Interview by Tony Snow on "Fox News Sunday"

And the President put a vision out there for the Palestinian people.  He is going to work hard for a state for the Palestinian people so that they can live side by side in peace with the Jewish state, Israel.  And if you look at the latter part of the President's speech, it's all in there:  final settlement, try to do it within three years; putting together institutions. 

We'll be there to help.  But it begins with new leadership that is fighting against terror, not tolerating terror or even encouraging terror.  And the conditions are rather stringent on the Palestinian people, but at the same time there are conditions for the Israeli side too as we move forward.  But we've got to end the terror and the violence to move forward. 

MR. SNOW:  I want to go through all those things, but very -- I want to be clear on the status of Arafat.  We will not deal with him?

SECRETARY POWELL:  At the moment, we are not dealing with him.  I have --

MR. SNOW:  How about in the future?

SECRETARY POWELL:  I don't expect so, because his leadership is flawed.  Now, we understand the Palestinian people will, through free and fair elections we hope, choose who their leaders will be.  But if they don't bring in new leaders, then we shouldn't expect new approaches.  And we think that what we have to spend our time doing over the next several months until those elections is to help other Palestinian leaders to rise up and to begin transformation within the Palestinian community.  I hope Palestinians will look at the situation they find themselves in and examine the leadership they have been receiving over the years, and make a judgment that perhaps they can do better.

MR. SNOW:  Do you think Arafat's constituency is falling away? 

SECRETARY POWELL:  I don't know.  I would hope that people are starting to look at the leadership he has been providing and say to themselves, "What have we got?  We're trapped in our cities and villages, we are further away from our vision of a Palestinian state than we ever were.  We are condemned by the world for the terrorist actions of a few of us."  As the President said, these are gifted and talented people.  If they had gifted and talented and forward-thinking leadership, perhaps we can move forward.

MR. SNOW:  Are we meeting or talking right now with any representatives of the Palestinian Authority?

SECRETARY POWELL:  Yes, we talked to a variety of Palestinian leaders.  We have had no conversations with Chairman Arafat since the President's speech.

MR. SNOW:  If -- when you go back to the region, do you intend to speak with Chairman Arafat?

SECRETARY POWELL:  I am determining my plans now.  Right now, I have no plans to speak to Chairman Arafat.  But we are sending Assistant Secretary of State Bill Burns to London on Tuesday, where he will meet with members of the Madrid Quartet, our European partners and the United Nations, and he will meet with others.  And I expect that in the not too distant future, after this first set of meetings, I will also be meeting with principals of the Madrid Quartet as well as Arab leaders.

MR. SNOW:  And the conventional wisdom is if those meetings go well, the next trip is to the Middle East, correct?

SECRETARY POWELL:  If those meetings go well, let's take it a step at a time.  I mean, a lot has happened in recent weeks.  The reality of the situation is that we worked very hard for 18 months to try to get this peace process started -- with the Tenet plan, the Mitchell plan, the President's speech at the UN, my speech in Louisville, sending General Zinni in -- and at every step it was thwarted by violence and terror. 

And Chairman Arafat simply did not provide the kind of leadership necessary to move forward.  We recognize his position within the Palestinian government, within the Palestinian community, but leadership comes with responsibility, and responsibilities to lead your people in a new, positive direction.  And Chairman Arafat has not done that.

And I might point out, Tony, that two months ago when I visited Chairman Arafat when he was trapped in the Muqatta in Ramallah with Israeli troops all around to him, I said to him, "Mr. Chairman, when this siege is broken and when you once again have the ability to move about, you must make a positive change, you must move in a new direction, or else the United States will not be able to help you."  He has not moved in that new direction.  Quite the contrary, every time we got something going, the terror came back and Chairman Arafat was not doing enough to end the terror, either through the power of his voice, his position within the Palestinian community, or the use of the institutions that were available to him.

MR. SNOW:  There was a meeting in Iran earlier this year.  It included representatives of Hamas and Hezbollah, Islamic Jihad, the Popular Front for the Liberation of Palestine, and the Palestinian Authority.  Is the Palestinian Authority part of the terror network right now?

SECRETARY POWELL:  I don't know that I would go that far, but it's clear that there are elements within the Palestinian Authority and people within the Palestinian Authority who are aware of terrorist elements within the Palestinian community and could be doing much more about it than they have.  And that is of concern to us. 

