Press Availability With U.N. Secretary General Kofi Annan; Foreign Minister Igor Ivanov of the Russian Federation; Foreign Minister Per Stig Moller of Denmark in the Capacity of EU Presidency; and Javier Solana, High Representative for Common Foreign and Security Policy of the EU

We welcome the President's commitment to active US leadership toward that goal. We remain committed to implementing the vision of two states, Israel and an independent, viable and democratic Palestine, living side by side in peace and security. We pledge all efforts to realize the goals of reform, security and peace, and reaffirm that these efforts in the political, security, economic and humanitarian and institution-building fields must proceed hand in hand.

We again welcome the initiative of Saudi Arabia, endorsed by the Arab League summit in Beirut, as a significant contribution towards a comprehensive peace. We welcome the strong Palestinian interest in reform, including the 100-day reform program, as well as the willingness of regional states and the international community to help Palestinians build institutions of good government and democracy in preparation for statehood.

We agree to the importance of coordinated international campaign to support reform. The new Task Force on Reform includes, besides our own representatives, those of Japan, Norway, the World Bank and the IMF. It will work under Quartet auspices to develop and implement a comprehensive reform action plan.

We commit ourselves to help the parties renew dialogue, and we welcome the recent high-level ministerial meetings between the Israelis and the Palestinians. We agreed on the need to build efficient Palestinian security capabilities to combat terror on sound bases of unified command, transparency and accountability.

We also note Israel's vital stake in Palestinian reform. We call on Israel to take concrete steps to support the emergence of a viable Palestinian state. Recognizing Israel's legitimate security concerns, these steps include easing internal closures and withdrawal of forces to their pre-September 28th, 2000 positions as security improves through reciprocal steps.

Moreover, frozen tax revenues should be released. In addition, Israel must stop all new settlement activity, as recommended by the Mitchell Commission. We reaffirm that there must be a negotiated permanent settlement based on Security Council Resolutions 242 and 338. There can be no military solution to this conflict. The Israeli occupation that began in 1967 must end, and Israel must have secure, recognized borders.

We reaffirm our commitment to a comprehensive peace between Israel, Lebanon and between Israel and Syria. We are looking forward to our talks with the Foreign Ministers of Jordan, Egypt and a representative of Saudi Arabia later today. And we'll be talking to other regional partners very soon.

We will continue close consultation among ourselves, and as we agreed in the Madrid Declaration. Our envoys will continue their work on the ground to help restart political dialogue and to reach a solution to the questions at the heart of the conflict. We have spread support for the convening of a further international ministerial meeting at an appropriate time.

And finally, this morning Prime Minister Sharon told me that he wanted to see a worldwide humanitarian operation to alleviate the plight of the Palestinian people. Of course, we shall have to find out more details about that, but meanwhile the Quartet agreed that full, humanitarian access would be the fastest way to begin improving the plight of the Palestinians, and as such was welcomed, though it is not a substitute for all the other steps that the international community has been urging.

The UN, with the full support of the Quartet, agrees to lead this effort. Thank you very much. I will now take your questions.

QUESTION: That sounds pretty much like the President's policy, except there's no reference to Yasser Arafat.

Mr. Secretary, could I ask you if there was any discussion of Yasser Arafat's future? The United States seems to be alone in thinking it would be wise for him to step aside, but you recently, twice now, have suggested maybe there's some role for him. So, could you tell us if you discussed Arafat's future, and what do you personally think that future might entail?

Thank you.

SECRETARY POWELL: We didn't have -- we didn't discuss his future. Obviously, he was mentioned in our discussion, but the bulk of our discussion dealt with the Palestinian people and the path that we have laid out to get to a settlement.

Our concern right now is not about an individual, but about a difficult situation where people are in need. We welcome Prime Minister Sharon's offer earlier this morning to the Secretary General to see if we can get an international effort underway to help the Palestinian people. And we spent most of our time talking about the task forces that we have set up, the working groups that will be within that task force.

