MR. RUBIN: All right, everybody ready? I am only doing this because it was demanded. I don't have a lot of pronouncements. I wanted to get dressed for you, because that is how much I respect you. Let me say that Ambassador Ross is in Saudi Arabia. He called Secretary Albright a couple of times during the course of the trip to give her an update on his activities in the Palestinian Authority and in Israel. He had met with a number of the leaders there, and a number of the negotiators there, and he reported in to her on the current state of play. You see from her schedule that she will be going right into meetings with the Saudi government. The topics of those meetings will be what you would expect, she will brief them on the state of play and the peace process, both the Palestinian-Israeli track and the Israeli-Syrian track. She will discuss the Iraq resolution and the Iraq policy issue. That is a subject that is becoming intensified; discussions between her and Foreign Minister Ivanov and some of the other ministers in the coming week.

QUESTION: Will she discuss Iran?

MR. RUBIN: She will also be discussing the profound concern we have about Iran's stepped up support for the enemies of the peace process, not only its verbal denunciation of the Sharm el-Sheikh Agreement, but the fact that they continue to, and are stepping up efforts to support the Palestinian rejectionist groups that have used terrorism to oppose the peace process. And I would expect that subject to be discussed in her meetings with the Saudi government. So with that broad overview, let me respond to your questions.

QUESTION: (inaudible)

MR. RUBIN: Well, the question was what is the state of play, that Ambassador Ross reported. I mean, beyond saying that there is obviously an enormous amount of work to do in order to get a framework agreement achieved in roughly two and a half months, which is now a matter of weeks away, ten weeks or so. There is an extraordinary amount of work to do on excruciatingly difficult issues that are highly emotional, where there has been some progress, but we have an enormous distance to go.

QUESTION: Can we check out a number of quick things. Where do you stand now on how quickly you might come to action on the Security Council on Iraq and do you remember she had made a flurry of calls … Ivanov (inaudible) … had she talked to him again since Friday morning?

MR. RUBIN: On the Security Council on Iraq, let me say that they spoke on Friday I believe last and Foreign Minister Ivanov indicated that he was sending Ambassador Lavrov back to discuss with Ambassador Burleigh the resolution before the Secretary and Ivanov would engage again. Lavrov and Burleigh would have to meet and we left Sunday night our time and I don't think that had happened yet. I would certainly hope and expect it to happen today following which they would be in touch. I'm not aware of any discussions since Friday.

QUESTION: … Moscow

MR. RUBIN: Yes, Lavrov had been in Moscow. On the vote, we're still determined to move forward and we want to move very, very soon, but I can't give you a specific date.

QUESTION: On the overall state of play, which we are talking about the Palestinians and Israelis have not yet finished, come to an agreement on this additional five percent withdrawal from the West Bank which was something you had said you wanted to be done, are you still of the opinion there's one more day before she gets there and maybe something could happen or is she going to have to step into this breach?

MR. RUBIN: I guess given that it's Monday night, local time, is that what it is in Israel, we don't expect this issue to be resolved before we get there.

QUESTION: So you've given up hope?

MR. RUBIN: If I can use my words, you can use your words. I said that I don't expect this issue to be resolved before we get there. There are a lot of issues that are going to be on the table during these discussions. The Israeli-Syria track, the permanent status negotiations, and all that entails, and I would expect this issue of the five percent further redeployment to be one of many issues that comes up during her discussions

QUESTION: This is not the kind of thing she wanted to get into but by circumstance she has to, right?

MR. RUBIN: I think that what I am suggesting to you is that it is unavoidable that this issue will be one of many issues that she discusses with both sides during her trip.

QUESTION: To follow up on that decision, is she frustrated by the fact that she's coming out here hoping to move the framework agreement along, she has to get sucked into this petty real estate issue again?

QUESTION: It's not petty.

MR. RUBIN: Well, I was going to take the words right out of his mouth. Let me get back to that, I promise I will, let's just cover all the substance and I'll close with something that will work.

