Transcript

Rice Testifies Before the House Judiciary Committee on Mideast Policy

CQ Transcripts Wire
Wednesday, October 24, 2007; 3:34 PM

REP. TOM LANTOS, D-CALIF. CHAIRMAN: The committee will come to order.

We have the extraordinary honor and pleasure today of having with us our most capable and most distinguished secretary of state, Dr. Condoleezza Rice.

This is her third appearance before our committee this year and we are deeply grateful that, despite her incredibly busy schedule, she has honored us yet again with a visit.

As always, Madam Secretary, it is a great pleasure to welcome you here today.

The topic of today's hearing, U.S. policy in the Middle East, is broad and multi-faceted. Among other things, it includes Iraq, Lebanon, the Israeli-Palestinian peace process, particularly the upcoming Annapolis meetings, the projected sale of advanced weapons system to nations in the Persian Gulf.

It also includes Iran, a nation about which both President Bush and Vice President Cheney used some strong language in recent days.

Secretary Rice, who has just held extensive conversations both in Russia and in the Middle East, will be able to elaborate on all of these issues for us and we all look forward to her testimony.

Given the extreme importance of today's hearing and the interest committee members have in using as much time as possible for direct questions, I will dispense today with an opening statement and I recognize my good friend and colleague, the ranking minority member of the committee, Ms. Ileana Ros-Lehtinen.

REP. ILEANA ROS-LEHTINEN, R-FLA. RANKING MEMBER: Thank you so much, Mr. Chairman, as always.

And, Madam Secretary, I'd like to extend our warmest welcome to you today. And I praise your grace under pressure. You are a true lady.

I strongly support our efforts to deny Islamic extremists a victory in Iraq, because promoting stability in this troubled region is a central component of our U.S. national security strategy, and it identifies us as fighting terrorism and the proliferation of unconventional weapons and ballistic missiles as the overarching priorities for our nation.

We will be -- probably, of course, ask you about Iran and its nuclear proliferation efforts and if Iran were to achieve nuclear status, do you believe that others will consider nuclear options as part of their defense strategy? And the Gulf security dialogue and related arms sales be sufficient to deter further proliferation in the region?

ROS-LEHTINEN: And also, we want to hear a lot about the U.S.- Middle East policy, obviously.

Some have questioned the efficacy of pursuing final status issues through the Israeli-Palestinian negotiations, at this time. After all, Hamas controls the Gaza Strip and Abu Mazen remains unwilling to truly confront Palestinian terrorism for the sake of his people and long-lasting peace and security with Israel.

All of these issue are interconnected. None have easy answers.

And we thank you again, Madam Secretary, for appearing before us.

Thank you, Mr. Chairman, always, for your fairness.

LANTOS: Secretary Rice, every single member of the committee is delighted to have you. We are honored with your presence. And the floor is yours.

RICE: Thank you very much, Mr. Chairman.

And thank you, Congresswoman Ros-Lehtinen.

I want to thank the members of the committee for this opportunity to address this extremely important set of policy issues.

I have a longer statement, Mr. Chairman, but, in order to permit full questions, I think I'll just submit it for the record, if that is acceptable.

LANTOS: Without objection.

RICE: The United States has enduring national interests in the Middle East, economic, geopolitical, security and moral values.

For more than six decades, over the course of many administrations, American leaders of both parties have worked for peace and security in the region, not always perfectly, but consistently.

The Middle East is now and will remain one of the most strategically important parts of the world for our national interests and for international security. Therefore the United States will never retreat from our commitments in the Middle East.

The goal we seek is a secure and peaceful region. But for that peace and security to be lasting, not false stability, it must be rooted in what President Bush calls the non-negotiable demands of human dignity: the rule of law, limits on state power, free speech, religious liberty, equal justice, property rights, tolerance of difference, and respect for women.

These values are a source of success for nations across the world. And they are the only ideas that can give people in the Middle East a future of modernity with dignity.

This we believe will ultimately defeat the ideology of violent extremism and thus ensure our security.

I look forward, Mr. Chairman, to talking with the committee about how we pursue these goals.

LANTOS: Well, Madam Secretary, let me begin with Egypt.

We have received very disturbing reports in recent weeks that Egypt has not only failed to stop the flow of arms into Gaza, but certain Egyptian authorities are cooperating with the terrorist organization Hamas in smuggling vast amounts of modern weaponry into the Gaza Strip.

You recently visited Egypt; you had meetings at the highest levels. Can you tell us whether you have raised this issue with them, what their response is, do we accept their response and what our policy is with respect to Egypt apparently turning Gaza into a terrorist sanctuary well-equipped with modern weapons?

RICE: Well, thank you, Chairman.

I did, indeed, recently meet with the Egyptians, with President Mubarak, with their intelligence chief, with the foreign minister, of course. And this subject of the smuggling in Gaza and issues in the Sinai, the Philadelphia strip, was one of my highest priorities in talking with the Egyptians because this has become a source of concern for the Israelis and a source of concern for the Palestinians, because, as Hamas is in the Gaza, it is extremely important they be denied financial assistance or weapons or the like.

I believe that the Egyptians understand that it is not in their interest -- their national interest to have this smuggling take place, either.

I did say that I thought we had not made -- they had not made enough progress. There needed to be further efforts. The situation is simply not acceptable, particularly in the context of trying to support moderate forces in the Middle East and moderate forces in the Palestinian territories.

We agreed that the United States would soon send a senior delegation to help with the Egyptians and the Israelis and the Palestinians to see what further steps might be taken to deal with the smuggling.

But it was, indeed, Mr. Chairman, an extensive discussion and a very candid one with the Egyptian leadership.

LANTOS: Does it appear plausible to you that the huge Egyptian military is incapable of preventing smuggling operations into Gaza?

RICE: Well, I can't make a judgment, Mr. Chairman, of what precisely is going on here because I'm not on the scene. That's one reason that we think the senior delegation is a good idea.

I will say that these are smuggling routes that have been there for many, many years. And we know that it is not easy to cut them off. But I was very clear with the Egyptians that what ever the challenges and the difficulties of cutting off smuggling routes, they had to do more and they had to do more urgently.

LANTOS: Madam Secretary, let me turn to the upcoming Annapolis conference.

I am very supportive of the idea of the conference. And I certainly want the conference to succeed to the maximum possible extent. But there are very thoughtful and serious people who are raising questions about the timing of this conference.

Both sides are weak in some ways, not even in control of the area they presumably are speaking for. Abu Mazen has tenuous control of the West Bank, no control of Gaza. The Israeli prime minister is in a singularly weakened position.

One would think that the historic breakthroughs that we are all hoping for, two states living side by side in peace security -- that such an undertaking would need to be approached when there is some degree of stability, strength, control by both sides of their respective governments and peoples.

How do you answer the skeptics who feel that it is an attempt by the administration to embellish its record -- you have about 14 months left in this administration -- and you are reaching out for the Israeli-Palestinian issue as one faint hope to leave a positive diplomatic record for the United States for this administration; that the timing is inappropriate; that the move to convene the conference is ill-advised; that the early indications are that some of the key Arab countries might or might not attend, and if they do attend, their contribution to the success of the conference will be their mere presence?

LANTOS: Would you care to deal with the issue that the skeptics raise?

RICE: Well, thank you, Mr. Chairman.

The first point that I would make is, I've heard the legacy point, too. And let me just say that there are probably easier foreign policy tasks to take on than the Israeli-Palestinian conflict.

The timing comes down to what it is we need to do to give forces of moderation a boost in the region and to deal a blow to forces of extremism.

We are in a different world than we were in 1973 or 1983 or even, for that matter, in 2000, the last time that this effort was tried seriously, and that is a world now in which, as much as the Palestinian-Israeli conflict needs to be resolved on its own terms, and certainly needs to be resolved with due regard for and respect for Israeli security concerns and for concerns that the Palestinians have about their future, it does take place in a context of a larger battle between extremists and moderates in the Middle East.

In that regard, our concern is growing that without a serious political prospect for the Palestinians that gives to moderate leaders a horizon that they can show to their people that, indeed, there is a two-state solution that is possible, we will lose the window for a two-state solution, that you will see the further radicalization of Palestinian politics, of politics in the region.

I said to my Israeli -- to some of my Israeli counterparts when I was there that a few years ago, we were not talking about Iranian support for Hamas. We always knew that Iran supported some of the more marginal terrorist groups, the FLP and so forth, but to see Iranian actual penetration now of these more radical elements of the Palestinian terrorist groups is really quite troubling.

And so, what we're trying to do here is to give to the moderate forces a chance to demonstrate that statehood is a reality.

Now, the parties themselves I think have recognized the importance of this moment in doing precisely that. Which is why the principal reason for the Annapolis conference would be to support the bilateral track that President Abbas and Prime Minister Olmert have themselves entered onto. They have said that they want to write down some of the understandings between them.

Obviously, it is going to be very important that they not just deal with the issues that will lead to the establishment of a state, but also on-the-ground issues. I'm encouraging the parties to live up to their road map obligations -- their first-phase road map obligations.

And clearly, Mr. Chairman, even if we were fortunate enough to see them reach agreement, no one is going to want to see a Palestinian state established that leaves a security vacuum. And so, the work that Tony Blair is doing on the establishment of Palestinian institutions, the work that General Dayton is doing on the establishment of legitimate security institutions for the Palestinians, the work that needs to be done by the Palestinians and others and the Israelis to fulfill their road map obligations, absolutely essential if the Palestinian state is, indeed, to be established.

But for them to work on the political horizon, the nature of the Palestinian state, we think that those discussions are extremely important. And without them, I worry that you will never be able to do enough for moderate forces in the region to, again, underscore that a two-state solution is possible.

LANTOS: What commitments have you obtained, Madam Secretary, from the Saudis and from the Egyptians, with respect to the successful outcome of this conference?

Their failure to support a similar effort seven years ago is in good measure behind the lack of success when President Clinton attempted to bring about a reconciliation.

Have the Saudis and have the Egyptians given you any positive indication that they will be forthcoming, that they will break new ground?

Are they prepared, speaking of the Saudis, to sit down with the Israelis face to face and have a serious conversation, or are they still remote, uninvolved and passive?

RICE: Well, Mr. Chairman, I agree completely with your analysis of one of the reasons for the failure of previous efforts. The Arab states have to be in on this from the ground floor. And we've tried to bring them in from the ground floor.

A Palestinian leader is not -- no matter how strong, by the way -- a Palestinian leader is not going to be able to make the important compromises that will be needed without the support of these Arab states.

I believe that we have some work to do still. We haven't issued any invitations, and so I don't expect that any will be accepted until we've actually issued them.

LANTOS: May I stop you for a second?

RICE: Yes.

LANTOS: Do you expect the conference to take place before the end of the year?

I do, Mr. Chairman, expect it to take place before the end of the year.

And the Egyptian foreign minister was very, I thought, forthcoming when I was in Egypt, even in his public comments about their, not just desire, but their willingness to work to make the conference a success. A similar reading from the Jordanians. And the Saudis have said they are encouraged by what they have seen.

But we will be pressing very hard for our allies to help in this endeavor, because it will benefit, of course, the responsible Arab states if this conference is a success.

They, too, face the same forces of extremism that are making it difficult in the Palestinian territories.

May I turn for a minute to Iran?

The replacement of the Iranian negotiator, Larijani, who, in the Iranian context, is, quote, unquote, "more of a moderate than Ahmadinejad and others," has cast a serious pall over recent attempts to continue or renew dialogue with the Iranians leading to their voluntary abandonment of their nuclear ambitions.

The president and the vice president have used some very strong words in recent days, with respect to Iran. Could you sum up for us our current policy with respect to Tehran?

RICE: We are, of course, very concerned, Mr. Chairman, that the policies of Iran constitute perhaps the single greatest challenge for American security interest in the Middle East and possibly around the world, because the combination of Iranian terrorism, Iranian repression at home and the pursuit of nuclear weapons technology -- technologies that could lead to a nuclear weapons -- is a very dangerous mix.

We are, with our international partners, continuing to pursue a two-track approach on the nuclear issue.

We reaffirmed that two-track approach when I was in New York. That means that we will, of course, pursue negotiations.

Mr. Solana met with the Iranian team yesterday.

Our view is that we don't know what the personnel changes mean. We will be just looking to see whether the Iranians are prepared to change their behavior. And they need to accede to the international community's demand that they stop the enrichment and reprocessing -- suspend it so that negotiations can begin.

The other track, of course, is to pursue continuous action in the U.N. Security Council. We are preparing, with our colleagues, a further Security Council resolution.

But, Mr. Chairman, we've not been content to make those the only two tracks, which is why the president has been very determined to demonstrate, inside Iraq, that we will pursue Iranian agents and actors when they are engaging in activities that are harming our troops and harming innocent Iraqis.