I reported on the security work that we have been doing under Director Tenet and how we're ready to operationalize that security plan and get with the two parties to bring it into being and to help the Palestinians restructure their security forces. So most of our time was spent on real concrete things, and we did not spend a great deal of time on personalities.

With respect to Mr. Arafat, this is a choice, a decision that ultimately will have to be made by the Palestinian people. As the President has said, the leadership that they have enjoyed in recent years has not brought them any closer to a Palestinian state. And once again, we saw this morning the effect of this kind of terrorist activity, which takes the lives of innocent Israeli citizens and, at the same time, damages the hopes, if not destroys the hopes, of the Palestinian people to achieve a state of their own. And we once again condemn this kind of terrorist activity. So this is about finding a way forward and not about personalities.

SECRETARY GENERAL ANNAN: You indicated that it sounded like the President. I mean, perhaps what you meant is the fact that we all share the end objective of two states living in peace, side-by-side. What we have to do is to work out how we get there. What is the operational pathway that gets us to that goal in three years time? And this is what part of this effort has been about.

As for Arafat, we all have our respective positions. The UN still recognizes Chairman Arafat and we will continue to deal with him until the Palestinians decide otherwise.

QUESTION: Did you discuss in detail some sort of a roadmap to that path for resettlement, Mr. Secretary, as you referred to it, and Mr. Secretary General, what you've called operational? Have you agreed as to how do we go from here to the end game that you said '67, the end of occupation, '67 parallel approach or not? Is it still security first or are you doing political?

SECRETARY POWELL: There have to be three tracks going forward: there has to be a security track; there has to be a humanitarian and economic development track; and there has to be a political track. Everything really, though, begins with creating a better sense of security -- a better handle on the security situation in the region. And so that's the one we'll be moving out more aggressively on in the days and the coming weeks.

But this is not to say that we are ignoring, or in any way putting in a secondary position, the need for the humanitarian and economic track. And as you have heard the Secretary General discuss, we've created a task force, working groups, and a schedule for those working groups to move forward with their transformation activities, and we'll start to make presentations to the Palestinians as to how we think we should move forward.

With respect to the political track, we have the vision that is out there that we all agree to: to see if it's possible to get to a final settlement in three years. But it begins with finding a more stable situation with respect to security.

So all three tracks are there. I wish they could all move in parallel. But until we get a better handle on the security aspect of it, and until we get a little more movement on the humanitarian side of it, they will be parallel, but they will not exactly be in synchronization with one another. But all of them are important, and we know that ultimately we must arrive at a political settlement to this conflict because, as we all agree, and as the Secretary General said a moment ago, there is no military solution to this conflict.

SECRETARY GENERAL ANNAN: Now, I think what I will add, I agree with everything that Secretary Powell has said, but only to add that we all agree that we should work on security, but even if the security track gains some traction, unless we show some progress on the other two tracks, that will not work. That would also fail. And so in effect, in answer to your question, yes, we are moving on security, but we also need to show progress on the other tracks.

QUESTION: For Secretary Powell, who says when enough progress has been made on the security front for Israel then to take the steps that others have been calling for it to take? And we've heard also from the Secretary General. I'd like to ask the Russian Foreign Minister and the European representatives if you could comment on whether or not you think Yasser Arafat should go, as the US has called for?

Thank you.

SECRETARY POWELL: Obviously we will have to see improvement on the security track, and then in consultation with all the parties. And I hope as we begin to operationalize the security arrangement that we have in mind, the plan that we have in mind, we'll be able to develop confidence between the two sides so that they can begin talking to one another again with the help of outsiders assisting them from the United States and other nations. And I think that process will put in place conditions that will allow all of us to make a judgment as to whether or not it is appropriate for Israel to respond in kind.

Obviously Israel is a sovereign country and will have to reach its own decisions and make its own conclusions. But from what I know of the Israeli attitude and my conversations with the Prime Minister and others, and just making reference to the conversation that the Secretary General had with the Prime Minister earlier, he is anxious to move forward as well. I don't think he wants to see the Israeli Defense Force serving as an occupying force with all the responsibilities that come with that kind of a role for the indefinite future. It is in his interest to find a way to move forward, just as it is in our interest and the interest of the Palestinian people.

