Please be seated. I have a statement.

One hour ago, the body of a young American hero, Navy diver Robert Dean Stethem, was returned to his native soil in a coffin after being beaten and shot at point-blank range. His murder and the fate of the other American hostages still being held in Beirut underscore an inescapable fact.

The United States is tonight a nation being attacked by international terrorists who wantonly kill and who seize our innocent citizens as their prisoners. In response to this situation, I am directing that the following steps be taken:

* I have directed the secretary of transportation Elizabeth Hanford Dole , in cooperation with the secretary of state George P. Shultz , to explore immediately an expansion of our armed sky marshal program aboard international flights of U.S. air carriers for better protection of passengers.

* I have directed the secretary of state to issue an immediate travel advisory for U.S. citizens traveling through the Athens International Airport warning them of dangers. This warning shall remain in effect until the Greek government has improved the security situation there and until it has demonstrated a willingness to comply with the security provisions of the U.S./Greek Civil Aviation Agreement and the Tokyo, Montreal and Hague conventions regarding prosecution and punishment of air pirates.

* I have asked for a full explanation of the events surrounding the takeover of the aircraft in Athens.

* I have appealed to the Department of Transportation and the Federal Aviation Administration for all U.S. air carriers to review the wisdom of continuing any flights into Athens until the security situation there improves.

* And further, I have asked Secretaries Shultz and Dole to report to me on whether we should terminate the service of foreign air carriers whose governments do not honor appropriate international conventions or provide adequate security at their airports.

* I'm calling upon all allied and friendly governments to redouble their efforts to improve airport security and take other measures to prevent the hijacking of aircraft. I would also be asking them to take steps to prevent travel to places where lawlessness is rampant and innocent passengers are unprotected.

* And I am urging that no American enter any Middle Eastern country that does not publicy condemn and disassociate itself from this atrocity and call for the immediate safe release of our citizens.

Let me further make it plain to the assassins in Beirut and their accomplices, wherever they may be, that America will never make concessions to terrorists. To do so would only invite more terrorism. Nor will we ask nor pressure any other government to do so. Once we head down that path, there will be no end to it. No end to the suffering of innocent people, no end to the bloody ransom all civilized nations must pay.

This act of terrorism is a stain on Lebanon and particularly on those Lebanese in whose name it has been done. Those in Lebanon who commit these acts damage their country and their cause, and we hold them accountable.

I call upon those holding our people to release them without condition. I call upon the leaders of Lebanon, political and religious, to meet their responsibilities and to do all that is necessary to end this crime now in the name of the God they worship. And I call on other governments to speak out and use their influence as well.

This attack is an attack on all citizens of the world who seek to live free from the fear and scourge of terrorism. My thoughts and prayers are, as are those of all Americans, with the prisoners now being held in Lebanon and with their families.

Let me conclude by stating the obvious. We're in the midst of a dangerous and volatile situation. Before taking your questions, I must stress that speculation tonight over what steps we might or might not take in hypothetical circumstances can only lead terrorists to work harder.

Consequently, there are many questions to which I should not and cannot respond. I think I have in this statement covered virtually all the points that I can safely discuss, and I'm sure that you will understand the reason for that.

* Other Hostages in Mideast

Q.

The world's attention is focused tonight on the victims of TWA Flight 847. But as you know, there are seven other Americans who were kidnaped earlier and have spent three months to a year in captivity in Lebanon. Will you accept a solution to the current crisis in Beirut that leaves any Americans still in captivity, either from the airplane or those kidnaped earlier?

A. We certainly include those in every conversation we have with regard to our people there, and this has gone on in the instance of one of them for a considerable period of time and we have used every effort to see if we can locate who has them, where they are, whether they're together or separated and where they might be, because we cannot give up on them.

And I hope, I hope that they have confidence in that. And yet, as you can imagine, it is an extremely difficult, seemingly impossible task in that area with all the factions there to know where, whether they are being moved about and what we can do. But, no, we haven't given up on them. And we include them in all of our conversations about the present hijack victims.

Q. Can you tell us what happened to the policy of swift and effective retribution that you announced 4 1/2 years ago to deal with international terrorism such as that that we've seen?