It is why we are continuing to designate Iranian entities when we find that they are trying to use the financial system for their ill- gotten gains. And it is why we are trying to strengthen the defense capacity of our traditional allies in the Gulf. Because working together with them, we can help be a barrier to further Iranian aggression in the region.

LANTOS: Madam Secretary, our principal interest on this committee, obviously, is policy. But we also have an oversight responsibility with respect to the Department of State.

I commend you for agreeing to appear tomorrow before another committee of Congress, where all of the attention will be devoted to those matters, of private contractors, the embassy time schedule and so on.

But I would be remiss as chairman of this committee in not asking you to sketch for us the steps you have taken with respect to private contractors and their behavior in Iraq, the question of corruption within the Iraqi government, the question of corruption with contractors, and the general issue of our long-term presence vis-a-vis what will be the largest U.S. embassy on the face of this planet, the embassy construction schedule.

Secretary Negroponte advised me yesterday it's behind schedule. We don't know exactly when the embassy will open. We will need to make changes in our plans for the embassy because a larger number of both civilians and military will be stationed there.

Can you give us a survey of what your position is on all of these, quote/unquote, "housekeeping matters" that have come up lately.

RICE: Thank you, Chairman. I most certainly would be pleased to do so.

Let me say first that the mission in Iraq is of critical importance. It is also one of the most challenging missions that we perhaps have had as a country in quite a long time.

We have many, many very dedicated men and women in uniform, and also civilians, serving in Iraq under extremely difficult circumstances, away from family, away from home, in danger.

And so I consider it an absolute and very, in fact, sacred duty to do the very best that we can here in Washington to support them. And it is why I have been concerned about some of the issues that have arisen in the context of management.

It is a very, very difficult environment in which to manage. The department is being asked to do things in numbers and in size that are well beyond the bounds of what we have been asked to do before. And so there have been some real management challenges.

I have asked Deputy Security Negroponte, who has -- who, as the deputy can pay some attention to this, to appoint a person who will report to him and look at Iraq management issues full-time for the department. And we are asking a senior diplomat to do that role for Secretary Negroponte. And I think that that will help on making certain that Washington is doing what it needs to do to support the field.

On the specific issues, let me first turn to the contractor issue.

I did, upon learning of the incident in Iraq with the Blackwater security guards, I appointed a senior panel of outside experts to work with Pat Kennedy, who is one of our most senior management officers -- General Joulwan, former NATO commander; J. Stapleton Roy, a very senior American diplomat, served in several places as ambassador; and Eric Boswell, a senior intelligence officer who used to be in diplomatic security to go out and really take, as I called it, a probing, in-depth, 360 look at what we were doing.

They came back with a report, which I have made public, which I believe did expose serious weaknesses in oversight of contractors.

I want to say that I would underscore what they said: We have to say that our diplomats have been kept, thus far, thank God, safe. And that is, of course, the principal concern.

As people go out in dangerous circumstances to help with ministry development, to help the local leaders develop their democracy agenda or to work on budget execution, all of the things that civilians have to do to support our counterinsurgency efforts, it is important that we keep them safe. And they have -- that has so far, thank God, been the case.

But that does not mean that there shouldn't be stronger oversight of the contracting side. And what I've done is to accept the recommendations that are unilateral to the State Department; issues, for instance, of bringing with each convoy a Diplomatic Security officer, cameras that can track incidents, better reporting on incidents immediately after they happen, better coordination with the military.

There are a number of steps that we have taken. Training -- we have some suggestions on training, language, et cetera, for the contractors.

Secretary Gates and I talked yesterday. And we believe there may be further steps that we need to take, because it's not just State and Defense that have contractors. There are a lot of U.S. government agencies and nongovernmental organizations.

So Secretary Gates and I have asked Deputy Secretary Negroponte and Deputy Secretary England to make some recommendations to us by the middle of next week for further steps that may need to be taken.

And I don't rule out, Mr. Chairman, that there may even be other things that we must do. But I believe this is a good start, and I want to thank this panel for their excellent and expeditious work.

The new embassy compound is quite another matter. As you might imagine, construction in the environment in Iraq is a complicated and difficult task. And it is made difficult both by the security environment and it's made difficult, frankly, by the fact that this was programmed in 2004 and there have been some changes in demand for what we do in Iraq.

The original program of $592 million, that will be completed, General Williams tells me, on budget.

Now, in terms of time, there are some delays -- we hope that they're not too long -- on that part of the project that have to do with issues concerning some flaws in construction, which we have gone back, I'm told, worked with the contractor.

They're being remediated at the expense of the contractor. And we hope that that part of the program will be done relatively shortly.

We've also had to make some changes to the program.

For instance, we have an additional more than 300 personnel who will be there for some transitional period, as well as some locally engaged staff that will be there for the transition period.

But we've decided, Mr. Chairman, that that should be, also, a temporary structure, a transitional structure. And so we're not building onto the existing structure. What we're going to do is to use some trailers and the like.

We do have to give it proper security cover. And so it's not inexpensive, but it is transitional. It is temporary.

Additionally -- and this is a decision that we made quite consciously -- we believe that it would be useful to have MNF-I under General Petraeus co-located with General -- with Ambassador Crocker -- I think all of the committee saw the wonderful working relationship that they have -- and that will require some potential changes to the structure.

Now, for all of this, we have identified, out of the 2007 supplemental, about $75 million, which is about half of what these additions will cost. And we will be requesting, in the 2008 supplemental, an additional $75 million.

But there -- I'm told by our management people who have gone out there -- yes, there are some construction difficulties that, I think, are within the bounds of a big project like this, that are being remediated by the company at their expense.

We will insist on inspections by independent groups, as well as inspections by our own people, to make sure that we are meeting OSHA standards, for instance.

And we are working very hard to deal with any additional programmatic needs in a way that does not dramatically expand the scope of this particular project.

LANTOS: Before I turn over the questioning to my colleague, can you give us a tentative date for opening the embassy, Madam Secretary? I realize this is not a firm date, but can you give us an idea as to when you plan to open the embassy?

RICE: Well, I'm hesitant, Mr. Chairman, only because when I'm given tentative dates, I treat them exactly as that, because I think we've all had experience with construction.

We are going to open as soon as possible. I think we're talking about not a very long time before the building can be delivered to the department. But the department then has to do some work in making sure that computers are up and that people can actually move in.

And so, I'm hesitant to put forward a date, but we're pushing to get it done as soon as possible.

LANTOS: Do you plan to be around when the official opening takes place?

RICE: I certainly hope to open it.

(LAUGHTER)

LANTOS: Thank you very much.

Congresswoman Ileana Ros-Lehtinen?

ROS-LEHTINEN: Thank you, Mr. Chairman.

Madam Secretary, my step-son and daughter-in-law have served in Iraq, and my daughter-in-law returned just last week after deployment in Afghanistan. And the way that you have carried out our policies as secretary of state and our important mission abroad brings great honor to their service, and I thank you for that.

RICE: Thank you. Thank you, Congresswoman.

ROS-LEHTINEN: I wanted to ask a follow-up on the chairman's question regarding Iran and then a question about the upcoming conference. And, certainly, as we have discussed, the impending threat of a nuclear-armed Iran looms dangerously.

Iran is a threat to us and to our allies. But Iran is very vulnerable to economic pressure, but for such pressure to have a chance to work in time to alter the Iranians' current course, it's got to be ratcheted up dramatically, right now.

We seem to be taking a slow, deliberative course. We've moved against two Romanian banks, as you pointed out in your statement.

But why only two? We hear that another bank may be added to that list, but when?

We hear that the al Quds brigade of the Iranian Revolutionary Guard Corps may be added to the global terrorist list, but again, why, and why just the al Quds brigade?

Because the corps as a whole -- they control more than 30 percent of the Iranian economy, yet that brigade does not have anything to do with the economic activity. Why not put the whole corps on the list?

We've not, also, sanctioned one foreign company for investing in the energy sector in Iran, as the Security Council and the E.U. are similarly moving very slowly on economic sanctions. And they have, certainly, tremendous trade leverage with regard to Iran.

And I wanted to ask, where's the urgency?

And secondly, on the upcoming summit, Madam Secretary, the press reports say that the American government is planning to transfer $410 million to the Palestinian Authority in an effort to strengthen its president and its prime minister.

But another news report, this morning, says that the Palestinians will boycott the conference unless a deal is reached with Israel on the issues of Jerusalem, water and borders.

Will we continue to pressure Israel to make concessions and allow, as before, the Palestinians to ignore their commitments?

And I'll stop there to give others a chance to ask.

RICE: Thank you. Let me take the second question first. We will be seeking funds to support the government of Salam Fayad and Mahmoud Abbas because we believe, as I said, that this is the best chance for a moderate Palestinian government.

But I believe we're going to have all kinds of -- let me just say -- people saying all kinds of things to position themselves for upcoming negotiations or discussions.

I've been very clear with the Palestinians that they have to meet their obligations. I've been clear that they have a number of obligations that are unmet.

I've also been very clear that we have a set of understandings about how the Palestinian state will be established that includes, for instance, a serious security concept and not just the so-called "big three" of borders, Jerusalem and refugees.

RICE: And so, I'm not surprised that unnamed sources are saying various things.

But when I talk to President Abbas, when I talk to Salam Fayyad, they are concentrating on trying to meet their obligations. They very much want this meeting to take place. And I look forward to working with them on it.

In terms of Iran, we are looking at what further designations we should make, because, as I have noted to the chairman, one of our best levers is to -- it's a really simple proposition -- Iran should not be able to use the international financial system to move its ill-gotten gains from proliferation or from terrorism around the world. And we will continue to look at those. And we're working very urgently to get some of that ready.

And secondly, on foreign companies, it has been our view that we are working hard toward a voluntary effort to get people to react to what are the very clear reputational and investment risks of investing in a country that is under a Chapter 7 -- two, now, Chapter 7 resolutions.

And certainly, a number of international financial concerns have left Iran and refuse to deal with their assets. There are -- the number of export credits from countries that would support investment in Iran is starting to diminish.

I believe that we need to continue to work with our allies. That's why I have preferred a voluntary effort, rather than secondary sanctions on foreign companies.

But I've also been very clear to our allies that this is not something that can go on endlessly, that there is urgency to this issue. Iran continues to move along with its program, and we really need to get serious that we are committed to the diplomatic track.

But diplomacy has to have teeth. And the teeth in this case is to use the financial -- the unwillingness to let Iran use the financial system in this way to make it difficult for Iran to do its business.

ROS-LEHTINEN: Thank you, Madam Secretary.

LANTOS: Mr. Berman?

REP. HOWARD L. BERMAN, D-CALIF.: Thank you, Mr. Chairman.

I'd like -- Madam Secretary, it's good to have you here -- I'd like you to address the issue of Iraqi refugees.

It seems to me that this is a growing humanitarian and security crisis, and that we have a very high obligation to try and make the situation better, given the whole nature of how this crisis developed.

BERMAN: I'm curious about whether -- your feelings about both the nature of the crisis and our responsibility, and if you share my concern, what can you do to get a speedier action by us to resettle the somewhere around 10,000 Iraqi refugees who worked for U.S. military, U.S. Embassy and diplomats, American-funded NGOs, American media organizations, and who sometimes have become refugees or whose situation is threatened by virtue of the fact that they worked for us.

What can we do to speed up the resettlement process for this?

RICE: Well, thank you.

We -- I do take the Iraqi refugee problem quite seriously. I think it is very challenging and difficult. And we particularly are concerned about those people of whom you last spoke, the people who may have worked for us and might therefore be in particular danger.

We -- I appointed a coordinator for refugee matters, ambassador -- former ambassador to Haiti, Ambassador Foley, who is working now with a designated point of contact for Mike Chertoff over in DHS, because some of this is the problem of terrorism screen and making sure that we are coordinated with DHS. And I think they're working very urgently.

We believe that we will make real headway on admissions of people to the country during this next several months.

We've also increased our efforts with the United Nations refugee coordinator and tried to increase our host nation support.

So we're working on multiple fronts.

We have encouraged the Iraqi government to do more itself to deal with these problems.

RICE: They've pledged $25 million to the U.N. fund for Iraqi refugees.

I have been very concerned that we also pay attention to Iraqi children and their education. I learned that we -- they were having problems with the education of some Iraqi children in these refugee circumstances. We've tried to address that problem.

And finally, one of the things that we believe we can do is that there are parts of the country now to which people which to return. But there are issues of destroyed housing and no place, essentially, for them to go back to.

And in some parts of cities like Fallujah and Ramadi, the answer is also to help -- to get the Iraqis to pay attention to displaced people who may wish to return.

So we've tried to attack this on multiple fronts.

And, Congressman Berman, I do believe that we will see our numbers of admitted refugees going up. But we do have a -- we are trying very hard especially to pay attention to the people who have worked for us.