FOREIGN MINISTER IVANOV: It is only for the Palestinians to decide whom they want to have as their leaders. It is the sovereign right of the Palestinian people.

As for Chairman Arafat, he is the legitimately elected leader of Palestine, and while he is in this capacity, we'll continue to maintain our relations with him.

FOREIGN MINISTER MOLLER: We talk to the leader of the Palestinian people, and it's up to the Palestinian people to decide who is their own leader. They will have an election, and then we will see who will become leader after the election. But whoever is leader is the person that the European Union will be talking to.

Then let me comment upon this track. It's very important that security track is developed. It's very important that United States engagement in this security track. But I think, too, that it is important that people who have committed those atrocities in Nablus cannot stop the process towards security, political reform and better social lives in Palestine.

So I think it's very important that those people who are trying to destroy the peace, because they will not accept the existence of Israel, cannot win the day. So that's why we must keep the security and the reform and the social progress approximately side by side; otherwise, it will turn wrong once more and once more and once more again.

QUESTION: You say that you support the President Bush initiative. Does that mean that you all support that what President Bush has been saying, that this -- eliminating Arafat out of his place, or he is not leader, or anything like that?

SECRETARY GENERAL ANNAN: I think we have answered that question already. But basically we are talking about the objective of two states living side by side, end of occupation, end of settlements, end of terror and suicide bombing, reforms, including elections, is the package of goals we have agreed on.

QUESTION: I have a question for Foreign Minister Ivanov and Secretary Powell. Have you discussed or planning to discuss the issue of Iraq? And to what extent do you think any factor of destabilizing the region would be dangerous, and how that would be affected -- how the Arab-Israeli conflict would affect the issue of Iraq?

And Secretary Powell, do you see the US moving regardless of any advice from friends like Russia or the international community in regard to a change of regime in Iraq?

Thank you.

SECRETARY GENERAL ANNAN: For once the question is not addressed to me on this issue. (Laughter.)

FOREIGN MINISTER IVANOV: Well, the Iraqi settlement issues were not on the agenda of today's meetings; therefore, we did not consider this subject. But we maintain constant, permanent exchange of opinions on the Iraqi settlement issue. And the Russian Federation undertakes efforts to find a political solution for this matter.

We believe that based on the relevant resolutions by the UN Security Council, we have an opportunity and we should make maximum use of this opportunity to find a political solution for the settlement of the situation which would stabilize the situation in the Persian Gulf and in the Middle East as a whole.

SECRETARY POWELL: The only thing I would add is that President Bush has said all along that he would consult closely with our friends on the subject of Iraq, and we have stayed in close consultation with our Russian colleagues. And Presidents Putin and Bush have discussed this, but we have not discussed it this morning as part of this conference.

QUESTION: Secretary Powell, could you give us some more details about what do you mean about operationalizing new security arrangements? George Tenet hasn't been in the region in some time. I'm not aware of any activity that's been going on.

Also, did you raise with your colleagues concerns about money going to the Palestinian Authority? Did you ask the EU in particular to stop funneling money through the PA, and what was the response?

Thank you.

SECRETARY POWELL: With respect to my comment on operationalizing a security arrangement, we have been making plans. We have been putting together some concepts that we have shared with others. It doesn't always require a trip by somebody to go someplace in order to get something done. And Mr. Tenet has been deeply involved in it, as have other members of his staff. And so we have some rather concrete ideas that we'll be presenting to the sides in the very near future.

We did discuss the issue of funding, but I would yield to my European Union colleagues for whatever they would wish to say about that.

Javier.

MR. SOLANA: The second part of the question, the only thing I want to tell you is that the donors community's resources that go to the Palestinian Authority, including the European Union, has more controls than any other donors community contributed to any other country in the world. That, I think, answers the question.

SECRETARY GENERAL ANNAN: Thank you very much.