A. Well, when I was speaking about that, I was talking about a situation in which a government on the other side was involved, so there was a direct source there for the evil. I would have to tell you, and I can't go farther than this, in telling you that the problem is the who is perpetrating these deeds, who their accomplices are, where they're located, because retaliation in some people's minds might just entail striking a blow in the general direction and the result would be a terrorist act in itself and the killing and victimizing of innocent people.

Now as far as I can go is to tell you that we have used our utmost capacity in intelligence-gathering to try and find these people and these places that I'm talking about. And I can only say that we have gathered a considerable body of evidence, but I'm not going beyond that.

Q. Do you think that any of the U.S. policies, past and present, have contributed to the rise of radicalism and anti-Americanism in the Middle East?

A. No, I don't believe that we have. Possibly when we had a peace-keeping force there in connection with our allies, the other countries that had forces in there, we realized that, as they began to succeed in keeping some semblance of order in that turmoil, terrorism rose up to strike at all of us that were there in an effort to make our job impossible and that's why the international force withdrew.

We seem to be a target also, I'm quite sure, because of our friendship and support of Israel and so it just seems to be that Americans, there is an anti-Americanism that is rampant there on the part of those who don't want peace with Israel and who have consistently over the years committed terrorist acts against the Israelis.

Q. They wonder why you don't lean on Israel a little bit since the U.S. says that the holding of the Shiite prisoners is against international law, that's our position. Israel has said she is willing to, so why don't you promote it?

A. A.Because the linkage that has been created makes it impossible for them and for us. There is no question but that they were going to in stages, and they'd already started releasing. But it has now been tied to where such a movement would be, in effect, giving in to the terrorists and then, as I say, who is safe? That's all terrorists have to know is that they can succeed and get what they want. It's the same as the customs in single kidnapings, crimes in our country here in which we know that, if possible, you try to resolve the situation without paying a ransom.

Q. Mr. President, many Americans are very frustrated tonight and feel powerless and feel that they want to strike back somehow at these people who have kidnaped our citizens, murdered some of our citizens. What do you say to those who feel that there is somehow a perception that America is weakened by these acts of terrorism and that we can no longer protect our citizens abroad?

A. Those people, I think, who do that are jumping to conclusions and don't realize what the situation is. But I'm as frustrated as anyone. I've pounded a few walls myself when I'm alone about this. It is frustrating. But, as I say, you have to be able to pinpoint the enemy. You can't just start shooting without having someone in your gunsights. Limits of Immediate Force

Q. Have there been things that you've learned about the limits of American power in these sorts of situations, things that you've learned since four years, five years ago, that have perhaps changed your mind about the criticism during the 1980 campaign?

A. No. Again, I have to say that when you think in terms of, for example, immediate force, you have to say, "Wait a minute. The people we're dealing with have no hesitation about murder." As a matter of fact, most of them even approve of suicide.

How do you attack without finding that, yes, you may have punished, before you're through, the guilty, but in the meantime the victims are dead? And that's the great hazard in this. How, for example, in the several times that the plane was in Algeria and subsequently then in Beirut with a dozen hijackers on board armed with submachine guns, how could you possibly attempt anything without knowing that those guns would be turned first on the victims within the plane -- the so-called hostages?

Q. You spoke of frustration in your inability to deal with this. I spoke today to the wife of one of the hostages, who had a very simple and straightforward question which I want to relay to you. She said, what would you do if your wife, or one of your children, were aboard that flight?

A. I would still have to think of the safety of all of them. Strangely enough, I just heard someone on one of your networks tonight asking the same question of former secretary of state Al Haig. It would be a horrible situation, yes. And yet it isn't any more horrible just because it would be me than it is for those people that are presently waiting for some reply. But you can't, as I say, give in to the terrorists without knowing that you're then sentencing someone else to go through the same agony and other people to also be victimized.

Q. Can you say tonight that there is something that the United States can do, some arrangement that we can possibly make? A

Now you're getting beyond that point. So far these questions you've asked have been questions that I thought were safe to answer. You're now getting into that area that I said, and I hope you understand, that I can't talk about.

