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QUESTION: About Iran, sir. There are news reports today, you know, mentioning that Iran announcing officially that they will go back to their nuclear programs whatever are the results and the consequences. Any comment today?

MR. MCCORMACK: I have seen some news reports that -- from anonymous foreign diplomats that Iran intends to resume uranium conversion at its Isfahan plant. I think if true, this is yet another step that takes Iran in the wrong direction and serves only to further isolate Iran from the international community. What Iran should be focused on is working with the IAEA to resolve the long list of questions that the IAEA and the international community have concerning their nuclear program.

I think we have spoken out many times and the international community has spoken quite clearly, and most recently in the Board of Governors vote, to refer the issue of Iran's failure to comply with their international obligations to the Security Council. Now that referral takes the form of an IAEA report. We know that there's going to be an IAEA report that gets sent to the Security Council. What is contained in that report, in terms of Iran's cooperation with the IAEA, as well as where they stand with their negotiations in the EU-3, are going to be quite important, I think, for the Security Council and the international community, the IAEA Board of Governors in determining what next steps there are with regard to Iran in its pursuit of nuclear weapons. These are serious issues and really it is incumbent upon Iran now to answer the questions. And if true, acts like resuming uranium conversion are things that take Iran in the wrong direction. So again, I will withhold any sort of final comment on this, as I said, I'd seen the news reports but it's based on an anonymous sourcing.

QUESTION: Are you referring -- you've seen reports of Iran withdrawing people, experienced --

MR. MCCORMACK: No, no, no. I'll come back to that, Barry.

QUESTION: Okay.

MR. MCCORMACK: If others have questions no this particular point.

QUESTION: But here in Washington, so far you've never seen any -- what the Iranian moved so far to let you think that the issue can be resolved in different manner, peacefully through dialogue.

MR. MCCORMACK: Well, we are on a track to resolve any differences through diplomatic means. I think we have made that very clear. Secretary Rice, personally, has devoted a great deal of time and attention to this issue. Under Secretary Burns, along with Under Secretary Joseph, are our two point people on this issue, working with the IAEA, working with the EU-3 to resolve this through diplomatic means.

And we have, I think, achieved some important steps forward on the diplomatic front. If you look back at the IAEA Board of Governors, the most recent IAEA Board of Governors vote, you had a significant number of countries voting affirmatively to send -- to refer this issue to the Security Council, via a report from the IAEA. The only country that voted with Iran on this issue, voting against the resolution was Venezuela. So Iran finds itself more and more isolated on this issue. And certainly we have called for them to cooperate with the IAEA and to return to serious negotiations with the EU-3 so this can be resolved through diplomatic means.

Did you have one, Saul?

QUESTION: Yes, (inaudible) on this. Did the general idea of there being a long list of questions that are outstanding, were you at all surprised by the tone of El Baradei's remarks yesterday in this country? He's basically saying, you know, while there's progress, while there's cooperation and despite their rhetoric, we do have those things, we should, you know, let the investigation go forward and then he says, we don't need to go to escalated measures yet. It seems to, sort of, be reining in any move to report Iran to the Security Council. Did you feel that? Do you feel you're being tugged back by him?

MR. MCCORMACK: I saw his remarks, Saul, and I don't get that sense. I get the sense that he, as well as other members of the Board of Governors are interested in devoting quite a bit of energy to the diplomatic process, to try to resolve these issues through diplomatic means, through the IAEA, through negotiations with the EU-3.

It's no secret that, you know, our belief, based on Iran's track record of not cooperating with the IAEA and its trying to slow walk negotiations with the EU-3, that it is entirely possible that the matter could be referred to the Security Council. We've certainly been clear about that. But we are working patiently. We are working in a focused manner with members -- fellow members of the IAEA Board of Governors and with the EU-3 on this matter. We have made progress on the diplomatic front. But, you know, what needs to happen is there needs to be Iranian cooperation. There shouldn't be any partial credit here, half measures of cooperation are not what is needed from Iran. What Iran needs to do is they need to cooperate in full with the IAEA. They need to return to the negotiating table in a serious manner with the EU-3 and that's what we're calling on.

QUESTION: Well, on that -- can I follow up?

MR. MCCORMACK: Elise, yeah. Sure.

QUESTION: On that note, I mean to go to the issue of the ambassadors and how Iran announced that it was going to --

MR. MCCORMACK: Well, okay, go ahead.

QUESTION: Well, I mean, it announced that --

MR. MCCORMACK: Hold on, one second. Is there anything else on the nuclear issue before we jump to the ambassadors? Did you have a follow up, Saul?

QUESTION: Well, if I recall correctly, after the meeting Lavrov, the Secretary in one of her news conferences said that what she got from the Russians was that they were prepared to explore ideas about how to, you know, get the Iranians to comply. Now, is one of those ideas, as is being reported, that Russia would actually have a joint venture on Russian soil with Iran and this would kind of be a substitute for the Bushehr project? Is that an idea that you would welcome?