BERMAN: Since I have another minute or so, what's the situation now with Turkey and the PKK and the concerns by the Kurds about the cross-border efforts and Turkey's very understandable anger at the loss of its own troops?

RICE: It's been a very difficult 72 or so hours -- more -- on this issue. But we -- I spoke with Prime Minister Erdogan on Sunday, as well as with the Iraqi Kurds about this.

I told Prime Minister Erdogan that the United States takes this extremely seriously. We said early on that Iraq should not be a place from which PKK terrorism can hurt Turkey.

We have encouraged several things.

One is that the Iraqis and the Turks should make extraordinary efforts. And, indeed, the Turkish foreign minister was in Iraq. There will be a senior delegation of Iraqis going to Turkey. They are working on some joint efforts, including the fact that the Iraqis have now said they will close PKK offices; they will not allow movement of fighters.

We have a list of things that we really believe if they are undertaken will help to deal with the situation.

We have a trilateral mechanism -- that is Turkey, Iraq and the United States -- that we are activating immediately to take steps that will prevent this kind of cross-border terrorism from taking place.

RICE: It's very difficult because these people are in very remote areas of Iraq Kurdistan. But that isn't an excuse. The Iraqis have to deal seriously with this and so do we.

And we've reassured -- tried to reassure the Turks that we will do what we can to prevent that kind of attack again.

LANTOS: The gentleman from New Jersey, Mr. Smith?

REP. CHRISTOPHER H. SMITH, R-N.J.: Thank you very much, Mr. Chairman.

And let me say, Secretary Rice, thank you for being here for your extraordinary service.

And if Mr. Berman had not asked you about Iraqi refugees, I would have. There's a great deal of concern on both sides of the aisle on that issue.

Secretary Rice, as I think you know, since 1979, China's one- child-per-couple policy, with its heavy reliance on forced abortion, has actually murdered more children than all of the mass killings of Joseph Stalin and Mao Zedong.

The one-child-per-couple policy has made brothers and sisters illegal. It is being used today as genocide against the people of Tibet and the Uighurs. And as a result, there are little girls being targeted for extermination and killed by the tens of millions simply because they are little girls. The systematic destruction of those girls is gendercide.

As a direct consequence, the imbalance of boys and girls in the People's Republic of China today is so alarming -- some put it as high as 100 million missing girls -- that one demographer said that by the year 2020, 40 million men will be unable to find wives because they have been aborted; a cruel outcome that will make China a magnet for traffickers.

And there's also a book called "Barren Branches," which posits as its theory that it could also lead to war.

In addition to withholding funds from the UNFDA because of their support for this policy, what are we doing to defend women and girls from this predatory policy? And would you consider raising this issue at the U.N. Genocide Implementation Body -- you know, obviously births or targeting births is part of the U.N. Genocide Convention -- and the Human Rights Council?

C. SMITH: And, secondly, this week I plan on introducing a bill, the International Megan's Law, named after a little girl in my hometown of Hamilton, Megan Kanka, who was brutally murdered by a convicted pedophile who lived next door.

Over the last decade, state after state has passed, as we all know, Megan's laws to notice local neighborhoods, Boy Scouts, Girl Scouts, schools and the like about the existence of that person in their neighborhood.

Using FBI databases, the bill would require noticing destination countries when a convicted sex offender or a convicted sex trafficker was about to travel to that country, and would also bar entry into this country of convicted sex offenders and convicted sex traffickers.

And I know of your very deep commitment to combating human trafficking and violence against women and violence against children. On that bill, I would ask your personal help in trying to get that enacted into law.

RICE: Thank you very much. And thank you for your continued dedication to these issues and to concern about really the most vulnerable of people in the world.

And certainly on China's policies, we have always voiced our concern about those policies. As you say, we have denied funds because of policies of that kind.

We -- on the question of where one raises or how one raises it, I'd be happy to have a dialogue with you.

RICE: I've not really thought it through, but it would be useful to do that.

And as you said, we've tried to address many of these issues through our work on human trafficking. And the president's, I think, global human trafficking operation, GTIP, is now renowned for having put this on the agenda of every country in the world. And countries don't like to be designated in tier three. And so we are very often to get -- able to get responses.

We don't always get responses, and when we don't, we've been willing to really expose trafficking procedures and trafficking policies in countries.

So I agree. I think it is a modern form of slavery, this trafficking, and we have tried to act accordingly.

I have not looked at your bill, Congressman, but of course I will be happy to look.

C. SMITH: I deeply appreciate that.

You know, the idea emanated from a meeting I had with the TIP office from Thailand, at which they were expressing great consternation that our pedophiles fly to Bangkok, abuse their little children, and then fly back, and they never even know they're coming in the door.

And it seems to me that if they're noticed, they can put a great big stop sign and prevent their entry; and if they do get in, monitor their activities. And vice versa: We don't want these pedophiles and convicted sex offenders and sex traffickers coming here as well.

It seems to me it's an idea that will help advance this cause significantly.

RICE: Thank you.

C. SMITH: I thank you.

Thank you, Mr. Chairman.

LANTOS: Gentleman from New York, Mr. Ackerman?

REP. GARY L. ACKERMAN, D-N.Y.: Thank you, Mr. Chairman.

Madam Secretary, welcome.

For a moment, I'd like to focus your attention on the presidential succession crisis in Lebanon.

Support for the Cedar Revolution may be the president's biggest potential win in the Middle East. And right now that success is just four dead men away from disappearing.

That's the remaining number of parliamentarians that Syria and Iran and their terrorist proxies need to kill in order to destroy the majority and restore Lebanon to its status as a fiefdom.

If losing Gaza was a disaster, try losing Lebanon.

Our response here has been, frankly, inadequate. And I'd like to suggest the following steps to be considered urgently.

First, America's commitment to Lebanon's sovereignty and independence needs to be reiterated by the president in a specific major address.

Damascus and Tehran and the entire Middle East need to hear explicitly that the United States will not accept resumption of foreign domination of Lebanon; that we insist, and mean it, that foreign states refrain from interfering in Lebanon's constitutional process; that we consider the assassination of Lebanese parliamentarians as acts of international aggression; that we will never sacrifice the Special Tribunal for Lebanon to appease other states; and that we will push for the special tribunal to include all assassination's since Rafik Hariri in its purview.

If a presidential statement was important for Burma, it is equally important for Lebanon.

Second, the president should immediately impose economic and political sanctions against the Syrian regime, specifically, President Assad and his family and his coterie of close associates. Their assets in the United States should be frozen, and their travel to this country should be barred. The very same steps should be taken against their proxies in Lebanon.

The president has expansive sanctioning powers under U.S. law that are not even close to being exhausted with regard to Syria.

Third, the United States needs to raise the profile of this crisis much higher. Security Council resolutions are not enough.

ACKERMAN: A formal international contact group should be established with the explicit mission of protecting Lebanon's sovereignty and independence.

Further, I believe the president should appoint a single figure in the United States government to be responsible for managing this crisis.

Fourth and last, the House has twice and the Senate once passed resolutions supporting Lebanon and pledging our continued readiness to put our mouth -- our money where our mouth is.

Currently, we're getting out-bid in Lebanon by two countries, whose combined GDP is just a third of our national defense budget. If you believe we need more resources to prevent disaster, Madam Secretary you have to ask for them. That support is here.

Madam Secretary, I know that you and the president have more than enough to handle. Your plate is full. But there's not going to be another chance to save Lebanon. We have to act now.

I summarized these points in a letter that I will give to you, but in the remaining time, I'd like to hear your initial response.

RICE: Thank you very much, Congressman.

First of all, I think that there are a number of ideas that we have been -- you've cited that we've been looking at and others that they will very well be worth doing.

So, thank you for your letter and we'll examine it very closely.

I'm a very firm believer in the point that Lebanon is really one of the key elements in getting a policy that will promote moderation and be able to resist extremism. And we've tried to be very active in Lebanon.

I would say to you that the diplomacy on Lebanon is extremely active right now. I was with my French counterpart just a few weeks ago on this issue, with my British counterpart about it just a couple of days ago.

We are working also on the premise that -- or on the basis that there should be no effort to make Lebanon in any way set aside constitutional processes that would lead to a president of the United States of America would consider illegitimate in some fashion.

Now, the Lebanese are having their discussions. But we know who our allies are in Lebanon and we're in very close contact with them about what is acceptable to them and what is not.

The president, for instance, met with Saad Hariri just, I think, about 10 days ago. So -- and Walid Jumblatt was just here and met with Mr. Hadley.

RICE: I was unfortunately out in the Middle East.

But we've been very active with the March 14th group, and we're going to stay active with them.

We are trying to call attention to the fact that the Syrian and Syrian-backed forces are trying to either intimidate or literally destroy the very people who would be able to bring about a democratic solution in Lebanon.

So, we're very focused on this issue, Congressman.

We are trying, as well, to make sure that the tribunal is fully funded, so that it can go ahead and begin its work.

Mr. Brammertz is about to make a report pretty soon. The tribunal needs to be ready to go.

As to resources, we requested and received $770 million in the last supplemental. We believe that that is the appropriate amount for now. It includes budget support; it includes security support.

And I would just note that if you talk to most Lebanese, when they faced this challenge up in the Palestinian camps against that, sort of, Al Qaida-look-alike operation, it was really American help in terms of ammunition and support that arrived with unaccustomed speed to help the military to carry out that task.

Admiral Fallon was just there. Undersecretary of Defense Eric Edelman was just there. And so, we are pressing very hard ahead with our allies in Lebanon.

But I'm very much where you are: We need to do as much as we can because this is a crucial moment for Lebanon. And I welcome very much looking at your ideas.

LANTOS: The gentleman from California, Mr. Rohrabacher?

. DANA ROHRABACHER, R-CALIF.: Thank you very much.

And I'd like to thank the secretary of state for all of her hard work.

And we watched you on television all over the world. I'm so surprised to see you here today, when just a few days ago I saw you overseas. I could not function that way, and I'm just -- we're very proud that we have a secretary of state that seems to have the not only mental but personal, physical strength of Margaret Thatcher, who was very strong.

RICE: That's high praise. Thank you.

ROHRABACHER: A very strong lady, as we all know.

At this point, it appears that we've got irreconcilables on both sides of the Israeli-Palestinian situation, as well as we've got voices of moderation and compromise on both sides.

ROHRABACHER: It appears from your testimony and from what we've heard today that the voices of moderation and compromise -- we are doing our best to back them up, but they are in a very -- how do you say? -- weakened position, and we're trying to strengthen that position. Is that a correct summary?

RICE: Yes.

I think they're not -- I wouldn't say they're in a weak position, because I think they really do represent the great majority of the Palestinian population. But the other side, the extremists, are getting very strong support from countries like Iran and to a certain extent Syria.

ROHRABACHER: Well, there are irreconcilables, as I say, on both sides of this issue.

And one of the issues that I think needs to be addressed before those voices of moderation can actually hold, carry the day, is the issue of water. And I think that that's an issue that quite often we miss.

And the fact is that I believe that, for example, Israel, I understand, receives a significant amount of its water from the aquifers under the West Bank, which makes them, of course, less willing to compromise on territory, because they need the water.

And I also understand the Palestinians have a significant water- consumption problem in that they don't consume as much water as ordinary people in different places consume because they just don't have it.

Would you think that perhaps some concepts like the Red Sea-to- Dead Sea project, if we could promise them support for that, which would dramatically increase the water supply in that part of the world, could play a role in finding peace?

RICE: Well, you are right that water has been an issue. As a matter of fact, it is named as one of the final status issues because it is just so important to both sides.

They are talking about that in the Olmert-Abbas channel. And there may be opportunities to help with various technical measures, with various economic projects.

Desalinization has helped a lot.

ROHRABACHER: Right.

RICE: And, as you know, the Israelis are probably the world leaders in the ability to do desalinization.

And so there probably is a solution to it. But you're right, Congressman: There has to be a solution because that is one of the issues that continues to divide.

ROHRABACHER: I'm glad to hear that that's on your radar screen, because I believe that once we really put some effort in it, we can prove some good will to both sides on that issue and underscore the moderates.

ROHRABACHER: About the vote that we had here a week ago or so -- two weeks ago on the Armenian question that officially has enraged the Turks, I think that people should understand -- and I'd like your opinion on this -- it's just that the Turks -- that vote in no way was an anti-Turkish vote.

And I think I speak for my colleagues here.

That vote was a human rights vote and a recognition of a violation of human rights.

But the Turks should understand and the Kurds should understand that that in no way would mean that we would tolerate attacks by Kurdish guerrillas on Turkish soldiers and Turkish civilians.

And, quite frankly, the Kurds should understand that we will support the Turks' right to retaliate if, indeed, Kurdish terrorists go across the border and murder Turkish citizens and soldiers.

Is that our position?

RICE: Well, clearly, we have said the PKK is a terrorist organization. And we've clearly said that the Turks should not have to sustain attacks from havens in -- across that border in Iraq.

