MR. STEPHANOPOULOS: Good morning, Mr. Secretary.

SECRETARY POWELL: Good morning, George.

MR. STEPHANOPOULOS: The strategy of the insurgents is very clear right now. Anyone collaborating with the government is a target. When I talked to President Yawer, he said that the government is going to need help. They want to take responsibility for security, but they're going to need help. What can they expect from the U.S. and other NATO countries?

SECRETARY POWELL: They can expect the continuing presence of 138,000 U.S. troops and more thousands of troops from coalition nations. Some 16 of 26 NATO nations are represented there. With the new UN resolution and with a sovereign government taking over, there may be some additional troop contributions.

MR. STEPHANOPOULOS: But that's not likely.

SECRETARY POWELL: But I'm not expecting large troop contributions. There may be some marginal additions to the troop presence. The real solution to the security problem is for Iraqi forces to be trained as quickly as possible: police forces, the Iraqi national army, the civil defense forces, border patrols. And we are working as hard as we can to increase Iraqi capabilities. They're the ones who really have to take charge of their security.

MR. STEPHANOPOULOS: At Sea Island, the President mentioned that maybe this is a job that NATO can take on. Are you making any progress with that?

SECRETARY POWELL: I don't think the President ever implied, nor should any of us think, that there are large bodies of NATO troops that are sitting around, waiting to go somewhere. There are not. NATO is occupied in the Balkans. NATO has, as its first priority, our efforts in Afghanistan.

And so, as I said, 16 of 26 NATO nations are in Iraq now. But NATO might be able to take on some additional responsibilities with respect to police training, with respect to, perhaps, some headquarters' activity they might be able to perform. But we are not expecting NATO to come forward with large numbers of additional troops. There are not large numbers of additional troops that are readily available. And some countries have said that they are unable to provide them and won't send them, like France and Germany.

MR. STEPHANOPOULOS: In the interview, President Yawer also said that he wants to keep Abu Ghraib. He said it would be unwise, reactionary, and a waste of money to destroy it. The President in his speech just a couple of weeks ago said he did want to destroy it.

SECRETARY POWELL: He said if that's what the Iraqi Interim Government wanted. We have to all realize that on the 1st of July, there is a real government that is in charge of Iraq, the Iraqi interim government, led by President Yawer and Prime Minister Allawi, and if they choose --

MR. STEPHANOPOULOS: So it stays?

SECRETARY POWELL: Yes, it's theirs. And if they choose to keep it, then they will keep it. The President made that clear when he made his statement, as well. He thought it would be a good symbol to destroy it, but he made it clear that it was a decision that the Iraqi sovereign government has to take.

MR. STEPHANOPOULOS: The President also said that he would prefer if an international group, like the Red Cross, came in to investigate the whole scandal at Abu Ghraib. Wouldn't that be the best way for the United States to convince the world that we have nothing to hide?

SECRETARY POWELL: Well the ICRC is not an investigatory body, in the sense of looking over -- looking at a total situation. They have a unique role to play, and they play it very well. We have a number of investigations underway within the Pentagon, and I think we should let all of those investigations proceed. Congress is providing an oversight function, and let it continue to do that, and I think all of the facts and the truth will be clear and will come out.

MR. STEPHANOPOULOS: Let me turn to Saudi Arabia. Do you have any update at all on Paul Johnson, the American who apparently was kidnapped yesterday?

SECRETARY POWELL: We know that one American was killed and one American kidnapped. I'm waiting for a final confirmation and notification of next of kin before confirming the names, but those names are out in the public now. I don't have any additional information with respect to who is responsible for the killing of the first American or the location of the American who has been kidnapped.

MR. STEPHANOPOULOS: But there does seem to be stepped up activity in Saudi Arabia right now, and all Americans appear to be targets. Is it simply too dangerous now for any American to be in Saudi Arabia?

SECRETARY POWELL: Well, as you know, we have ordered departure -- the status of our personnel in Saudi Arabia -- meaning we sent all dependents home. And we have given travel advisories saying that you should defer travel to Saudi Arabia. There have been a number of incidents in recent weeks. The Saudis understand that there is a serious problem, and they are mobilizing all of their resources.

I'll tell you what. The Saudis know that this is an enemy that is coming after them. The killing of foreigners -- whether they're Americans, or Brits, or whatever are they -- is a direct attack against the Saudi regime. It's trying to disrupt normal commerce, disrupt the oil sector, and the Saudis are going to go after it with all of the resources at their disposal. And we're going to help them as much as we can.

MR. STEPHANOPOULOS: And the kidnappers had a chilling message. They said they're going to treat Mr. Johnson, if, indeed, that's who it is, just as Americans treated the prisoners at Guantanamo and Abu Ghraib. And it appeared that the Abu Ghraib scandal did continue to mushroom this week in Washington with the release of this legal analysis by the Justice Department that seemed to say that the President was not bound by the laws and treaties condemning torture. Do you agree with that analysis?

SECRETARY POWELL: I haven't seen the analysis, but this is what I do know. The President believes that he was bound by international obligations and legal obligations, and he made it clear that he expected everything to be done consistent with our international legal obligations, regardless of what analyses might have been around.

MR. STEPHANOPOULOS: So he didn't think he was bound, but he was choosing?