QUESTION: Jamie, did you say anything about Yasser Abed Rabbo's statement that was reported by Reuters that they won't negotiate final status unless the settlement issue is addressed?

QUESTION: The report on AP.

QUESTION: He told everybody. It's not a secret, this threat.

QUESTION: And the second question is: talked about Iranian support for rejectionists, is there concern that the Saudis might be backing Hamas or other Palestinian rejectionist groups?

MR. RUBIN: Look, the fact that some of the international terrorist groups around the world get contributions from individuals throughout the Middle East is not news, there is nothing new about that. What I can say is that Secretary Albright will be raising our concerns about terrorism and the threat to the peace process that it poses including the question of Iran's stepped up support for such activities. With respect to individuals, she doesn't come to this country with a list of individuals that she is focused on, those kind of discussions tend to occur at a more technical level, that is not normally what she is doing.

QUESTION: (inaudible)

MR. RUBIN: Let me answer his first question first.

QUESTION: (inaudible)

MR. RUBIN: All right, I can't imagine I have anything more to say, but please try.

QUESTION: (inaudible)

MR. RUBIN: Except that we're more concerned, the concern is heightened, the problem is worse, because of the stepped up point I made. So it's new in that sense. Now on your first question, earlier I told one of your colleagues that we regard settlement activity as a complicating factor in this, the peace process. We think that it is complicating because it would prejudge or could prejudge the outcome of those negotiations and that is one of the reasons why we think it's a complicating factor. In addition it obviously can harm the environment in which the peace process has to take place. And so that is our view and that is a view that I would expect the Secretary to make clear. On the other hand, we do not think that the Palestinian side should impose pre-conditions such as on specific issues that would make it not possible to go forward with permanent status talks. So we think that both parties should do what their leaders have indicated they want to do which is keep their nose to the grindstone doing the work that is necessary if in this short period of weeks we have coming, we're going to get to the framework agreement the President, Chairman Arafat, and Prime Minister Barak have said they want.

QUESTION: Could we do a fact check on which one of the issues of the five percent and expanding settlements, is it in the U.S. view, isn't it in Israel's right under its agreements with the Palestinians to decide which territory to give up, in other words to decide where that five percent is. And secondly, what if any agreement prohibits Israel from expanding settlements?

MR. RUBIN: I believe the Sharm el-Sheikh agreement includes a sentence about status issues and the need to not take steps to prejudge those issues. I think the direct and very factual answer to your question is the Sharm el-Sheikh agreement. I will get the text for you.

QUESTION: What about the five percent?

MR. RUBIN: On the five percent, the Israelis and the Palestinians have

been able to work these kinds of things out before. There is a much higher degree of trust and confidence between the Palestinians and the Israelis now than there has been in a long, long time. They have worked a number of issues out and we believe this issue is inherently resolvable between them. With respect to whose ultimate responsibility it is, I think we've talked and said in the past that ultimately it is Israel's responsibility. But if the trust and confidence that we want to create is going to pervade and reign supreme, then these are the kind of issues that we would certainly hope and expect the parties to work out together.

QUESTION: Jamie, hasn't the trust and confidence backslid since Sharm el-Sheikh?

MR. RUBIN: Well, let me say this, and now I'm going to get back to Doug's question, I think the combination of the five percent and the quote from the Palestinian negotiator and the settlement activity issue, has made the Secretary pretty concerned that things are not moving forward as quickly as she and the President would have hoped at this stage, given the enormous amount of work that lies ahead. So I think she is concerned and somewhat troubled by the reports she has received in the last days about developments on the ground.

QUESTION: Do you think that the timing of the breakdown of these talks is pegged to the Secretary's arrival? Do you think there are any theatrics involved?

MR. RUBIN: You can ask those who are doing it.

QUESTION: You are saying that this deal affects Sharm el-Sheikh, the wording was also in Oslo too and Wye, in Sharm I think it's the identical wording, but am I reading too much into your statement by saying that what Israel is doing in settlements is a quote "violation" of Sharm el-Sheikh?