We have cautioned that retaliation of cross-border raids and the like and cross-border operations would have a destabilizing effect, and that has been the course of our conversation. And we've encouraged everyone to work together toward a solution that does deal with the terrorist problem but doesn't destabilize northern Iraq.

If I may, though, Congressman, on the Armenian resolution -- and I recognize that it was a difficult vote for some who supported the administration's position on this, because I know it's difficult -- there was a reason that we felt very strongly that this resolution should not go forward.

This is a very delicate time with Turkey. It is a time when it is going through a major transformation internally. We have extremely important strategic interests with the Turks.

RICE: This is something that was a horrible event, in the mass killings that took place, but at the time of the Ottoman Empire. These are not the Ottomans.

ROHRABACHER: Right.

RICE: And what we have tried to do instead is to get the Turks and the Armenians to work together to look to their future.

I had the Armenian prime minister in yesterday. And I said to him, "You have to understand that Americans, who are always accused of being too forward-looking, not looking back enough, really do believe that it's important that Armenia and Turkey move forward." And I encouraged him to reach out to the Turks, at the civil society level and the like.

But I continue to believe that the passage of such a resolution of -- the Armenian Genocide resolution, would severely harm our relationship with Turkey.

ROHRABACHER: The reason why...

LANTOS: The gentleman's time has expired.

Mr. Faleomavaega?

DEL. ENI F.H. FALEOMAVAEGA, D-AM. SAMOA: Thank you, Mr. Chairman.

At the outset, Madam Secretary, I want to commend you and Assistant Secretary Chris Hill for your work in the six-party talks with North Korea, trying to prevent the dangers of a nuclear confrontation in the Korean Peninsula.

And you succeeded in bringing the North Koreans to negotiate. And some credit also should be given to the People's Republic of China and its leaders in doing this.

According to media reports, Madam Secretary, you have been very persistent within the administration to give diplomacy and true statesmanship a chance to work its way through resolving some of the most difficult issues facing our nation and the world today. And again, I commend you for doing this.

I've learned from experience, Madam Secretary, that I need to present you my questions so that -- in a way that you can then choose how you may want to respond.

My first question is that Vice President Cheney, in his recent statements, made comments to the effect that there would be very serious consequences if Iran continues on its present course to develop a nuclear weapon, which Iran flatly denies.

We're struggling now with the two wars we're engaged in now, in Iraq and Afghanistan. Our military force structure is stretched thin. And it seems to me that this is the same, similar rhetoric that led us to war against Saddam Hussein.

My question on this particular phase: Will the administration seek new authority from the Congress to wage war against Iran? Or does the administration feel it doesn't need permission from Congress to do this? Or will it be just a shoot first and then ask questions later?

FALEOMAVAEGA: Next question is, I noted in your statement that the need for more democracy, more freedom and more tolerance among countries in the Middle East. Noted with interest that we're about to provide an arms sales -- a $13 billion arms sales to Egypt. And I suspect probably a multi-billion arms sale also to Saudi Arabia.

Israel, being the only true democracy in the Middle East, I can see how we can justify -- accept a $30 billion arms deal also with Israel.

My point here is that Russia and China are also selling arms to Iran, it's my understanding. And I'm taking that the administration's position that this is not creating a regional arms race. And I have to respectfully disagree that we are going to create an arms race if our government intends to provide arms to these various countries that are non-democratic in the Middle East.

Third question...

LANTOS: I want to caution my friend that if he wants an answer from the secretary during the course of the hearing, he better stop now because I don't think he can go beyond and ask more questions. Or you can ask more questions and then the responses will be in writing.

But I don't wish to see my colleague use up his five minutes and then the secretary take additional time to respond.

FALEOMAVAEGA: Thank you, Mr. Chairman.

Madam Secretary, could you respond to those questions?

RICE: Thank you.

First, on Iran, the president has been very clear that while he doesn't take any of his options off the table, he's committed to a diplomatic course on Iran.

RICE: And I think that that is where we are focused.

I would just say that when one speaks of serious consequences, there also have to be serious consequences in diplomacy.

I am not one who believes that diplomacy in the absence of disincentives for states really works. And so, in this case, we are trying to impose consequences on the Iranians for their refusal to adhere to two Security Council resolutions.

We have sanctioned a number of entities. We've encouraged states not to put investment credits into Iran. Hank Paulson has talked about the investment risk of dealing with Iran, as well as the reputational risk.

And so, we are trying to marry our diplomatic efforts with consequences if Iran does not accede.

As to the package of arms sales that we are pursuing -- and the details of many of these are still being negotiated, Congressman, and so I would not jump to any conclusions about specific numbers in some cases -- but the issue here is a security environment in the Gulf and in the Middle East proper that we cannot allow to turn against our strategic allies in the region.

It is the case that the Iranians have significantly increased their own defense capabilities. It's not an issue of causing an arms race, it's an issue of being able to respond to what are serious security challenges and potential threats to our long-time allies.

And it's not -- it's nothing new, in fact. We've had these security relationships in the -- in the Gulf for decades.

So this is to help our allies to deal with emerging security threats.

It does not mean that we don't continue to have very candid discussions about democracy, about reform. I just recently had those discussions again in Egypt.

But it does mean that we have to be attentive to not creating a security environment in which the Iranians have the upper hand.

LANTOS: The gentleman from Indiana, Mr. Pence?

PENCE: Welcome, Madam Secretary. Good to see you here before the committee. The last time we spoke, I was in a pickup truck in Indiana.

(LAUGHTER)

And I will always be more comfortable there than here.

But thank you for coming. Thank you for your leadership.

And, tangentially, since the administration gets no credit for good news in Iraq, let me call to your attention today's Associated Press story that reads: "October is on course to record the second consecutive decline in U.S. military and Iraqi civilian deaths in a row. And American commanders say they know why: The U.S. troop increase and an Iraqi groundswell against Al Qaida and Shiite militia extremists," close quote, is the cause.

Thank you for your diplomatic work on the ground in Iraq. Thank you for the progress that it's making, reported or unreported.

PENCE: I want to speak to you about Annapolis and get your sense of things.

I admire your statement earlier that the objective is a secure and stable peace in the region. The president said that was preconditioned on, quote, "non-negotiable demands of human dignity."

As an unapologetic champion of Israel, let me say I'm very interested to know going into Annapolis what the substance of that means.

Specifically, you may recall, I think it was a week after September the 11th, when the word of the creation of a Palestinian state first was rumored in the newspapers. We met shortly thereafter on Capitol Hill to speak about it in your prior role.

What was a rumor a week after 9/11 has been reported to be the stated objective of administration policy. I heard it driving in this morning: that the goal of Annapolis is to create a Palestinian state.

I'm troubled by that. Shouldn't the goal first and foremost be a secure, stable and permanent Israel as a Jewish state, and then a just settlement for other people in the region?

Israel is our ally. America was instrumental in her rebirth in 1948.

And I would just ask you very sincerely, because I think I know your heart on this, I think I know the president's heart, I don't question that at all, but do we put ourselves tactically at a disadvantage when we state that the objective of these negotiations is the establishment of a Palestinian state, as opposed to saying the objective is the cessation of violence, the objective is that all parties would recognize the right of each party to exist, the objective is a humane solution, and then allow that to -- if that leads us to the creation of a Palestinian state, then so be it?

PENCE: But I'd love to know what your definition of success is.

Can you speak specifically to those reported accounts that the objective of this conference is the creation of a Palestinian state, and what your mentality and the president's mentality going into this conference is?

RICE: Thank you.

Well, first, Congressman, let me just note, you've mentioned September 11th. And I think that, after September 11th, one way that the United States and the Israeli leadership actually got closer was in our joint belief that terrorism was a significant, indeed existential, threat, not just to Israel but also to the United States.

And the president made very clear early on that you could not with the one hand condemn Al Qaida and on the other hand hug Hamas.

And it was the president who said, in effect, that there could be no such thing as a freedom fighter in that context; this was that a Palestinian state could not be born of terror.

It is why we rejected the leadership of Yasser Arafat. It is why the president then called for a democratic leadership in the Palestinian territories to lead their people to statehood.

And you now have in the Palestinian territories a democratic leadership and one that we believe is really trying to fight terror.

They don't have all the capability that they need. But one of the things that was very encouraging for me when I was in the region recently is there isn't much argument that these are people who want to do the right thing. And so I think the circumstances have changed very much.

I would say that the conference will try to lay a foundation for the parties to come to the establishment of a Palestinian state.

The -- perhaps it was put best by Ariel Sharon, when he talked about, in his Herzliya speech, the need for -- to divide the land and the need to make painful compromises because the Palestinian state was in Israel's interest.

I think that what people have come to recognize is that the way that you will ultimately secure a democratic Jewish state called Israel is to have, living side by side in peace, a Palestinian democratic state.

And so the goal is the establishment of a Palestinian state; not one born of terror, as I think it would have been in earlier times, not one that is unable to carry out its security responsibilities, not one that is not democratic and delivering for its people.

But I would defend the statement that there needs to be the establishment of a Palestinian state in order for there to be, in the long run, a stable and secure Jewish state.

And I think that was the reason that the father of the settlement movement, Ariel Sharon, moved from the concept of a greater Israel to the concept of dividing the land and having two states, one for the Palestinian people and one for the Israeli people.

LANTOS: The gentleman from New Jersey, Mr. Payne?

REP. DONALD M. PAYNE, D-N.J.: Thank you very much.

It's good to see you again, Secretary.

RICE: Good to see you.

PAYNE: As we know, this is about the Middle East, but the war on terror I think includes other areas. And Africa, as you know, is one of the areas we're concerned about. And I have three quick questions about three countries involved in the whole war on terror, so to speak.

The government of South Sudan suspended its participation with the government of Sudan because of the obstacles that the government of Sudan, Bashir's government, has put in as relates to the comprehensive peace agreement.

As you know, Senator Danforth -- and I think it was one of President Bush's greatest achievement, at least in Africa, with the comprehensive peace accord.

And so I wonder whether the administration is urging the government of Sudan to implement the CPA.

Secondly, about the U.N. peacekeepers and A.U., Bashir has still been putting in roadblocks to bringing peacekeepers into Darfur. And I wonder if you could comment on that very quickly.

Secondly, the Ethiopia-Eritrean situation, and bottoming the demarcation of the borders had not been accepted by Ethiopia, our big ally in Africa.

And I wonder if our administration is urging Ethiopia to accept the agreement that they said they would accept from The Hague as relates to the border dispute between Eritrea and Ethiopia.

PAYNE: Finally, the question of the 193 people that were killed. I had legislation that finally passed this House and this committee and the House support from the chairman and the ranking member -- the chairman, anyway. Are we putting pressure on our friends, Ethiopia, to do the right thing?

And finally, Somalia. We have the Ethiopians in Somalia. Transitional federal government just arrested the head of the United Nations food program just a few days ago. Areas are continuing to deteriorate.

What are we doing to try to include the ICU, the Islamic Courts Union, with the transitional federal government in Somalia so that we can bring a peace to that region?

Thank you.

RICE: Thank you. Thank you, Congressman Payne.

And let me begin with southern Sudan.

Yes, we are -- I'm, personally, very concerned about the CPA, which, of course, United States took the lead in getting negotiated. It ended a civil war that had cost tens of millions of lives. It's something that we really must make work.

We've requested, you might notice, in the supplemental $70 million for southern Sudan because we believe that we need to make a more active effort on some of the reconstruction efforts in southern Sudan and to help strengthen that government.

We are very concerned about the behavior of the north, about Khartoum, in dealing with southern Sudan about, obviously, their behavior in Darfur and eastern Sudan. But their behavior in the CPA has also not been good.

And I have just recently received a report from Andrew Natsios, who has been spending some time in Sudan also working on Juba. And I will be looking at what policy we can undertake, because this is something that cannot be lost, the CPA.

With all due need to deal with Darfur, we don't want the southern Sudan piece of this to unravel.

On Eritrea/Ethiopia, yes, we do encourage and urge the acceptance of the U.N. effort there.

RICE: It has been difficult to talk to Eritrea, frankly. We've had trouble getting them to talk to us. And I sent our assistant secretary to talk with Mr. Isaias, and he didn't see her.

So while we are saying to the Ethiopians that certain things need to be done, it would be very helpful if the Eritreans would show a little bit more interest in what the United States has to say.

In terms of Ethiopia and the current situation in Somalia, yes, we are encouraging -- and Ethiopia is encouraging -- the transitional administration there, government there, to reach out as broadly as possible to the clans, to members of the ITU who are not engaged in terrorism.

It's a complicated situation. As you know, there are some people who are in Somalia that we really believe have strong Al Qaida ties, and, obviously, they need to be kept as far away from any further government there.

But, yes, we are working very closely.