SECRETARY POWELL: He was -- the President believed, and he has said this, that he would follow all obligations, because he felt he was bound by those obligations. Now, there may have been legal analysis in various parts of the government that suggested to the President, "well, you know, you really aren't," but the President believed that he was. And his instructions to us consistently were to follow our obligations under international treaties and other constraints that applied to our activities.

MR. STEPHANOPOULOS: There were reports that the State Department actually did have an appendix to that Justice Department report which did disagree with the analysis. It was filed by William Taft, the legal advisor. Is that true?

SECRETARY POWELL: I don't know if we had an annex to that particular memo, because I haven't seen that memo. But as you know, we have had exchanges of views with the State Department and the Justice Department, and William Howard Taft IV is my counselor for these matters. And there was a discussion. There was a debate about these issues.

MR. STEPHANOPOULOS: What was going on back at that time? Because as we see all of these reports come out piecemeal, it looked like there was a part of the government doing everything it could to basically write a roadmap to how the most harsh interrogations could be conducted.

SECRETARY POWELL: What was going on was that the United States has been attacked by an enemy unlike any enemy we'd ever been attacked by before: terrorists, who don't belong to any particular state, who are not signatories to any convention, to any law, and we were trying to determine how best to deal with this kind of enemy. And so, there were differences of opinion. There were opinions that went back and forth. But the only opinion that counted was the President's opinion, and he said we would be bound by our international obligations.

A certain set of criteria were applied to the terrorists at Guantanamo, that they were illegal noncombatants. And a different set of criteria was applied to the people that came into our custody in Iraq. That was clearly during normal conventional war, and they would be treated fully within the Geneva Convention. Those at Guantanamo were going to be treated humanely, consistent with our obligations under international law. And the President made that clear.

MR. STEPHANOPOULOS: Your Department was caught up in a controversy, as well, this week. Last month, you put out a report about global terrorism that claimed that terrorist incidents had declined in 2003, and had actually reached their lowest levels since 1969, I believe.

But two professors, one at Stanford and one at Princeton, found that that wasn't true. And here is what they wrote. They said that:

"The number of significant terrorist acts increased from 124 in 2001 to 169 in 2003 -- 36 percent. The only verifiable information in the annual reports indicates that the number of terrorist events has risen each year since 2001, and in 2003 reached its highest level in more than 20 years."

Now, when the original report came out, Deputy Secretary of State Richard Armitage said:

"This is clear evidence that we're prevailing in the war on terror." Is this -- are these new numbers clear evidence that we're not?

SECRETARY POWELL: The numbers that were in the report were in error and we are analyzing where the errors crept in. There is a new Terrorist Threat Integration Center that compiles this data under the CIA. And we are still trying to determine what went wrong with the data and why we didn't catch it in the State Department.

MR. STEPHANOPOULOS: It's a pretty big mistake.

SECRETARY POWELL: It's a very big mistake, and we are not happy about this big mistake. If you read the report, though, the report makes it clear that terror is a continuing problem. We didn't say it had gone away. But based on the data we had, we took note of the fact that it looked like there had been a reduction. That data turns out not to be accurate, and we will correct it as quickly as possible.

MR. STEPHANOPOULOS: Yeah. But you understand why there is suspicion here.

SECRETARY POWELL: Sure.

MR. STEPHANOPOULOS: This is an election year. The President has made one of his central claims that America is safer now than it was four years ago. And when you look at the report, it did things like cut off at November 11th, even though there were significant terrorist incidents, as late as four days later. Was there any political involvement?

SECRETARY POWELL: None, whatsoever. I was as surprised as anyone when the analysis came to me. And I got a letter from Congressman Waxman that said, "you'd better take a look at your report because we think the data is wrong." The cutoff dates were incorrect. The compilation of some of the significant or insignificant events was not consistent with the way it had been done in previous years.

And so, when all of this came to my attention, I can assure you, that all those responsible for the report were called in. I have been in touch with the CIA. They are working all weekend long. And we'll have a big meeting tomorrow to figure out where the errors crept in, why they crept in, and we're going to correct this report as quickly as possible.

MR. STEPHANOPOULOS: So you believe the CIA was responsible?

SECRETARY POWELL: I'm not saying who is responsible until I sit down with all of the individuals who had something to do with this report: the CIA, my Department -- members of my Department -- other agencies that contributed to it. It's a numbers error.

It's not a political judgment that said, "let's see if we can cook the books." We can't get away with that now. Nobody was out to cook the books. Errors crept in by people who are working hard. We will try to figure out, by tomorrow, how those errors crept in, who is responsible and we'll fix it. And there will be a corrected report out as quickly as we can put it out.

The important thing, though, is when you look at the report, when you look at what Armitage said, and when you look at what Assistant Secretary Cofer Black and others have said, we weren't saying terrorism has gone away. The report clearly says terrorism is a main problem facing the world today. We've got to continue going after terrorists.

But based on the data we had within the report, there was a suggestion that the number of incidents had dropped and it was the lowest since 1969. That turns out not to have been correct. We were wrong. We'll correct it.

MR. STEPHANOPOULOS: Mr. Secretary, thank you very much.

SECRETARY POWELL: Thank you, George.

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