Q. Is the safe return of the hostages your primary goal, and how does that fit in with the other considerations that you as president -- some of which you've talked about tonight -- are going to have to take into account?

A. That is the goal, the safe return. And yet, as I say, in a manner that does not reward the hostages [hijackers] for the crime that they have committed, because that gang would be out next week for another try. And this is the thing we must recognize -- that it is a cowardly crime in that they hold all the cards once they have these people in their power and we have to consider their safety. Yes, I could get mad enough now to think of a couple of things we could do to retaliate, but I would probably be sentencing a number of Americans to death if I did it.

Q. In 1980, in your frustration, as every American felt about that hostage crisis [in Iran], you said in April this should never have gone on six days, let alone six months. Is there, therefore, a point in time at which you believe that the national interest requires action?

A. The thing that I always felt about that one, as I say, was much different than what we have here. You had a government committing that crime. I don't know what measures were looked at as to what you could do with regard to another government. But there it was not this crime of unidentified people, no connection that you can pin on them as to someone in charge that you can go to that person. That was a different situation than what we're having now with car bombs and hijackings and this kind of crime.

Remember, for example, in the car bombings, the perpetrator of that crime is no longer with us. They're willing to go up themselves. Prospects for a Summit

Q. If I can change the subject just for a moment, you've invited Mr. [Soviet leader Mikhail] Gorbachev to meet you in Washington, and six weeks ago you were asked about the invitation and you said the ball is in his court. Have there been any developments since then? Do you think there will be a summit this year?

A. I have to be optimistic and think there will. All I know is that I, feeling it was our turn, issued the invitation for such a meeting. And there has been evidently expressions that -- willing to have such a meeting and discussions are going on with regard to time and place. But I can't give you any report on where those negotiations have taken us.

Q. If I can come back to the situation in Lebanon, you made a distinction between unidentified terrorists and the state terrorism. Is not Mr. Shiite leader and Lebanese Justice Minister Nabih Berri representing the government of Lebanon, and does that not create a situation where he is, in fact, identifiable?

A. Well, now, he's in a position of supposedly having taken the hostages away from the hijackers. But to say that because he holds a so-called cabinet post in the government of Lebanon, that this now involves the government of Lebanon, I think, is to give the government of Lebanon a cohesiveness it doesn't have. He is acting as an individual and is acting less as a minister in the cabinet and acting in his own position as the head of the Amal, one of the factions of the Shiite Moslems there. He has his own militia. He has his own army. So, it isn't that simple that you can say, this is the government of Lebanon.

Q. In that case, is Mr. Berri part of the problem or part of the solution? And is he the only solution to this problem?

A. Now you are getting into the area of questions that I can't answer on this. But he could be the solution that quickly [snaps his fingers].

Q. So far this evening, you have given us a rather somber assessment of what's going on in Lebanon. What is your own estimate as to how long this crisis may go on? Do you expect a fairly short resolution or could this drag on for a while?

A. You're asking one of those questions I can't answer. I just, I can't discuss that or any of the things that we are doing.

Q. Could I follow up in terms of your own assessment of American power in the world and how it relates to this episode? In 1984, when you were running for reelection, you told American voters that America is standing tall again, comparing it with supposed weakness under your predecessor. Is America standing tall today?

A. Yes, I think we are. I think terrorism is, I don't know, I can't recall in my lifetime any time when it has been used to such an extent as it is now. And the very fact that the terrorists are not all from one source. If they could be linked to a country, if you knew the source and what they were trying to do -- but we've got a variety of terrorist organizations, and sometimes recently we've found that here and there a couple of them claim that they have cooperated in some terrorist act. But again, the situation is one that can't be talked about because the first priority is the safety of those victims.

Q. In the speech in which you talked about swift and effective retribution in 1981, you also said, "Let it be known that there are limits to our patience." Are there limits to your patience on this issue? Or are you willing to wait it out as long as it takes?

A. I have to wait it out as long as those people are there and threatened and alive and we have a possiblity of bringing them home -- I'm going to say a "probability" of bringing them home.