I don't think there's any doubt that the Ethiopians don't want to stay in Somalia. And one of the things that we're trying to do is to work with the African Union to get that security force, the peacekeeping force, ready for Somalia.

The A.U. has its challenges because they're trying simultaneously to raise forces for Sudan, for Somalia, to keep efforts going in Cote d'Ivoire and in other places. So it's a challenge.

But we are very attentive to what needs to be done in Somalia.

LANTOS: The gentleman from South Carolina, Mr. Wilson?

REP. JOE WILSON, R-S.C.: Thank you, Mr. Chairman.

And thank you, Madam Secretary, for being here. I appreciate your extraordinary successful efforts of promoting democracy, opportunity and peace around the world.

I, last month, was in Iraq. I saw the tremendous progress being made. But all of us are concerned: What is the State Department doing to reduce corruption in Iraq?

RICE: Thank you.

And, first of all, we fully acknowledge that there is a serious corruption issue in Iraq. Not all of it is a new issue. I would just note that some of these problems are -- have been endemic. Even under dictatorship, there were problems with corruption.

RICE: But it is now our responsibility to press the Iraqi government as hard as possible to deal with corruption.

We have spent about $46 million -- almost $47 million on anti- corruption programs and measures. We've supported their own anti- corruption panel. We've supported judges who carry out these corruption trials.

One of the problems that we have is we very much have to protect the identity of people who will come forward and report corruption. Because, as you might imagine, in these circumstances it would be dangerous for people to report corruption, and if we want to keep a steady stream of people who are going to report it, we're going to have to show that we don't play fast and loose with the information that they give us; that in fact we protect them and protect the information.

So we're working very hard on it. We have not been shy about saying publicly and saying to the Iraqis that corruption is a pervasive and serious problem and that we intend to help them deal with it. But it is something that we are very concerned about.

WILSON: And also, I have the perspective, my oldest son served for a year in Iraq. I'm very proud of his service there.

What do you see as the most recent achievements in terms of infrastructure development for the people of Iraq?

RICE: I think the most recent is that -- just let me say, electricity is finally up in Iraq, and that is a good sign.

But I think what has happened, Congressman, is that we have found a formula that puts the reconstruction efforts more at the local level where it can get to the people.

Some might say we, the United States of America, should have understood this one. If you're sitting in Cincinnati or you're sitting in Baltimore, you would look not to Washington, D.C., to deliver certain kinds of projects, but to local government. And we've been really working hard on local responses to infrastructure and reconstruction.

It has helped also, it's an iterative process -- it has helped us to get local people engaged in the security.

And so in a place like Anbar, when we were out in Anbar, one of the interesting parts of that whole discussion was that the Anbari sheiks were clearly quite proud of what they had done in terms of helping to expel Al Qaida and being our ally, but they were hammering their central government about getting resources out to Anbar so that they can deliver for their people.

And that kind of development of local responsible government, that close to the people can provide infrastructure support, I think is extremely important.

RICE: We've provided clean water for Iraqis. We've provided a lot of the infrastructure that will lead to more energy production.

But probably the real break through -- and it goes also to how the American military is operating -- operating in classic counterinsurgency mode, where you have to expel the bad people, but you also have to work with healthy forces in the region.

And we've developed, with the military, 10 embedded PRTs, we call them -- provincial reconstruction teams -- where our diplomats and USAID people and civilian experts are literally embedded with brigade command teams and can both clear areas and then help in infrastructure development.

WILSON: Thank you so much for your service. And I'm so grateful for your backing of our troops and the cooperative and partnership on behalf of our country.

Thank you very much.

RICE: Thank you. And thank you for the service...

LANTOS: Before recognizing my next colleague, I ask security to remove two people from the audience who are disrupting the proceedings.

And I want to caution all members of the audience, I will not allow the holding up of signs or making hand signals.

So, the two individuals will now be removed.

(UNKNOWN): It's the gentleman right in front of the camera, if you can't find him, officer.

LANTOS: That man needs to be removed without delay. And the woman across the aisle.

PROTESTER: Me, sir?

LANTOS: Yes.

PROTESTER: (OFF-MIKE)

LANTOS: Gentleman from New York, Mr. Engel?

REP. ELIOT L. ENGEL, D-N.Y.: Thank you, Mr. Chairman.

Madam Secretary, reports in the paper that Iraq has agreed to award $1.1 billion in contracts to Iranian and Chinese companies to build a pair of enormous power plants is very disconcerting. The Iraqi electricity minister said this.

To me, the expansion of ties between Iraq and Iran makes no sense at all, at a time when young Americans are dying in Iraq and we're spending billions and billions of dollars.

I'm wondering if you could tell us about this. And what have we said to the Iraqis about this?

Obviously, any expansion of Iranian interest is a concern for the military, a concern for the United States. And while we're clashing with Iran on nuclear issues and Iranian support for armed groups in Iraq, to me this makes no sense at all. It's almost as if the Iraqi officials are really sticking it to us.

RICE: Thank you, Congressman.

On Iran, we do not believe that the expansion of Iranian ties in this way is a good thing, and we've made that clear.

I would note Iran is an Iraqi neighbor. They've had economic interests in Iraq going back a very long time. But the Iranian -- the Iraqi government itself has talked about the influences of Iran in the region. And so, we are -- we've raised it with them.

In terms of China, I don't think it's quite the same situation. This is a country that I expect will invest in many different parts of the world and has any number of economic relationships with our friends, our allies and, in fact, with us.

But on Iran, we have raised the issue.

RICE: It's an independent government with its independent decision-making. But I can't disagree with you.

ENGEL: Thank you.

As we've discussed many times before -- and you know I was the author of the Syria Accountability Act -- we know that Israel recently bombed inside of Syria. I'm wondering if you could shed any light on that.

I'm very concerned about the Syrian -- recent Syrian military buildup. I'd like your comments on that.

Have we expressed to Russia our concern over military sales to Syria?

And in light of Syria's negative behavior, why has the administration not taken further action to sanction the Syrian regime as outlined in the Syria Accountability Act?

RICE: Well, I want to thank you again, Congressman, for the Syrian Accountability Act, which we have used.

And we are often looking for the right timing to do certain things. I think earlier we were talking about the upcoming elections in Lebanon and the ability to send signals there. So I assure you, we continue to believe that that's an important part of our toolbox.

As to Syrian arms transfers from Russia, yes, I did raise it. And in fact I said to the Russians, who went out of their way to say, "Well, there was nothing illegal," that not everything that is legal is smart, and that when you're dealing with an area of the world that is this complex and where the Syrians are engaged in the behavior that they are, this is a destabilizing policy. And we will continue to make that -- to make that point.

As to the reports that have been in the newspapers, I can't comment.

I can only say that we have continued to be concerned about proliferation -- concerned about proliferation from a number of countries. And we are going to continue to try to make sure that the president's pledge that weapons will not -- these terrible weapons will not end up in the hands of the most terrible people can be met.

ENGEL: Can I ask you about Israel's qualitative military edge?

I'm very concerned, obviously, that Israel keep its qualitative military edge and there's some concern about the sale to Saudi Arabia. Can you assure that that will not affect Israel's qualitative military edge?

RICE: We are absolutely committed to Israel's qualitative military edge. Defense Minister Barak was just here and we had discussions with him. We have also noted that the Israelis have said that they understand why these arms sales need to be made.

But we are absolutely attentive to it and have no intention of allowing it to erode.

ENGEL: Madam Secretary, all reports indicate that Hezbollah has restocked and rearmed; that weapons are coming in through Syria from Iran.

Why are we not insisting that Hezbollah -- arms to Hezbollah be stopped? This, to me, is a very, very serious provocation and obviously could prompt another conflict in the region.

RICE: Well, we are insisting that that border be better manned and guarded and technical assistance -- the Germans are trying to help the Lebanese with technical measures to prevent arms transfers across that border.

We are looking, Congressman, at what U.N. resolutions might have been violated, not just in regards to 1701, but resolutions of 1747 that have to do with Iran.

And so, we're looking very hard at how to do this.

I think it goes without saying that the Siniora government is our best ally in this regard, but that they have their plates a bit full these days in what they're trying to do. And part of this is to be measured in what we ask them to do at any particular given point in time.

They were brave enough to go to the U.N. and ask for the tribunal. They were brave enough, through the Lebanese army, to fight those terrorists in those Palestinian camps. They're trying to face down Hezbollah. They're trying to face down those who are intimidating their legislators.

So, it is, in part, a judgment about how we deal with them in requiring certain things of them.

But I want you to be sure that we agree with your assessment that it's a very serious matter and we're trying to get them help.

ENGEL: Thank you, Madam Secretary.

LANTOS: Gentleman from Arkansas, Mr. Boozman?

REP. JOHN BOOZMAN, R-ARK.: Thank you, Mr. Chairman.

When Ambassador Crocker was here not too long ago, I asked him about a concern that I've had really for quite a while about the quality of the information that we're trying to put out: the equivalent of Voice of America in the past.

And I know, in travelling with the region, you really get mixed results when you visit with the leaders of the country.

BOOZMAN: Some of it seems to be very, very good. Some of it seems to be, as they would term, silly or inappropriate or whatever. I mean, very, very mixed reviews.

I guess my frustration is a little bit, you know, we're dealing with some problems that are very, very difficult. That seems that that's one that we could fix.

And in visiting with Ambassador Crocker, when he was testifying, he shared concern that we were still, maybe, lacking a little bit in that area.

Could you comment on that, and...

RICE: Yes.

I think, first of all, we have gone, as you know, to great lengths to reorganize, under Karen Hughes, Public Diplomacy, to make it possible for our ambassadors around the world to respond. And we're working very hard to try to make sure that our messages get out.

Now, in Iraq, frankly, we've not -- we're doing better, but it's been insufficient. And one of the things that Ambassador Crocker asked for was a really first-rate Arabic speaker as his public affairs officer, who can go on television and, in good Arabic, defend our policies.

Because one of the problems that we have -- it's really not so much Iraq TV; it's that everybody in the Middle East watches Al Arabiya or Al Jazeera. And if you're not a part of that mix, you're not a part of the dialogue.

And so he has requested that. I think we've identified the right person for him.

We're going to beef up that operation. Because when we have breakthroughs like we have in Anbar, it's important that the Iraqi people know, and it's important that the region knows.

And one of the things that I've been encouraged by is that the Iraqis, who are new at being politicians in some ways, are showing a willingness to get out more, go out among the population, have that covered by television. It's an extremely important part of the effort.

But we've responded to Ambassador Crocker's desire to have a more active public affairs operation.

BOOZMAN: Thank you, Mr. Chairman.

LANTOS: The gentleman from Massachusetts, Mr. Delahunt?

REP. BILL DELAHUNT, D-MASS.: Yes.

Madam Secretary, you've made reference to Syria and the concerns that you've expressed about Syria and their behavior in the region.

The president at one point in time cited their legacy of misery and torture.

I'd like to ask you a specific question about a Canadian citizen by the name of Maher Arar.

I know that you're obviously familiar with our treaty obligations and federal statutes against torture. The record of Syria on torture is expressed in the State Department's annual country reports. It can only be described as horrific. The report references 38 varieties of torture that they utilize, particularly when they are in the process of securing information.

My question is, given their record, why did the United States rendite Maher Arar, a Canadian citizen, over his objections, to Syria without informing the Canadian government?

RICE: Well, this is a case in which I think there were some concerns expressed and some of them were, frankly, appropriate; not about our desire to make somebody go to a place where we thought they might be tortured. That's not the point. We absolutely try to ensure that that will not happen.

But our communication with the Canadian government about this was by no means perfect. In fact, it was quite imperfect.

Our efforts to untangle what happened here took some time.

I think we and the Canadians do not have exactly the same understanding of what is possible in the future for Mr. Arar, in terms of travel and the like.

But we have told the Canadian government that we did not think that this was handled particularly well in terms of our own relationship, and that we will try to do better in the future.

DELAHUNT: You're aware of the fact that he was tortured for a year?

RICE: I am aware of claims that were made, Congressman.

DELAHUNT: Are you aware of the...

RICE: I'm aware of claims that were...

DELAHUNT: ... the commission...

RICE: I'm aware of the Canadian...

DELAHUNT: Inquiry commission...

RICE: Of course, yes.

DELAHUNT: Right -- by Justice O'Connor?

RICE: I'm aware of the inquiry.

And as I said, we do not think that this case was handled as it should have been. We do absolutely not wish to transfer anyone to any place in which they might be tortured.

DELAHUNT: Did you rely on diplomatic assurances from Syria that he would not be tortured?

RICE: Congressman, I will get you a full accounting of this, because, frankly, at this point, my own memory of some of the details of this case has faded a bit. But let me get back to you.

DELAHUNT: I'll be looking forward to that communication, Madam Secretary.

RICE: I'll be very happy to get it to you.

DELAHUNT: Thank you.

