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QUESTION: So let's talk about some of those policies. On Iran, there are a number of people, as you know, who argue that the President and you were too slow to condemn what seems to have been fraud in the elections, too slow to offer support to people on the ground because you wanted to preserve the option of negotiating with Iran. Can you really negotiate with Iran at this point?

I understand, in general, one negotiates with all kinds of regimes. But practically speaking, right now, with Ahmadinejad having been inaugurated in a very disputed atmosphere, won't you be legitimizing him if you negotiate with him?

SECRETARY CLINTON: Let me start with the first part about our reaction. There was another very important aspect. We did not want to get between the legitimate protests and demonstrations of the Iranian people and the leadership. And we knew that if we stepped in too soon, too hard, the attention might very well shift and the leadership would try to use us to unify the country against the protestors. That was a - it was a hard judgment call, but I think we, in retrospect, handled it pretty well. Now, behind the scenes, we were doing a lot. As you know, the young - one of our young people at the State Department got Twittered, "Keep going," despite the fact that they had planned for a technical shutdown. So we were doing a lot to really empower the protestors without getting in the way. And we're continuing to speak out and support the opposition.

On the question of engagement, that has been the President's policy. We have made it clear. We have communicated in a number of ways to the Iranian leadership. But we are under no illusions; we were under no illusions before their elections that we can get the kind of engagement we are seeking. The President has also said, look, we need to take stock of this in September. If there is a response, it needs to be on a fast track. We're not going to keep the window open forever.

But we're not just sitting here waiting for somebody in Iran to say, "Let's talk." We are working with our allies to make the case that we need to have prepared a very robust set of sanctions that we can get the international community to sign off on the way we did with North Korea. We are also, though, looking at an incentive package. We've got to be able to say to the Iranians, "Well, here's what's in it for you if you get back into the good graces of the international community on your nuclear program - you foreswear nuclear weapons, you take appropriate safeguards regarding any kind of civil nuclear program."

QUESTION: You've talked about that, the importance of making clear to the Iranians that they do have a right for a civilian nuclear program, but not for nuclear weapons.

SECRETARY CLINTON: Mm-hmm.

QUESTION: One potential solution, that in the past the Iranians have suggested they might be open to, is to have an Iranian enrichment capacity in Iran, but under permanent international supervision. Do you think that is a potential way out of this dilemma?

SECRETARY CLINTON: Well, that would not be our first choice. We would rather that the Iranians not have control and authority over the full enrichment and reprocessing cycle, that it be under the supervision of the IAEA, but in another country, Russia being the example that has often been discussed.

But these are the kinds of issues that would be part of the negotiations. There are certain safeguards that might be acceptable, but others that would, we know, be merely shammed. So trying to get to the full panoply of what could be available is part of what we're teeing up in the event there is such a negotiation.

QUESTION: I have to ask you a question that is of personal interest. Newsweek reporter Maziar Bahari --

SECRETARY CLINTON: Right.

QUESTION: -- has been arrested and is now going through what can only be called a kind of Stalinist show trial. What is your reaction to that?

SECRETARY CLINTON: Well, I am just appalled at the treatment that Mr. Bahari and others are receiving. It is a show trial, there is no doubt about it, and it has caught up journalists and clerics and former elected officials and even people in the current what was the government before the elections. And it is a sign of weakness. It demonstrates, I think, better than any of us could ever say that this Iranian leadership is afraid of their own people and afraid of the truth and the facts coming out.

We've expressed our concern about Mr. Bahari's confinement and now the trial. As you know, he's a Canadian, and we have certainly told the Government of Canada that we would be willing to do whatever is appropriate. They have thanked us for that, thanked us for our concern. They believe that they should take the lead on that and we're supporting them.

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QUESTION: But the relationship with Israel has been prickly*. I'll give you one example: You extended a kind a nuclear umbrella, the prospect of a nuclear umbrella, to Israel and potentially other countries in the Gulf. And we're talking about the Iranian nuclear program. The response from the Israeli Government was to criticize you, was to say that you were giving in to, you know, accepting an Iranian nuclear program. Were you surprised by their response?

SECRETARY CLINTON: Well, I think they misunderstood what I was saying. I said defense umbrella. I didn't specify what kind of defensive measures might be available to those in the region. But I clearly was sending a message to Iran, and we've obviously explained that to our friends in Israel.

But the message was to make clear to whoever is making decisions in Iran these days, particularly about something as important as their nuclear weapons potential, that if they believed that this would give them a more secure position, a greater capacity to influence events, to intimidate their neighbors, to expand the reach of their ideology, they were mistaken, that there was no chance in the world that even if they were to obtain that - and it was obviously prefaced and meant in that way because our position remains the same - we do not intend to accept nuclear weapons by Iran. We think that is unacceptable.

But for the sake of argument and for the sake of their calculus, if that is among their objectives, they need to think again, because they will render their position less secure, they will trigger an arms race in the region, and they will certainly put greater pressure on the United States to extend a defense umbrella in order to hem in and contain them. So I just wanted to be sure that they were thinking like we were thinking, and I think the Israeli response only looked at the fact that, "Oh my gosh, well, does that mean you're changing your policy, that now, somehow it's acceptable?" No, of course not; we think this influences the thinking inside Iran.

QUESTION: If you had to choose, which is worse: a Iranian nuclear weapons program or an American attack on Iran?

SECRETARY CLINTON: (Laughter.) Well, we have no intention to pursue the latter. This is something that is a very delicate and difficult issue to even contemplate. And yet at the same time, we are very concerned about Iran being a nuclear weapons state. And it's not going to surprise anyone that Israel views that as an existential threat, that many in the United States see that also as a direct threat to American interests.

But force should never even be contemplated except as a very last resort. We are still focused on our engagement. We're still focused on bringing international pressure. We're still focused on trying to effect the calculations of the Iranian Government. And we'll see where that leads us.

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