary. So if you want to -- if you want the mantra on, you know, what our position is on talking to Iran, look to those. I'm speaking from that script. So that's number one.

Number two, Iran's programs are a threat to U.S. interests. I think that's, again, patently obvious. Your question goes to the issue of what's the best way to deal with confronting that threat and protecting those interests. It is -- at this point in time, our position, our assessment that the most effective way of dealing with that threat is through the mechanisms and processes we have in place -- through the IAEA, through international cooperation, through multilateral diplomacy -- that that, I guess, bears the -- that moves the ball forward in a way that we want to move it forward.

I'm not ruling out the possibility at some time in the future, given some constellation of circumstances, taking other approaches, and that's what our more senior officials have spoken to quite publicly. So don't really -- don't read into or make more out of what I'm saying than what has already been said.

Q But those statements you referred us to are old statements. We're looking to the future. And they're statements presumably made before this disturbing development about trying to marry --

MR. ERELI: Yeah.

Q -- a missile to the weapon, which, by the way, I don't know if you're saying they're just trying or you're saying they've succeeded in finding a way to do this. I think he's saying they're just trying so far. So I guess we're repeating ourselves. We're trying to look ahead just a few days down the road. And frankly, it's hard to believe if you're this -- not -- I mean, I believe what you're saying.

But it's hard to imagine that if you're so concerned and you're in the same room with the Iranians, what would be the harm in talking to them? What could be lost? Why not?

MR. ERELI: (Laughs.)

Q You talk to North Koreans. You talk to -- you talk to just about everybody but Cuba.

MR. ERELI: Let me put it this way; the issue is not talking. The issue is not if you're in the same room and you talk, then maybe there's a solution. I think that's a little quixotic.

The issue is analyzing Iranian behavior, Iranian strategic intent, and Iranian actions, and on the basis of those considerations, coming to a considered judgment about what approach is going to lead to the conclusion that you're looking for. And that's why we're taking the approach that we're taking.

Now, frankly, given where things are, given the number of serious concerns we have with Iranian behavior -- not just in the area of WMD and missile technology, but in the issue of support for terrorism, opposition to the peace process, attitudes towards Iraq -- the question is not a pull-aside at one international gathering or another. The question is moving -- the question is confronting these issues in a systematic and substantive way. And that's what is -- that is what we're basing our approach on.

Yes?

Q Back to the Security Council issue, you said that it's your policy to refer them. If you hear enough from the EU-3 and from whoever else, the IAEA, are you willing to consider the possibility of postponing referring it to the Security Council this time?

MR. ERELI: We will -- this will be a matter of discussion at the IAEA. I don't want to preview now what those negotiations might produce. I will describe to you what our position as a matter of record has been and what our goals are. Our goals are to get Iran to stop and cease its nuclear weapons program. And we're going to work with our EU colleagues and our IAEA colleagues to achieve that end. What specific steps are taking, in what sequence, in response to what actions -- again, I'm just not going to go down the road of talking about hypotheticals. I will tell you what our goal is, and our goal is to move Iran away from its -- the path that it has taken, which is to develop nuclear weapons.

Q But if the way for you to get to that goal is be a little more flexible with your policy, are you willing to consider it?

MR. ERELI: Like I said, I'm not going to discuss with you all the different possibilities of how we meet that goal. Right now our focus is multilateral diplomacy, working with partners to achieve an international consensus and international action in response to a common threat, and that involves -- you know, that involves all aspects of multilateral diplomacy.

Q Want to break -- want to break new ground on anything else?

MR. ERELI: (Chuckles.) Spent a lot of time talking about what's already been talked about. But anyway, go ahead.

Yes, Said (sp).

Q Yes. Can we change topics to the Middle East?

MR. ERELI: Mm-hmm.

Q The Israelis are saying that the United States government has decided to give $20 million to the Palestinian Authority, not going through Congress. Could you -- do you have any information on that? And this will actually be announced during the meeting next week?

MR. ERELI: We are discussing with Congress the idea of providing direct aid to the Palestinian Authority. As you know, this is something we did two years ago, when we provided $20 million to the Palestinian Authority. It's an idea that's under consideration. It's an idea that we are discussing with Congress as part of our desire to get their views and be cooperative with them.

No decision has been made, so it would be -- it would certainly be premature to conclude that we are or are not going to do something. We are looking at it.

The broader point to make is that we are interested in ways that we can help support the Palestinian people and the Palestinian leadership as they try to emerge from really the -- emerge from the past years of conflict and violence. This involves, as the president said, ways to revitalize the Palestinian economy, and I think you should look at the discussions in that context.

Q How much of the aid you've given do you think actually got there and was put to good use? What percentage --

MR. ERELI: The 20 million (dollars) from 2003?

Q Take that for an example.

MR. ERELI: That 20 million (dollars) was, I think -- I don't think -- that 20 million (dollars) was very -- was fully accounted for and used in the way it was intended because we only gave it when we were assured and confident that the institutions and processes to guarantee accountability and transparency were in place.

So $9 million of it went to utility payments, and the remaining went to projects to repair and rehabilitate municipal infrastructure. And the accounting and reporting on that was, in our opinion, airtight.

Q Just to keep the facts straight, in the interim you have assisted directly projects, haven't you?

MR. ERELI: In the interim, no. In the interim, all our aid has been given to U.S. NGOs.

Q Right.

MR. ERELI: So all the assistance has been given -- actually, correction -- has been administered either through USAID or has gone to the U.N. Relief and Works Agency for Palestinian Refugees.

Q Do you know how much that is?

MR. ERELI: In 2004 there was a total of $127 million that went; $87 million went to the general fund, and $40 million went to the Emergency Appeal.

Q (Off mike) -- the nuts and bolts of Congress. Do you need Congress's permission to do this, or are you just being nice and politically smart and adept at talking to Congress about doing it? Do you need their permission?

MR. ERELI: It depends on how the money's disbursed. There are a number of, I think, legislative mechanisms for providing the aid. Depending on which mechanism you choose, the modalities are different. And that also is one of the issues under discussion.

Q This would be done at the discretion of the president; he wouldn't have to go to Congress, right?

MR. ERELI: Well, I don't want to get into -- I'm not in a position to get into the legal details. There are different ways of doing it. We are consulting with Congress on what is the most appropriate way to provide the aid.

Yes?

Q President Mr. Bush is scheduled to have a summit talk with Mr. Roh Moo Hyun, South Korean president, on the 20th of this month. And Mr. Roh Moo Hyun already expressed his concern over kind of hard- line policy toward North Korea. So what response will Mr. Bush make over such concern?

MR. ERELI: For comments on the president's meetings with foreign leaders, I'd refer you to the White House. I'm not in a position to preview what the president may or may not say.

Regarding our cooperation with South Korea, I think we -- the secretary had a very good visit with his South Korean counterpart last month in Seoul. They will be meeting again this week in Chile. We, I think, have close convergence of views on not only the threat posed by North Korea but how most effectively to deal with it.

Q Have you ever figured out why the posters disappeared of the great leader?

MR. ERELI: No. Quite frankly, we haven't seen really anything going on in North Korea to raise alarm bells here.

Q Different topic.

MR. ERELI: Mm-hmm.

Q I wonder if you would comment on that; the Israelis today, they killed three Egyptian soldiers. Have you been informed, what are the --

MR. ERELI: I don't have the details on that. I'm not in a position to comment on it. It's a matter between the Israelis and the Egyptians.

Q Thank you.

Q Thank you very much.