LANTOS: The gentleman from South Carolina, Mr. Barrett?

BARRETT: Thank you, Mr. Chairman.

Madam Secretary, what an honor to have you in front of the committee today.

I agree with your assessment in the Middle East about Iran. In my personal opinion, the most dangerous thing in the entire region is a nuclear Iran. And I know that they have a lot of ties into Iraq, especially with the Shia militants who are trying to halt a lot of the progress there.

In a recent speech to the Washington Institute for a Near East Policy, President Cheney stated, quote, "The Iranian regime needs to know that if it stays on present course, the international community is prepared to impose serious consequences," end quote.

When Congressman Hamilton was here talking about the Iraqi report, I asked him the question: if we knew for a fact that Iran had led attacks on American soldiers and had been involved in killing American soldiers, he said -- I asked him, "Isn't that an act of war?" which he basically said, "Well, yes, Congressman, it is. But what are you willing to do about it?"

And I guess that's my question today, Madam Secretary. I know we have sanctions. And I know that options have been talked about. And I know that we are taking this very seriously, because it scares me to death.

Are our sanctions working? What are we doing to increase our sanctions? What sanctions are the best?

And if sanctions don't work, kind of tell me what's the next option, please.

RICE: Thank you.

Well, we believe that an enhanced diplomatic effort that really does, now, draw everybody who's in the international financial system into a posture that really will not allow Iran easy access to the international financial system can have a quite important effect.

I would just note that there have been many banks that have left Iran, that refuse to take their assets. There are -- they are losing investment. They need investment in their various sectors, including in their oil and gas sector.

And so, we're working very hard diplomatically.

As I said, we've not been limited to what happens in the U.N. Security Council. We've also, ourselves, sanctioned a number of entities. And we're going to continue to look at ways that we can do that, because that gives us additional leverage.

I would just note, too, that inside Iraq, the president has told our military to be very active against their agents who are engaged in activities that harm our people or that might harm innocent Iraqis, or support for militias, and particularly in the south.

RICE: And some of these stories that you see are because we see these links, so that some of the people who've been picked up, fairly high-ranking Iranians, are important -- it's important to let Iran know, as Ambassador Crocker told the Iranian ambassador, that their people aren't going to be safe anywhere in Iraq if they keep up this kind of activity.

Now, occasionally we will -- there'll be some people who have no further intelligence value and can be simply thrown out of the country. But we are making an active effort, and we get good value from learning about their activities from picking up some of these operatives.

And I think, while I've emphasized the sanctions piece and the U.N. track for the nuclear piece, I don't want to leave the impression that we aren't very activity pursuing them when we catch them engaged in some of these hostile activities.

BARRETT: Is there truly a sense of urgency in implementing stronger sanctions that are going to be effective, Madam Secretary?

RICE: There is a sense of urgency.

We have -- one reason that we've continued to pursue the track outside of the U.N. Security Council is that the Security Council track, to the degree that we can keep that moving in unanimity, it's a good thing, because the Iranians then can't claim that it is just the United States that is sanctioning them, but rather that it's Russia and China.

And I know for a fact that after the last Security Council resolution they were stunned that it was 15-0. It set off a debate inside of Iran, with some voices saying, "We're being isolated by the policies of President Ahmadinejad."

We want to keep that debate and that clash going on inside of Iran. And so it's important to keep this track in the U.S. moving in unanimity if we can.

But it's also important for the United States to have its own policies that deny Iran access to the international financial system. My colleague Hank Paulson and I work extremely closely together on these designations, and it is important, as has been the discussion now in the European Union, that others consider what further steps they can do. And in this regard I would just note that the French and the British have been particularly helpful.

LANTOS: The gentleman's time has expired.

The gentlelady from California, Ms. Watson?

REP. DIANE WATSON, D-CALIF.: Madam Secretary, welcome, and thank you for the time you're spending.

We've been in Iraq occupying that country for four and a half years, and we keep asking the Iraqis to step up and reach a political compromise while our troops are present on their soil.

And our troops have served with courage and valiancy. But military heroism cannot deliver political success, and continuing to sacrifice that heroism with no promise to political success is to me a waste of American resources and lives.

So my question is, what are your expectations for the current government in Iraq to step up to the plate and create a truly viable government that can successfully engage the Sunnis, the Shias and the Kurdish elements?

And let me attach my second question and you can respond with the rest of the time.

I just got a clipping from the press, and I think this was in the Sacramento Press, that the Turkish warplanes and helicopter gunships attacked positions of Kurdish rebels (inaudible) rugged border with Iraq on Wednesday, as Turkey's military stepped up to its anti-rebel operations.

So we now see that Turkey is ramping up its efforts to dislodge Kurdish rebels. And how serious do you see that? And will it mean that Turkey will enter into the fray in Iraq? And what is the department doing to stave off...

RICE: Thank you, Congresswoman.

First of all, on the -- let me take the Turkey piece of this first.

We've been very actively engaged particularly for quite a long time on this, but we've stepped up our activities after the recent attack of the PKK that killed 17 Turkish soldiers.

As I said, I was personally involved in this in talking to Prime Minister Erdogan.

We don't see that any effort across that border by the Turks is going to help with the situation. These people live in very remote parts of --northern part of Kurdistan.

But we do see that the Iraqis have an obligation to do everything that they can to prevent these attacks from taking place.

I can't comment about the specific report that you have, because I don't know of this particular -- this alleged attack. I do know...

(CROSSTALK)

WATSON: I'll share it with you.

RICE: Thank you.

There's activity back and forth across that border, unfortunately, quite a lot, and very often is there. But we have said to the Turks that a major -- some kind of incursion into Iraq is only going to cause further instability. And what we've encouraged is joint work by the Turks, the Iraqis, the Kurds to deal with the PKK -- all of whom, by the way, consider the PKK to be a terrorist organization.

So this is not the Iraqis saying to the Turks, "Well, you don't have a problem." The Iraqis agree that there's a problem. It's a question of how to deal with these PKK terrorists. And we're working very actively on that.

The Iraqis were -- the Turkish prime -- Turkish foreign minister was in Iraq yesterday. The Iraqis will send a senior delegation to Turkey. They have agreed that there's some actions that should be taken. So that is a very active front for us.

In terms of our own presence in Iraq, which, of course, is under a Security Council resolution and is under request by the legitimate government of Iraq that the multinational forces be there, including American forces, we agree -- I agree with you completely, this can't be won by military means alone.

What the military has been able to do is to create a somewhat improved security environment in which the Iraqis can turn to political matters. And we've, frankly, not been very pleased, we've been disappointed with the national reconciliation efforts at the national level, the passage of legislation like de-Baathification laws or the oil law. And we continue to press that.

But I think it would be a mistake to believe that nothing is going on politically in the country because they've been unable to pass these laws.

First of all, they have passed a lot of laws, including just recently a pension law that will allow all Iraqis, regardless to who they worked for, under what circumstance they worked, unless they are the worse of war criminals, to receive a pension. That is reaching out to that -- to a population that is disaffected.

They have improved their budget execution to the point that money -- which is mostly oil revenue, by the way, so they don't have an oil distribution law, but the money is starting to get to the provinces so that people in Ramadi or people in Fallujah can spend money on their populations.

The local governance that is coming up in the country is to me an extremely important sign of political development in the country.

So I would not by any means underestimate the importance of getting the national reconciliation to where we want. But it would be a mistake for any of us to ignore the significant local developments that are emerging and the relationship between the central government and those local developments. There are some 60,000 Iraqi citizens in and around Baghdad and the security effort -- security region in the Sunni lands who have volunteered for community protection, and many of them as a part of the security services.

So a lot is happening politically in this country, and I think it's worth recognizing that, while continuing to press very hard on the Iraqi government to pass the right law.

LANTOS: The gentleman from Nebraska, Mr. Fortenberry?

REP. JEFF FORTENBERRY, R-NEB.: Thank you so much, Madam Secretary, for joining us today. We're very grateful to have you.

Of late, we've made very good military progress in Iraq as a result of this new strategy lead by General Petraeus. But clearly the situation is very complex and dangerous and very fragile.

My following comments are not meant in any way to diminish your exhaustive efforts of diplomacy in the Middle East. But I wonder, given the security gains, if now may be an opportunity to create a new spirit of diplomacy in the region -- a diplomatic surge, if you will -- that engages the responsible international stakeholders, particularly Arab states, to help undergird peace and stability in Iraq, particularly given the recent gains.

We tend to have a lot of very good and helpful conversations, as we've seen today, about the complexities of situations in individual countries. But to create a -- again, a spirit in which the ideal of a collective security arrangement becomes the new governing paradigm, particularly given the opportunity coming up in Istanbul with the ministerial -- meeting of the ministers, I would just encourage and like to hear your thoughts on any potential developments that that meeting could produce, in terms of creating this new spirit of diplomacy in the region.

RICE: Thank you very much.

And I'm very glad that you mentioned this neighbors' conference. We've had one, of course, in Sharm el-Sheikh and now we'll have one in Istanbul. Because I think it could play exactly the role that you have suggested.

It will take some work.

RICE: It is not a region that is actually accustomed to thinking in collective political and security terms. It's, with us, been completely bilateral for decades.

There are two institutions that we're trying to use.

The Gulf Cooperation Council plus Egypt and Jordan has been one that has been much more active really for about the last year. It started at the UNGA a year ago, and has been very active to try to bring about that kind of collective mentality about security in the region.

And we talk in that group not just about the Palestinian and Israeli issue, not just about Iraq, but about Lebanon, about Somalia, about Sudan.

It's a place where we and our Arab allies, frankly, can have a common security vision of what we need to achieve.

There is also a Gulf cooperation security dialogue that we have. None of these are yet at the stage of institutionalization that they probably need to be. But, as you undoubtedly recognize and suggested in your comments, one has to, kind of, lay the groundwork and start people thinking in those terms, and it becomes more institutionalized over time.

One of the things that we're doing, that Ban Ki-moon has agreed to do, the secretary general of the U.N., is to put an office in Baghdad that would be a permanent structure, almost permanent secretariat for this neighbors' conference, so that it can have a, kind of, ongoing character, recurring character, rather than just being a meeting here and a meeting there.

So, those are some of the things that we're doing.

We do have a common view of many of these issues, particularly given the threat from Iran. And I think we need to make the best of it, to get a kind of more institutionalized response.

FORTENBERRY: That's an excellent point as well. The threat of the geopolitical ambitions of Iran is forcing, in some ways, a new paradigm of thinking collectively in the region.

So, thank you for your comments.

LANTOS: The gentleman from Missouri, Mr. Carnahan?

REP. RUSS CARNAHAN, D-MO.: Thank you, Mr. Chairman.

And thank you, Madam Secretary, for being with us again.

I really appreciated your comments about focusing on the division within the power structure in Iran and how we can take advantage of that situation. I think that, obviously, is key to part of our overall strategy.

Also coordinating international sanctions has to be part of this diplomatic surge in the area.

I am, though, concerned about part of our strategy that appears to be counterproductive, and that is with regard to some of the diplomatic preconditions that have been set for having engagement with Iran.

I'm also concerned about the escalating rhetoric that the president has used, talking about World War III and other kind of inflammatory rhetoric.

CARNAHAN: I'm also concerned about the press reports about the request for the $88 million for the B-2 bombers to be retrofitted to carry the MOP bomb designed for deep penetration in the earth. And most experts believe that's something that would be potentially used in Iran.

I guess the administration and you have talked about diplomacy as our first course of action. But I am concerned about the rhetoric, about the limits that harm those diplomatic efforts.

And I'd like you to talk about how, in the context of that, we can really begin push this diplomatic surge and not get to that slippery slope.

RICE: Well, I've said to my colleagues in many times that we do not want to be in a situation in which we're choosing among unpalatable alternatives vis-a-vis Iran.

And that means that we have to have the strongest possible diplomatic effort. But a strong diplomatic effort doesn't mean just sitting and talking with the Iranians. It really means showing that there are diplomatic, and indeed financial, consequences if Iran decides to adhere to what are the conditions of the international community, Congressman.

I think, as you know, it's not the United States that has simply said that they need to suspend their enrichment and reprocessing. It is the U.N. Security Council that has said that.

And there's a reason for that. And that is that it's very good to have talks with the Iranians if they're going to go some place, if they're going to be used as a smokescreen for Iran to continue improving its capability to enrich and, ultimately, to have the technologies that lead to a nuclear weapon. That's not a proposition to which we ought to subscribe.

And I think we've won that argument with our allies, even with countries like China. And that's why you're getting Security Council resolutions that demand that they top enriching and reprocessing. Suspend -- we've only said suspend. It's really, frankly, not that tough a condition. They could do it tomorrow.

And I've said that if they are prepared to suspend, we'll change 28 years of American policy and sit down and we can talk about whatever they want to talk about.