Q. I wonder if you think that perhaps that's how former president Jimmy Carter felt about the Iranian hostages and what the difference is here that he said many times that he wanted to bring them home safe and that was his goal. How is this different?

A. Well, as I say, I did not openly criticize him. And, as a matter of fact, in the closing days of the campaign when it appeared that we were getting them home, I didn't say any word or make any comment on the situation because I didn't want to endanger what was going on.

I just felt, as I say, that there were two governments, and it just seems to me that you have a great many more opportunities then to find vulnerabilities in another government, and things that you can say in return that you can offer as a trade.

Q. Do you think that the Israelis are holding the 700 to 800 Shiite prisoners in violation of international law, as the State Department said on April 4? And if so, do you think, have you gotten any assurances from them that they would release those prisoners if we got the hostages back?

A. We have not dealt with them on that. As I say, we have not interfered in any way with them in what they're doing. In regard to international law, it's my understanding that the taking them across a border from their own country and into another country is a violation of the Geneva accords.

Q. Has the International Red Cross been dealing with them for us on that issue? Dealing with the Israelis on that issue?

A. Again, we're getting into areas that I can't talk about. I covered it, all I can mainly talk about.

Q.

More than 500 American flyers were rescued by Gen. [Draza] Mihajlovic of Yugoslavia in 1944, and they want to erect a memorial on federal property which the Senate approved twice and Mr. [former representative Edward] Derwinski [R-Ill.] supported repeatedly while President [Harry S] Truman gave the general the Legion of Merit. Why, since it is very important to rescue Americans, are you allowing your State Department to stop this in its tracks?

A. I will have to tell you that this is the first that I've heard about it, so you've given me a question to ask when I leave here tonight, to find out about that.

Q. Since Nabih Berri has said, has joined the terrorists in their call for Israel to release the Shiite prisoners, is he not now part of their effort?

A. Again, this is too delicate for me to comment or give an answer to that question. I'm not going to do it.

Q. He [Berri] said today that, if the United States does not ask Israel to release the Shiite prisoners, that he would give the hostages back to the terrorists. In that case, would you hold him responsible?

A. Yes, I would. South Africa Policy

Q. Yesterday, South Africans saw a new government in Namibia, which the United Nations condemned. Last week, South Africa raided neighboring Botswana, killing 12 people. And last month, a South African commando unit tried to blow up oil tanks partly owned by U.S. companies. In view of these events, do you plan any changes or alterations, modifications in your policy of constructive engagement with South Africa?

A. Well, as you know, we brought our ambassador home for consultations. All I can tell you is we think we have been successful in getting some concessions there and some changes in their policy of apartheid, which we all find repugnant, and we're going to continue doing that. The raid across the border was perhaps the kind of incident that I've just been talking about here in our own situation.

There is no question about the violence of the ANC [African National Congress] and their strike, their attacks on people and their murdering and so forth. But again, was the strike back at the people that were guilty, or was it just a retaliation in the general direction? So we don't know about that, but we are very concerned about it.

Q. Then you don't consider these recent events to be a setback in your policy with South Africa?

A. Well, they're certainly not something that we heartily approve of. But whether they're something to make us break off relations with another government, I don't think that, either.

Q. Would you be willing to accept 40 MX missiles instead of 50, if Congress gave you an extra $200 million for the Midgetman [missile] and accelerated development of that program?

A. Well, you've asked one here that I think we'd have to look at that very seriously to see whether there was an advantage in that or not or whether even their giving that money could accelerate the Midgetman program. I don't know that it could. But I do know that the debates that are going on about the MX, I think, are a lot of wasted rhetoric, and we ought to get on with it. It is most vital to us that we modernize our land-based missiles, and that is the missile that is on hand and available now. It has a hard target capacity and an accuracy that is virtually unequaled anywhere. We need it.

Q. You've said repeatedly during your administration, as you've said tonight, that you can't give in to terrorism. But each time that we've had one of these incidents -- such as the case of the Marines who died in Beirut -- there's been a lot of talk from the administration but no action. Is there any danger that terrorists in the Middle East might get the feeling that the U.S. bark is worse than its bite and that they can do these things with impunity, knowing we won't retaliate?

