Interview by Bob Edwards on NPR's "Morning Edition"

SECRETARY POWELL: Good morning, Bob. How are you?

MR. EDWARDS: Good. On April 9th in Cairo, you said: "The United States recognizes that the Palestinian people view Chairman Arafat as their leader. I have said this repeatedly. It is up to the Palestinian people to decide who their leader will be." You have changed your mind?

SECRETARY POWELL: Well, what I said at that time was that Mr. Arafat had been anointed; but what we're saying this time, and what we have come to the conclusion on, is that he is not giving the Palestinian people, and his associates along with him are not giving the Palestinian people, the kind of leadership that they deserve, that they need really, to move forward and find peace. And it was reluctantly that we came to this conclusion, but it was the only conclusion we could come to.

And so the President and all of his advisors, considering the situation we were in where the violence is not getting any better and we did not see the right kind of action on the part of Palestinian leaders, and recognizing that Palestinians themselves in some areas were calling for reform and other nations were calling for reform in the region, we decided it was the right thing to do for the United States to make the clear statement that the Palestinian people should elect new leadership, find new leadership; and if they were to do so, then the United States stands ready to work with them and to work with Israel and with other parties in the region and the international community to move aggressively forward to create a state for the Palestinian people.

The President believes in this. I believe in it. I spoke to Mr. Arafat in April right after that statement that you just quoted that I made, and said to him that he had been moving in the wrong direction and it was time to make a strategic choice for his people. And unfortunately, that strategic choice has not been made. And we weren't going to keep -- we weren't going to move in positive direction unless changes are made, and the President called for those changes yesterday.

MR. EDWARDS: If the United States wants to support Palestinian democracy, how can it possibly say it won't recognize a state under Arafat's leadership, even if he is chosen in a free and fair election?

SECRETARY POWELL: What the President said, and what the United States says, is we do support democracy, but we don't believe that we are seeing the right kind of democracy, or democracy in action, now. It took Chairman Arafat six years to sign the basic law called for by the constitution. We see corruption in the Authority. We regrettably see that they have not taken strong action against terrorist organizations, even when it's within their capacity to do so.

And so as hard as we have tried to work with the leaders of the Palestinian Authority -- and I think I am second to no one in my efforts and the energy I've put into it -- it was not producing the kind of results needed, not just simply for peace, but for the Palestinian people. And so we have called on them to have elections. They are in the process of rewriting their constitution, and I sense that there is movement within the Palestinian community for new leadership and taking a look at the situation they are currently in. And we will see what they decide they want through these elections, and the United States will respect whatever they say as a people when these elections are held.

MR. EDWARDS: The President says he wants a Palestinian leader uncompromised by terror. Who in the Palestinian leadership would the United States consider uncompromised by terror?

SECRETARY POWELL: Well, we'll wait and see what constitutes the Palestinian leadership after they have rewritten their constitution and have their elections. I am not in the leastwise, nor was the President, suggesting that every Palestinian leaders is compromised by terror. I am confident that there are people within the Palestinian community who are responsible, who are committed to peace, who are against terrorism which is destroying their dream of a homeland. And we hope those leaders will emerge.

MR. EDWARDS: If Arafat is not replaced, then what?

SECRETARY POWELL: Well, we'll just have to see how that plays out. I mean, we will deal with the circumstances as we find them. But we hope that with the President's strong statement yesterday, and not just his strong statement with respect to the need for change in the Palestinian leadership, but what comes from that if we have responsible leadership that will crack down on terror, that will simply abandon these terrorist organizations in every way possible, and is willing to move forward with the United States and with Israel and with Arab nations and with the international community, there is a state waiting for them, which is what this is all about.

And the President went so far as to say that he would work to make it on a provisional basis as we moved forward toward a final settlement. And in that final settlement, the President said that the occupation would be ended, settlement activity would be stopped -- these are the requirements that we would place upon Israel -- and access would be opened up, and it would all be negotiated on the basis on the land-for-peace proposals in UN Resolutions 242 and 338.

An important sentence that the President had toward the tail end of his speech when he talked about the vision of a Palestinian state with final arrangements within three years, he said, "I and my government will work toward that goal." And that is President George Bush stepping up and making a personal commitment to the Palestinian people and to the people of the region, both peoples. The Israelis and the Palestinians need peace. They need to find a way to create a Palestinian state. It is as much in Israel's interest to have such a state as it is in the interest of the Palestinian people.

MR. EDWARDS: Is enough being asked of Israel here?

SECRETARY POWELL: I think quite a bit is being asked of Israel. But what is important here is that Israel has to have a responsible partner that is committed to cracking down on terrorism, ending terrorism, and negotiating in a responsible way without any suggestion that they are participating or supporting terrorist activity in any way.

Israel has made it clear -- and this is not the slightest bit unreasonable; we feel the same way -- that is it very difficult for them to move down a path to peace when bombs are going off every other day. It does not create the kinds of conditions.

And those who are setting these bombs off are not only trying to kill innocent Israelis, they're trying to kill the dream of a Palestinian state. And that is why we believe it is so much in the interest of Palestinian leaders, the Palestinian people, to reject this kind of strategy, reject these kinds of organizations, and bring in responsible leadership that will reject this categorically and crack down on it.

MR. EDWARDS: And when will you be returning to the region?

SECRETARY POWELL: I'll make a judgment on that in the days ahead. We've got a few things that we have to do first. The President, as you know, is going to Canada today to be with the leaders of the other industrialized nations, and they want to get a response from them. And I will be in contact with leaders in the region by telephone over the next several days and make an assessment of when I should return to the region, and for what purpose. And so there is some work that has to be done before I return, but I can assure you we're hard at work, beginning this morning, on moving forward on the President's vision.

MR. EDWARDS: Mr. Secretary, thank you.

SECRETARY POWELL: Thank you. Bye-bye.