RICE: So I said when I was in Moscow, I think the question isn't why won't we talk to Tehran, it's why won't Tehran talk to us.

And I suspect that we do need to continue, as you suggested, to press forward in ways that will get the attention of those who want a better way.

And there are, I do believe, differences inside Iran. You see them in even their newspapers, where people criticize some of the more aggressive policies of Ahmadinejad.

We are on a diplomatic track. The president doesn't take his options off the table. But the president's made it very clear that he believes this can be resolved diplomatically. But, frankly, the international community's got to get a lot tougher if it's going to get resolved diplomatically.

That's the -- the Iranians are not a state, I think, that will change its behavior just through talking to them. There do need to be disincentives to their continued activities. And that's what we're trying to do with the Security Council resolutions, as well as the kind of designations that we sometimes do.

CARNAHAN: Thank you, Madam Secretary.

LANTOS: The gentleman from Florida, Mr. Bilirakis?

REP. GUS BILIRAKIS, R-FLA.: Thank you, Mr. Chairman.

Secretary Rice, thank you for your outstanding and dedicated service to this nation. You have served with distinction and honor. And we are privileged to have you testify before us today.

I, too, have a particular concern about the Iranian regime's role as a destabilizing factor in the Middle East.

Recent bipartisan polls conducted this summer in Iran show that 80 percent of Iranians favor the Iranian regime offering full international nuclear inspections and a guarantee not to develop or possess nuclear weapons, in return for outside aid.

Do you believe that there's a direct relationship between the state of freedom and democracy in Iran and the regime's quest to acquire nuclear weapons and the long-term success of our global war on terrorism? If so, would you further agree that it would behoove the United States to support a transition to democracy in Iran, much like President Bush has talked about?

Are we doing anything to support the pro-democracy labor and student movements, as well as supporting women's and minority rights in Iran? If so, what are we doing?

Thank you.

RICE: Thank you very much.

Obviously, as you suggest, the Iranian people deserve the same freedoms that people anywhere deserve. The president's been very clear that that is the non-negotiable demand of human dignity.

And we -- at the same time that we concentrate on changing the regime's behavior concerning its nuclear weapons program or terrorism, we also try to support forces that want to be for change in Iran.

We have had democracy-support funds. I know that there is some controversy about them, but I can tell you that because of the way that we handle them, we think that we are helping people who wish to carry out democracy programs through nongovernmental organizations.

And we don't expect people like that to want to be in direct relationship with the U.S. government, for all kinds of reasons. But we certainly can support nongovernmental organizations here and other places that are working with Iranians to push forward for their freedom.

We also need to very, very actively continue to speak out for the people who want a free Iran. If we can get messages through to the Iranian people that we respect their great culture, we respect them as people, we don't want the United States or the people of the United States and the people of Iran to be isolated from one another, we should be friends -- and so -- it's the policies of the regime that are preventing that from happening.

RICE: And we've even said that we don't want to deny Iran civil nuclear power. The president is a major proponent of civil nuclear power around the world, as a way to deal with energy needs, to deal with clean energy supply so that we can be good environmental stewards.

What we don't want Iran to have is a nuclear weapons technology. And so we've supported efforts that would give them civil nuclear technology, but without the proliferation risk of the fuel cycle.

And it's sometimes hard to get that message through the Iranian government filter. Because I think the Iranian government wants their people to believe that the United States is trying to deny them technology.

So those are some of the things that we are doing.

I was really pleased to welcome a group of Iranian artists here during the summer in a completely nonpolitical event but that showed Iranian -- young Iranian artists, under 40, that we value them.

The American wrestling team went to Iran. They were wildly cheered where they went.

Somehow we're going to break through that Iranian filter that is trying to convince their people that the United States of America is their enemy. We are not.

LANTOS: Before recognizing my next colleague, I want to mention to all of us, after the questioning by the gentleman from Texas, we shall take a very brief break to cast our votes and then immediately we'll resume.

The gentleman from Texas, Mr. Green?

REP. GENE GREEN, D-TEXAS: Thank you, Mr. Chairman.

And I'd like to ask unanimous consent to place my statement into the record.

LANTOS: Without objection.

GREEN: Welcome, Madam Secretary.

I have a district in Texas and it's in Houston, so energy is a big issue. But the Government Accountability Office released a report last month about some challenges we face with the capacity in Iraqi ministries: partisan influence, militia infiltration, corruption and poor security.

GREEN: The GAO recommended the State Department, in consultation with the Iraqi government, complete an overhaul of integrated strategy for U.S. capacity to development efforts and that Congress should consider conditioning future appropriations on the completion of such a strategy.

Do you agree with those recommendations? Or what steps do you think we should take so it would be the carrot and the stick both, knowing some of the problems as widely reported?

RICE: Yes.

Well, Congressman, we have a strategy to try to support the development of reliable ministries in Iraq. We have a strategy to try to help them train proper civil servants, both at the regional level and at the national level.

I would just note that this is not an easy or short-term task, because this is a country that effectively ministries didn't matter under Saddam Hussein. They were nothing but instruments of the power of the dictator.

And now you're asking them to do all of the things that I think we sometimes take for granted in governing: to construct budgets and to be able to get the money out to the field, to have civil servants who are not going to be subject to corruption.

And by the way, as difficult as circumstances in Iraq is, I think we know that we've had to fight corruption in -- around the world; it's not just in Iraq that we're fighting corruption in ministries. I would note some of the efforts the World Bank is making in that regard.

So, I'm tempted to say you'd have to come convinced that governing is not a natural act; that this is something that has to be taught and developed over time.

But we have a strategy for working with them. We have ministry assistance teams that work out of the embassy to go in, both to help them develop their own capacity and to actually help them resolve problems.

You know, sir, since you're from an energy state, that one of the big problems is to get all of the various elements to work together so that investment can be made, so that production can be carried out, for the transportation.

They've had really quite fragmented -- you know, a little piece of the problem in the Ministry of Oil and Gas, a little piece of the problem in the Ministry of Transportation. They just put together a task force to try to do better on that. We're trying multiple ways to help them be more capable.

Now, the one pledge we have insisted on from the Maliki government is that these ministries are going to be staffed by people who are not there for political favoritism; they're there for competence.

RICE: And we've had some good results and some not good results. But I assure you that, on that one, we are absolutely candid with the Maliki government that we don't expect -- and, frankly, in some of the early incarnations, it was patronage. Somebody got put in a ministry because they were a friend of somebody who was in one of the parties.

And so we are working really hard with them on the professionalization of the civil service and the ministries.

So I think we do have a strategy. We are putting a good deal -- almost all of the resources we're requesting these days are either for the increase of local or national capability. It's not, now, the big reconstruction projects that you were accustomed to when we did the initial help.

But that's the kind of thing that we're trying to do with our money. It's, frankly, hard, but I think we have a strategy to do it.

GREEN: OK. Do you think we ought to condition future appropriations for some type of strategy -- to success, you know, in smaller steps, so we can see that?

RICE: Well, I think that I would -- obviously, I think, conditioning appropriations doesn't give us the kind of flexibility we need.

I will tell you that I tell the Iraqis all the time that one of the ways that I can continue to request this kind of support from Congress is, first of all, that they live up to the obligations they've made to us, but also that they spend their own money.

The Iraqis are in an unusual position. They do have resources. They don't have enough resources. I still think it is enormously important that we spend resources in that country. But it ought to be partnering with them, so that, for instance, the work that we're doing in Anbar, they have made the more than $2 billion commitment to the Anbaris for reconstruction assistance and housing and the like.

I feel much more -- much sounder, coming to you to say, "All right, then, U.S. resources can be X amount," if the Iraqis are putting that money in.

GREEN: Thank you, Mr. Chairman.

LANTOS: Thank you very much.

The committee stands in recess.

(RECESS)

LANTOS: The committee will resume with Mr. Wu.

REP. DAVID WU, D-ORE.: Thank you, Mr. Chairman.

Madam Secretary, there must be some days that being provost of Stanford looks good in the rearview mirror. Thank you very much for your public service to our nation.

In September of 2002, I was invited to a White House briefing on Iraq. And you were one of our briefers, in your capacity as national security adviser. Mr. Tenet was to have been the other briefer. He was unavailable. He was -- his deputy stood in his stead.

I will not get into the substance of the information that we discussed, but I think the policy views which were discussed there are fair game, and we should -- in fact, very important and we should discuss them.

You brief a lot of members of Congress. There's no reason why you would remember this particular one. We exchanged some pleasantries about Tyrone Willingham's wonderful season at Notre Dame. And we also discussed your dissertation, I believe, on the Czech army and the Red Army, just a little bit.

And then we got into a serious discussion about the data and proper interpretation. And let me just say that in my view, the CIA briefer presented data and then laid out best-case scenario, worst- case scenario, medium scenario.

And in that briefing, you consistently argued for the worst-case scenario interpretation of the data. And one of your principal arguments was that the American intelligence community had been late, or insufficiently pessimistic, with respect to Russia back after World War II; that there was a prediction about when they would have the atomic bomb and they had the bomb sooner; there was a prediction about when they would have the hydrogen bomb, they had the hydrogen bomb sooner.

And that was one of your principal arguments about why we should have a first-strike doctrine, if you will, vis-a-vis Iraq, because of their potential weapons of mass destruction.

We went on to other things, and then toward the end of the meeting, as we were breaking up, I circled back. And in a colloquy, my comment to you was that your rationale for a first-strike doctrine against Iraq would have justified an American first strike in 1946 against Russia.

And -- I want to be very careful in this -- but I believe your answer, after several exchanges was, "In view of the subsequent subjugation of Central and Eastern Europe, perhaps that's something we should have done."

WU: I have three questions.

Do you continue to believe that -- we won the Cold War and we did not get into a hot war. Do you continue to believe that perhaps a hot war in 1946 might have been the right thing to do with respect to Russia?

Secondly, in terms of our current situation, given that the war in Iraq is now the second-longest war in American history and the second-most expensive in American history, given what you knew in 2002, do you continue to believe that a first strike in Iraq was the right thing to do?

And third, and most importantly, for this committee's consideration and for this Congress' consideration, what other nations or organizations are out there that you and the administration you represent might consider within the circle of potential first strike so that we and others can consider alternatives to hot wars, can consider alternatives to war, and can consider a range of options other than the first-strike option that you were laying out at the time?

RICE: Well, thank you...

LANTOS: The secretary will have 40 seconds to answer...

RICE: All right.

LANTOS: ... and the rest will be in writing.

RICE: All right, I'll do it very quickly.

First of all, I probably said, although I don't remember specifically, I'm an historian, and I do believe that there were those who said that at the time that given subsequent events in Russia we should have considered extension of the war. I think it is well known that there were people who believed that. I don't remember expressing that as my personal view.

Secondly, as to Iraq, let's remember that -- and I guess I'm just -- the concept of first strike here I think is perhaps a little out of place in Iraq, given that we were in a state at that time with Iraq of a suspension of hostilities, but not an end to the war.

RICE: We had been at war with Iraq in 1991. They were continuing to shoot at our aircraft in no-fly zones. We had in fact had to attack their facilities in 1998 because they expelled inspectors. And so we were in a state of hostilities with Iraq.

To the final -- to the question of whether or not, after 17 Security Council resolutions and the continued behavior of Saddam Hussein, it was right to consider a policy to finally deal with him, I believe that that was the right policy.

As to other states, obviously, I think speculation about what we might do under what circumstances isn't really appropriate.

I do think that the president has made very clear that he doesn't take any of his options off the table whenever American security interests are threatened.

But obviously, as we did with Iraq, where 12 years of diplomacy was pursued, I think we always want to try to have a diplomatic course. We are doing that now in a number of circumstances. We've talked a lot about Iran. We obviously, in North Korea, are pursuing a diplomatic path with our five-party colleagues in the six-party talks. We're making some progress, but, frankly, on North Korea, we are also using what I would call the teeth of diplomacy, not just the carrots of diplomacy.

LANTOS: The gentleman from Colorado, Mr. Tancredo?

REP. TOM TANCREDO, R-COLO.: Thank you, Mr. Chairman.

Along those lines, Madam Secretary, the teeth in the policy with regard to North Korea -- I would really like to know specifically what those teeth might be, and especially in light of the fact that the most -- let's see, on September the 6th, when the Israelis reportedly conducted an air strike in Syria to take out a facility that had been -- that was developing, and it was developing with the aid of the North Koreans. The facility was reportedly one that was being prepared for the purpose of using nuclear weapons, or there was some nuclear weapon activity going on there.

We don't know, of course, the specifics.

In light of that, do you not think that it was premature to release the $25 million to the North Koreans, especially when we have such a history with them, where they can agree to a variety of things, only, of course, to get what they want from the West and from whomever will help them with both military and domestic aid, and then back off or back away and do, in this case, what they appear to be doing: proliferating nuclear weaponry?