MR. MCCORMACK: Well, we have talked about -- and the Secretary has talked about this quite a bit -- our particular concern with respect to the Iranian nuclear program. And that particular concern is that they not -- that Iran, because of their past behavior in terms of misleading the IAEA and the rest of the world about their nuclear program, that they not have access to the technology and the know-how to do reprocessing or enrichment on their soil because that is one of the crucial pathways to being able to build a nuclear weapon. So that is a very particular concern, though not exclusive concern that we have. We have pointed to the deal that Russia negotiated with Iran as a positive step forward in addressing not only our concerns but the rest of the world's concerns that Iran not have access to that technology and that know-how on Iranian soil.

We have had continuing discussions with the EU-3 and also with Russia on how to approach the issue of Iran having access to those conversion technologies and know-how, as well as the enrichment and reprocessing technology and know-how. Those discussions, I think, are ongoing. I expect that they're going to continue up through and including the IAEA Board of Governors meeting.

But what needs to happen is you actually need to -- in order to discuss these issues with Iran, you need to have a negotiating partner. And the EU-3 currently doesn't have a negotiating partner because Iran won't return to the talks with the EU-3. If Iran returns to the talks -- negotiations with the EU-3, in a serious manner, I'm sure that there will -- there's a potential for a productive discussion to - again -- to try to resolve this issue through diplomatic means.

You know, I'm certainly not in a position to preview any discussions we've had with the EU-3 at this point, but a prerequisite for any negotiations would be for Iran to return to those negotiations. They haven't chosen -- they have chosen not to do so up until this point.

QUESTION: Sean, on Iran. It's not the only nuclear -- can you confirm, according to the reports, that Iran is also supporting terrorism in Iraq and also al-Qaida -- financing al-Qaida's investing in many countries, including recent statement that wipe out Israel from the world map?

MR. MCCORMACK: On the last of those, we've commented several times. I don't have anything new to offer. You've heard from the Secretary on that as well.

In terms of Iran's support for terrorism, we issue an annual report and Iran is, according to our assessment, a state sponsor of terror -- an active state sponsor of terror -- which is destabilizing to the region and also destabilizing behavior beyond that. Of course, we call upon Iran to end its support for terror and join the rest of the world in fighting terrorism as opposed to supporting it.

Sylvie.

QUESTION: Can we go to the ambassador question?

MR. MCCORMACK: Okay. Is there anything else on this subject?

QUESTION: Just one question.

MR. MCCORMACK: Yes.

QUESTION: Tony Blair again saying that the military option isn't even under consideration. I just wonder, wouldn't it be helpful if the U.S. said something similar if it was a way of getting Iran sort of back into the negotiations somehow?

MR. MCCORMACK: I wouldn't necessarily make that a prerequisite for Iran getting back into the negotiations. They can certainly choose to do that on their own and they should. On this question, the Secretary had an interview with the BBC and I don't have anything to add beyond what she said at that point on the matter.

QUESTION: Okay. So Iran recalled some of their ambassadors today. They did a big reshuffle of their diplomacy, especially two ambassadors in Paris and London who were assigned by the former president, reformer. Do you have any comment on that?

MR. MCCORMACK: I've seen the news reports of this. At this point, I don't have anything -- any particular read on that action beyond the fact that it's a reshuffling of overseas representatives. We'll see, based on Iran's actions and what they have their diplomatic representatives do around the world, what kind of regime this is. We have several data points now as to what the truth face of the regime of President Ahmadi-Nejad is about in terms of its world view, its policies. We saw that at his speech at the UN. We saw that at his recent remarks in which he called for wiping Israel off the face of the map.

I think that we're -- through these remarks, starting to see the true face and the true values of this particular regime. We'll see if this action has any -- is a deeper indication of the intent and the policies of the regime. But at this point, I can't ascribe any particular motive to it beyond the fact they're reshuffling their ambassadors.

QUESTION: Sean, can I follow up?

MR. MCCORMACK: Sure.

QUESTION: Some of the ambassadors that they've announced that they're going to recall include the ambassador to the United Nations who is seen more as a moderate and has been instrumental in the negotiations on the nuclear front, the ambassador to London and Geneva also seen as moderate and West-leaning. Are you afraid -- you talk about that you've made some diplomatic progress -- it was with these diplomats and are you including others, of course, but these were involved -- and are you concerned that these moves might actually hinder the diplomatic traffic you're trying to go along?

MR. MCCORMACK: Well, again, we'll see what Iran -- who they replace these ambassadors with and what they ask them to do, what actions they take. Certainly, it would not be a positive step if Iran, through its appointments and what it asks those ambassadors to do, further isolates itself from the rest of the world. I don't think that's good for the Iranian people and I don't think that's good for the rest of the world, given Iran's destabilizing behavior on several different fronts. So we would, again, encourage them to engage in a responsible manner with the EU-3 and the IAEA, stop its support of terrorism, stop oppressing their own people, and we'll see what Iran does.

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