MR. SNOW:  Tanzim, the Fatah militia.  Are we going to put that on our terrorist list?

SECRETARY POWELL:  I don't know the status of that one.  But I'm pleased that the European Union, for example, joined us recently in putting the al-Aqsa Brigade and a number of others on their terrorist lists.  So we're constantly examining these.

But all of these various security organizations that are related to the Palestinian Authority which actually participate in terrorist activities, they have got to be dealt with.  They are not only killing innocent Israelis, they are destroying the dreams of the Palestinian people.  And we're looking for new Palestinian leaders who recognize this reality and are willing to work under this reality and do somebody about these organizations.

MR. SNOW:  What are we going to do to ensure free and fair elections? 

SECRETARY POWELL:  Well, we hope that Palestinian leaders will be able to work with us -- not Chairman Arafat.  I don't see that as a possibility.  But there are other Palestinian leaders who are expressing some reservations about the kind of leadership they have received in recent years who are beginning to step forward.  It's not just the United States who sees the problem here.  The Europeans realize that this is a problem. 

And within the Palestinian community, we are starting to see signs that some leaders recognize that the leadership that has been provided by the Chairman has not been taking them in the right direction.  And we hope those leaders will surface and we will have an election and a process that will spread power out beyond just one person, the president, and other institutions will start to come up that will be more responsible and give us other leaders we can work with.

MR. SNOW:  Isn't it true that a number of our Arab allies, some of whom support Yasser Arafat publicly, have been telling you and the President privately they've had it with him? 

SECRETARY POWELL:  It's quite true that a number of Arab leaders have examined the situation, just as we have, and realized that Chairman Arafat has not been providing the kind of leadership that we need to see in this very difficult set of circumstances, and they recognize that perhaps new leaders would be better.  And they have not been as forthcoming as we have, but the United States and President Bush particularly has a way of speaking candidly and directly about the reality of a situation:  the truth.

MR. SNOW:  Al Gore gave a speech last night.  I want to show you part of the speech because he is criticizing your administration's handling of affairs in the Middle East and also the war on terror:

"President Bush, unfortunately, has allowed his political team to use the war as a political wedge to divide Americans.  They haven't gotten Usama bin Laden or the al-Qaida operation and they have refused to allow enough troops from the international community to be put into Afghanistan to keep it from sliding back under control of the warlords."

Your reaction?

SECRETARY POWELL:  With all due respect to former Vice President Gore, that's patent nonsense.  We have a good situation in Afghanistan.  We have gotten rid of the Taliban. Al-Qaida is on the run, and we'll chase them down.  It's time-consuming.  I notice the previous administration didn't even make a serious try at it.

And we have just seen a Loya Jirga which continued the authority in Kabul under President Karzai, and we have 12,000 troops there under Operation Enduring Freedom going after the Taliban remnants and al-Qaida, and we have an International Security Assistance Force in Kabul and we are constantly reviewing the security situation in the region.  Hundreds of millions of dollars are going into the reconstruction of the Afghan society.  We have pulled together a very effective international coalition to help the people of Afghanistan achieve a better future.

MR. SNOW:  There were reports today that there's a handwritten note from Usama bin Laden to one of his lieutenants after the Tora Bora bombings, indicating that he certainly survived that.  In addition, there's an op-ed piece today in The Washington Post by Monsoor Ijaz and also a former American ambassador to Sudan arguing that the Sudanese had offered -- here, just read part of it.  It's from Tim Carney and Monsoor Ijaz and here's a quote:

"Three months later, after offering to hand bin Laden over to US authorities, Sudan expelled him.  Sudan gave US authorities permission to photograph two terror camps.  Washington failed to follow up.  In August, Sudan" -- this is back in the '90s -- "sent an olive branch letter to President Clinton through Ijaz.  There was no reply."

SECRETARY POWELL:  Well, perhaps that's what Vice President Gore should have been talking about, what happened on their watch, as opposed to the progress we've made on our watch, not only in Afghanistan, but I would also submit in Sudan.  We recently sent as a presidential emissary to Sudan Senator Jack Danforth.  He had very successful trips there.  We now have a policy with respect to Sudan that will start to move them in the direction of cooperating with us in the campaign against terrorism, and to move forward to find a peaceful solution to that terrible crisis in the Sudan.