TANCREDO: What do you think that we should do as a result of that? Do you think it was premature to release the $25 million?

RICE: Well, I really can't comment about the press reports concerning action that might have been taken by the Israelis. I can't comment on that.

I can say that the president has made very clear that North Korean or Syrian or anybody else's proliferation is of deep concern to the United States and that we've had policies to try and prevent that proliferation, including the Proliferation Security Initiative, the taking down of the A.Q. Khan network, et cetera.

As to the teeth that we've used with North Korea, of course we have a Security Council resolution -- Chapter VII, China, Russia in agreement. That is probably the toughest resolution that's ever been taken against any state, given -- after the nuclear tests that North Korea conducted.

Shortly after that, we were able to re-enter the six-party talks. But the six-party framework agreement that was agreed on February 13th is one in which it is very clear that the United States only delivers on certain obligations when the North Koreans have delivered on theirs.

And the phase -- the first phase was for the shut-down of the Yongbyon nuclear reactor verifiably. That took place, which is why the release of a small amount of energy supply made sense.

Now, for the North Koreans to receive any further benefits, they have to carry through with the next-phase obligations, which include the disabling of their nuclear reactor and other nuclear programs associated with it...

(CROSSTALK)

RICE: ... and to have a full accounting of their nuclear programs and we include proliferation activities, which we take as seriously as indigenous activity.

TANCREDO: So, if in fact, it turns out to be the case that they did provide weaponry or some form of nuclear materials to Syria, then that would put them in violation of the agreement.

RICE: The agreement is that they will fully disclose and that they will then -- we will be able to act on anything that they disclose.

I am, again, not going to speak to the specific issue here. But we've been very clear that the North Koreans are neither supposed to be engaged in nuclear activities at home -- in other words, we're shutting down those nuclear activities -- and we don't expect them to be engaged in proliferation activities.

We believe that the best place to handle such concerns is in the six-party talks, where we have the power not just of the United States, but of China, of South Korea.

I would note that South Korea -- you asked about teeth -- the South Koreans withheld at one point $300 million in assistance to North Korea. That gives us a certain power to get results.

But if we are going to deal with North Korean behavior, frankly, we need to shut down their program. We need to know what they did with the plutonium that they made. And we need to destroy the product of their weapons program that goes back 30 years.

RICE: So the United States is finally in a position to perhaps do something about the North Korean program. And I think we wanted to keep that capability.

TANCREDO: Mr. Chairman, would it be appropriate if I asked for unanimous consent to submit other questions in writing?

LANTOS: Yes.

TANCREDO: And I do so.

Thank you, Mr. Chairman.

LANTOS: Thank you very much.

The gentleman from Washington, Mr. Smith?

REP. ADAM SMITH, D-WASH.: Thank you, Mr. Chairman.

Madam Secretary, you have an extraordinarily difficult job, and I thank you for your service to our country.

I want to focus on Iran. I know some others have asked some questions about that, and I may have missed a couple of them.

And I completely agree with the arguments that have been made by some that economic pressure is the key on the nuclear issue. And I want to offer this committee's strongest support to put as much pressure as possible economically.

But in terms of Iran's other interests -- and the real question is, what is our diplomatic strategy for containing Iran?

And just a couple pieces of context: Iran certainly has regional interests, but they also fear us, with clear reason.

We've made it clear that we'd, at a minimum, rather have a different regime there. And here we are with substantial military presence on both of their borders.

And that makes it hard to, sort of, get them stop the violent actions that they're doing to destabilize us in Iraq. Because the more stable and secure that our troops are there and in Afghanistan, without question the greater threat that Iran will feel.

The second piece of context is there's clearly an opportunity here with the Sunni states who also fear Iran to work with them on the strategy of containment.

But given that that first challenge in particular -- you know, trying to get Iran to tone down their efforts to directly attack us in Iraq; there's considerable evidence they're doing some of the same things in Afghanistan -- what is our diplomatic strategy -- understanding there's a huge military component to this as well, but just in your area, what is our diplomatic strategy for trying to contain Iran in Lebanon, you know, with Israel, in Iraq and elsewhere?

RICE: Thank you.

Well, we're working very closely with allies in all of those cases.

In Lebanon, we worked very closely with the French. We worked very closely with the Saudis, who have a great interest in a sovereign Lebanon that can defend itself. And we work with the Gulf Cooperation Council states.

As I said, this forum of the Gulf Cooperation Council has given us a place to pursue common interests in Lebanon, in the Palestinian- Israeli conflict.

By the way, one of the goals has to be to take away troubled waters in which Iran can play. To the degree that you make it harder for Iran to see benefit or to see places in which they can make gains, it's easier to manage the Iranian challenge.

We also, as a part of the diplomatic strategy, have authorized Ryan Crocker, from time to time -- I think he's been twice now with his counterpart -- but he delivers a pretty strong message, which is that we don't have in effect hostile parties toward Iran; Iran has hostile policies toward us.

A. SMITH: Iran doesn't see it that way.

RICE: No, I understand.

A. SMITH: And there's reasons why they might not see it that way.

RICE: I understand.

But I think that they would find that if they were not threatening our forces in Iraq, if they were not arming Shia militia in the south, if they were not engaged in arming Hezbollah to try and to destabilize Lebanon, if they were not involved with the Hamas in the Gaza, that they would find a United States that was more than prepared to look at common interests.

A. SMITH: Is there any level on which that conversation -- I know there have been some preliminary conversations with Iran -- that that message has been communicated to them? Is there any possibility of that being better received than it is right now?

RICE: Well, it's a good question, Congressman.

I would hope that if Iran can suspend its nuclear enrichment capabilities -- which are dangerous because enrichment and reprocessing is not a scientific problem, it's an engineering problem. You have to learn to do it for long periods of time in order to be able to enrich material to a level where you can build a nuclear weapon.

If they will stop trying to do that, I've said we can have a discussion about everything. It doesn't just have to be about the nuclear program.

I think that is the best circumstance in which we could have those discussions.

A. SMITH: Thank you very much.

LANTOS: Before recognizing my next colleague, and to complete the record, let me state that while the administration at this moment is not in favor of a dialogue with Iran, some of us are. And the reason we are incapable of engaging in a dialogue with Iran is because the Iranian government refuses to issue a visa for purposes of a dialogue to any member of Congress.

I have been attempting for years, with the assistance of first Kofi Annan and now Ban Ki-moon, to obtain a visa. And so far, all these attempts have been unsuccessful.

So the record must show that while the administration does not now favor a dialogue with Iran, those of us who do are incapable of engaging in a dialogue with Iran because Iran refuses to have a dialogue with us.

LANTOS: The gentleman from Texas, Mr. McCaul?

REP. MICHAEL MCCAUL, R-TEXAS: I thank the chairman.

Madam Secretary, welcome. It's good to see you again. I think you're doing a fantastic job.

I fully support, also, your diplomatic surge, if you will. I think it's time we focus on that.

I wish you all the success in the upcoming regional meeting in Istanbul. I hope it's a very substantive meeting. I know sometimes these meetings are somewhat lofty. And I hope you're able to get something done in the region.

I want to focus on an issue that -- we've talked a lot about diplomacy. We've talked a lot about Iran. But I want to focus on something that hasn't been raised.

Iran is working toward nuclear capability, but there is another Muslim state that already has it, that, in my view, poses a potential threat to our interest, and that is Pakistan.

Through the A.Q. Khan network, they achieved that capability. Pakistan, after all, has given us people like Ramzi Yousef, Khalid Sheikh Mohammed. They continue to train and recruit terrorists -- Al Qaida, specifically -- in their country.

The Saudis continue to finance this operation. Former Prime Minister Bhutto was almost assassinated and many people were killed, as you know. President Musharraf is literally a bullet away from Pakistan being turned over to these extremist forces.

This is yet another challenge that I know you have on your plate. But it is a real concern of mine of that country being one bullet away, being turned over to the extremists and then they have that capability in the region.

And I just wanted to -- in light of the recent killings in Pakistan, I just wanted to -- just to get your comments on the situation there.

RICE: Well, Pakistan has its challenges. I think everybody can see that this is a country that was really at the bring of extremism, had close relations with Taliban and one of two countries in the world that actually recognized the Taliban government in Afghanistan during that period of time.

And we, effectively, had no relationship with Pakistan. And I think one of the lessons is that we effectively didn't maintain our relationship with Pakistan after the Soviet Union left Afghanistan. And we're paying -- we paid for that. We paid for it in not having the contacts, we paid for it in the rise of extremism.

We have a good partner in President Musharraf. We are encouraging him to broaden his contacts with moderates -- other moderates who can be of Pakistani bulwark against extremism. Which is why we have been supportive of his efforts with Mrs. Bhutto and hope that there will be an effort of all moderates to be prepared for fully democratic elections to take place in the parliament in December, so that Pakistan can take that next step toward a more stable democratic environment. It's obviously very difficult.

One of the problems that we have tried to help them with is on, for instance, education, through supporting their own programs to reform madrassas and to reform some of the very basics where this extremism is growing.

We've tried to help with economic development. We've tried to help with economic development in the federally administered tribal regions, while saying to them that they have to fight up there against the extremists.

So, it is a broad-scale program to try to help Pakistan. But I think we have to recognize that it was at a very, very dangerous point a few years ago. It is still really challenged.

But the point that I would take from the past is that when we did not maintain those ties, when we cut off Pakistan, we got a worse outcome. And so, our deep engagement with Pakistan at this time and with moderate forces there I think is well worth doing.

LANTOS: Gentlelady from Texas, Ms. Sheila Jackson Lee?

REP. SHEILA JACKSON-LEE, D-TEXAS: Madam Secretary, let me quickly thank you for your service and quickly, as well, acknowledge our fellow Americans who are suffering in California and offer our deepest concern.

And I raise that because the headlines today talk about $2.4 billion for the war in Afghanistan. I think it's a distinctive war, and I won't question you on that at this time.

But I think what I'd like to ask very quickly is when will our soldiers come home from Iraq, based upon legislation that I'm writing that really chronicles the success of the military?

JACKSON-LEE: That's my first question.

The second question is, whenever Vice President Cheney -- and this is my opinion -- is engaged in foreign policy, it's dangerous. His comments this week were dangerous.

And I'd like your response to how we build the civilian resistance that you mentioned in Iran, and whether or not the administration will participate in a unilateral attack on Iran.

My other question is simply this issue of the fraud, waste and abuse in the Iraqi security contracts. I would ask the State Department to consider putting a five-year penalty on denying both contractors the ability to contract with the State Department and high penalties. Because I believe it's the worst offense.

With that, let me yield to the distinguished secretary for her response.

RICE: Thank you very much, Congresswoman Jackson Lee.

And let me also -- I'm a Californian and watching with dread what is happening to our fellow Californians-- my fellow Californians.

JACKSON-LEE: Would you pardon me just to add, congratulations for Annapolis, and I'd like to know whether members of Congress could have an observer status at Annapolis. And I'd like to engage you on that issue. Thank you.

RICE: Thank you. Let's talk about that.

JACKSON-LEE: Thank you.

RICE: I would be happy to talk about that.

Let me just -- on the issue of troops in Iraq, I think the president has made it clear that General Petraeus and Ambassador Crocker believe that if we continue to make some of the progress that we have, that we're going to start to see some American forces come home. And that's something we all look forward to.

Our military is performing very brilliantly there. We are engaged with them on the diplomatic and civilian side, actually embedded with them in places where I think some of that progress is coming, like in the Sunni areas of Anbar, which were thought to be lost just a year ago, and are now one of the areas of the most progress in Iraq.

And I think what that shows us is that engaging local people in their own fight is absolutely essential to the success of getting to a more stable and ultimately democratic Iraq.

And our policies have been very much aimed at that.

JACKSON-LEE: Iran?

RICE: And on Iran, well, I -- we are pursuing a diplomatic course. The president believes in that. I sit with the vice president. He believes in...

JACKSON-LEE: I hope so.

RICE: ... pursuing this diplomatic course.

And the key is that the Iranians do have to know that the international community is going to be tough, to prevent an unpalatable decision later on about an Iran armed with a nuclear weapon.

And when we say "consequences," we do mean that we also -- while the president doesn't take any options off the table, we do have economic ways that we can go after this. And we're doing precisely that.

JACKSON-LEE: Thank you.

If you would stay the course in Pakistan for fair elections supporting former Prime Minister Bhutto and Musharraf -- we cannot abandon Pakistan. And I hope the administration will pursue that policy.

RICE: Thank you. I'm in complete agreement with you, Congresswoman.

JACKSON-LEE: Thank you.

LANTOS: Madam Secretary, I know I speak for every member of this committee in expressing our deep appreciation to you. We all stand in awe of the depth and breadth of your knowledge, and we look forward to your next appearance.

This hearing is adjourned.

RICE: Thank you very much, Chairman.

And thank you, members of the committee.

END .ETX


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