MR. RUBIN: I think that you would be massively over reading what I said. We have made it a practice for many years now, through the last Prime Minister, to not get into the question of violations and become the legal reader of every sentence and every agreement between the Israelis and Palestinians. On the other hand, we are concerned about settlement activity. It is one of the reasons why Secretary Albright is troubled about the current climate, because if you put that together with the statements of the Palestinian negotiators and the fact that the five percent issue still remains outstanding, we are not moving ahead at the pace that one would expect if we are going to get everything done by February.

QUESTION: Does this cause Albright and Ross and everyone else to have another view of Barak than maybe they had at Sharm el-Sheikh or before that?

MR. RUBIN: No this isn't about Barak or Bibi. This is a matter that is a long standing concern of ours and there is nothing new about that.

QUESTION: I understand that. You have a government now that you were delighted to see come into power and it's exactly the same thing you had two years ago when you came here so you had to talk about settlement activity.

MR. RUBIN: Well, I think that there is a big difference. The large difference is that we have the Sharma el-Shiekh agreement by which a number of the further redeployments have taken place which has massively improved the environment as opposed to the last situation where the agreement was signed but never implemented. The security cooperation between the Palestinians and the Israelis in our view is extremely good. And finally the trust and confidence between the parties, their ability to work a lot of problems out in our judgement, is far, far better than it was in the past.

QUESTION: All right but Arafat and his negotiators are yelling at Israel about settlement activity.

MR. RUBIN: As someone who is also a veteran of the Wye Agreement and the period that led up to that, I think that it would be fair to say that the level of rhetoric and the disagreements is a small, small fraction of what it was before. But I appreciate the question.

QUESTION: (inaudible)

MR. RUBIN: I can't get into that level of detail and you know I can't.

QUESTION: (inaudible)

MR. RUBIN: Question of settlement activity is a matter of concern to us because it complicates the environment and it could prejudge the outcome of permanent status talks. The specifics of which I do not intend to get into other than to say that the Secretary's concern is multi-faceted, for those of you who have followed her for a while, including the fact that the interim step has not been taken before her arrival, the fact that the Palestinians are purporting to suggest preconditions for the permanent status talks by saying that certain things have to happen or not happen or they will be suspended. And the Israelis are moving forward with settlement activity. Those three points are the reason why she is concerned.

QUESTION: Would you like the Saudis to play a role in breaking the impass on the Syrian track in anyway and any expectations…

MR. RUBIN: Anything that Saudi Arabia can do to encourage the countries in the region or the Palestinians to approach the peace process with flexibility and realism would be helpful.

QUESTION: On Saudi Arabia and Iran again, I know that you are going to discuss your concern, but are you going to ask them to do anything about it? If Saudi Arabia (inaudible) …

MR. RUBIN: I think the fact that the Saudi government and a number of governments in the region have moved to improve relations with Iran is not an issue that we intend to challenge. The fact is that a number of countries in the world have done that and it is our view that as countries try to improve relations with Iran they should do so with a specific and clear eye on the problems like terrorism, that need to be dealt with.

QUESTION: Jamie can you clarify something? It sounds as if you have the Israelis on the one side saying they don't want to agree to a further five percent redeployment and they're moving forward with expanding their settlements, what is it that the Palestinians are..I mean it sounds as if it is the Israelis that are holding things up.

MR. RUBIN: I'm glad that you (inaudible) …

QUESTION: The idea is that the territory is to be next to one another.

MR. RUBIN: Well the Palestinians will have to tell you what their specific concerns are. But I think your question was that it seemed like most of the problem is on the Israeli side and I think that I just tried to explain why the five percent is more complicated than that. Similarly, when the Palestinians announced, publicly, that they don't want to continue permanent status talks because of the settlement… that does not contribute to the climate and environment in which progress can be made. So, we are not into pointing fingers here, we are into resolving problems. But we have to acknowledge that there are some problems.

Thank you.