MR. SNOW:  I want to get your reaction to a couple of things that came out from various sources in the Palestinian areas this week.  First, there was an opinion piece in the official state newspaper.  It talked about you and Condoleezza Rice.  Let's see a quote from that particular piece.  It refers to you both as "colored people."  Here it is:

"Secretary of State Colin Powell and National Security Advisor Condoleezza Rice…These are colored senior officials.  These colored senior officials are part of the Third World, even if only due to the color of their skin.  The Black Lady always makes a point whether the opportunity presents itself or not of denouncing the Palestinians, causing regret to every Arab who was optimistic about her arrival on the political scene."

SECRETARY POWELL:  I'm not going to comment on nonsense like that.  Condoleezza Rice and Colin Powell are representatives of the American people, the United States Government and of President Bush, and our job is to give our best advice to the President and to speak clearly on behalf of the American people.  The fact that we are also black and African American make us proud to represent our country and African Americans, but first and foremost I am the Secretary of State of the United States of America, Condoleezza Rice is the National Security Advisor, and that's the role we play.  So this kind of sort of racial profiling, so to speak, or epitheting, is of no consequence. 

MR. SNOW:  Also, a picture of a young child dressed up as a suicide bomber.  It's been seen all over the world. 

SECRETARY POWELL:  It's horrific to think that people would in some way attribute any merit to this kind of an image.  It's disgraceful.  And this is the kind of thing that Palestinian leaders and Arab leaders have to fight against, and the whole civilized world has to condemn and fight against.

MR. SNOW:  It was interesting.  In the President's speech he did not mention Saudi Arabia.  The Israeli Defense Forces have come up with this series of documents -- I have them here and I'm told that they've been sent to the State Department -- that indicate that there have been large sums of moneys transferred from Saudi Arabia to a number of terrorist organizations. 

We are showing on the screen right now a translation of one of them.  It lists a number of suicide bombers, the dates on which -- the dates and locations on which their acts took place, and then the family payments, which are in Saudi riyals. 

Are you persuaded that the Saudi Government is doing everything it can to stop financing terror and stop Saudi citizens from doing so?

SECRETARY POWELL:  Well, first of all, with respect to references to Saudi Arabia in the President's speech, there was not a specific reference but I think as you know, Tony, we have been very appreciative of the role that Saudi Arabia has played, and especially Crown Prince Abdullah, in putting forward a vision for the Palestinian people of how we can find a solution to this crisis.

With respect to payments to organizations such as Hamas and similar organizations, we have spoken to our Arab friends, and the President has made reference to this in his speech, that this kind of payment should stop.  I haven't seen that specific piece of paper, but from what I see of what you put on the screen, the Saudis would say that they are not giving it to an organization, they are giving it to individuals in need.  Nevertheless, I think it's a real problem when you incentivize in any way suicide bombings.

MR. SNOW:  Forty-six Americans being held against their will in Saudi Arabia for one reason or another.  That has led to letters from several Members of Congress.  Here's one of the letters.  It was signed by 23 senators, including Trent Lott and Senate Majority Leader Tom Daschle:

"Mr. Secretary, we urge you in the strongest possible terms to intervene forcefully and in person with Saudi authorities at the highest levels to secure the prompt release and repatriation of Alia and Aisha Gheshayan."

Now, this is a case that's been going on for some time.  You're aware of it.  It goes back to the 1980s.  These girls were taken by the father when they were ages three and seven.  Now they're 18 and 22.

SECRETARY POWELL:  It is an issue that we discuss with the Saudis on a regular basis.  One of the perhaps little-known stories in the diplomatic world right now is that in a number of nations we have custody problems where children have been taken away from American parents or an American parent, taken back to their home country, and then the laws of that country make it difficult for us to get the right kind of access.

This particular case is well known to me and we have raised it with the Saudis on a number of occasions, but we still have not found a resolution where the children, the girls, can be in a relationship with --

MR. SNOW:  Will we tell members of the father's family they can't come here unless his daughters get a chance to be repatriated with their mother? 

SECRETARY POWELL:  Say that again?  I'm sorry, Tony. 

MR. SNOW:  Tell members of his family -- earlier there was a threat that they wouldn't get visas to come to the United States, and that seemed to create some pressure on the father.  Is that one of the moves we might want to make? 

SECRETARY POWELL:  It could be.  I don't have the specifics of our current visa status on that family. 

MR. SNOW:  All right.  Secretary of State Colin Powell, thanks for joining us today.

SECRETARY POWELL:  Thank you, Tony.