A. Well, I hope not. But, again, let me just point out to you, in that incident a man who committed the crime -- or men, I don't know how many were in the truck -- they're gone. This is one of the horrifying things of some of these terrorist acts is you have a group of people who think their ticket to heaven is to do this and to take some others with them. So when it was over, the truck and the people in it -- or person in it -- were gone. And the same was true of the embassy bombing.

Now, how do you establish a connection between them and someone else? Was there someone else that sent them on their way? You have no way of knowing. So again, as I say, you're left with only one form of retaliation and that is if you just aim in the general direction and kill some people, well, then you're a terrorist, too.

Q. Do you have a new [MX] basing plan, because that was the condition, wasn't it, on the Senate cap? That they could go above 50 if you had a new basing plan and Mr. [Defense Secretary Caspar A.] Weinberger indicated that you do want more MXs?

A. One thing right now we do know from the research that we've done and the experimenting that we've done, we can vastly harden a silo to the extent that we think that it would take a very direct hit to do away with or eliminate those missiles. Tax Overhaul Proposal

Q. You've been spending a lot of time monitoring the situation in Beirut on the hijacking, and I was wondering how much time you devoted to domestic issues during the day, particularly the tax effort on the Hill.

A. That's one thing I have to tell you. You can't just aim yourself at this tragedy, great as it is. I don't think that I neglect it in any way because there is a limit to what you can do or what can be reported and the times in between. Yes, we're very serious about both the budget -- and tomorrow morning I will be making another appearance in connection with the tax reform.

Q. Efforts under way to enact a tax increase -- are they in tandem with the tax reform or separately? Are you in touch with that?

A. A tax increase? I don't have to spend any time at all on that. No, because there just ain't going to be none.

Q. Do you think that this tragic accident might in any way influence the ongoing process of solving the Middle East problem through Palestinian-Jordan-Israeli talks?

A. I don't really see that they have been. They're certainly not a setback to us with regard to the peace talks, and I know that King Hussein when he was here made it plain that he is not retreating from the effort that he is making. And I have to commend him for his courage and his willingness to do what he is doing in trying to bring about direct negotiations between the Arab states and Israel and the Palestinians to try and get a peace, a lasting peace in the Middle East. So we are doing everything we can also to be of help to him.

Q. So far this year, you've seen your defense budget request slashed on the Hill. You've had your very difficult battles on the Hill with the MX and with a number of other issues. You had to endure the Bitburg cemetery controversy, and now this hostage crisis. Do you feel that the Teflon that has covered your presidency has slipped off? Is your luck running out?

A. I never thought that there was any Teflon on me anyplace. But we seem to have reversed the course with regard to the contras. And, with regard to Bitburg, in spite of the efforts of some of you, from the very first, I felt it was the morally right thing to do, and I'm pleased that I did and it was a worthwhile experience over there.

And I began to get my reward when I spoke to 10,000 young teen-age Germans and, at the end of that, heard 10,000 young Germans sing our national anthem -- in our language. I think it was a recognition. Those that indicated that I might be suggesting that we forget the Holocaust, no, in no way. Nor are the Germans trying to forget the Holocaust.

I was amazed, and this 40 years now of friendship that has followed all of that hatred and the evil of the Holocaust and of Naziism, to learn that the Germans -- not only have they preserved the horrible camps and maintained museums with the photos all blown up of the worst, most despicable things that happened there, but they bring their schoolchildren every year and show them and say, "This must never happen again."

I have never suggested in going there that this was a forgive-and-forget thing. It's up to someone else to forgive, not us, if there is any forgiveness. And certainly we must never forget. And so I didn't think, if there is any Teflon, I didn't think that I lost any on doing that.

But now, as I say, we've reversed the thing on the contra aid. We only have a [Senate-House] conference to go and, either way it turns out I think is going to be a plus. And it will be more than we originally asked for.

The MX battle is on. And now, of course, in the budgeting battle, I do believe that one version of a budget that has been proposed is no way to eliminate the deficit. I think the Senate plan with its $56 billion savings in the first year is the answer to eliminating the deficit and eventually going to work on the national debt. So, I don't think I've suffered too much.