BUSH: Hello, everybody. Please be seated. Well, when President Gorbachev and I were in Malta, we agreed that we would try to build a fundamentally different U.S.-Soviet relationship, one that would move beyond containment to an era of enduring cooperation. At the time, no one knew the momentous events that would unfold around the world. And our task is, if anything, more urgent and the case for a new U.S.-Soviet relationship more compelling, because the opportunities before us are so great.

We've not shied away from discussing issues about which we disagree. There were some tough ones before us -- particularly the aspiration of the Baltic peoples, a cause which the United States fully supports. I think it's a mark of how far the U.S.-Soviet relationship has come that in all our exchanges, whether about issues on which we agreed or disagreed, the spirit of candor and openness, a desire not just to understand but to build bridges, has shown through.

President Gorbachev and I had intensive discussions on the transforming events in Europe -- events that have put before us our best chance in four decades to see Europe whole and free. I stressed that the long-held aspirations of the German people should be met without delay. On the matter of Germany's external alliances, I believe, as do {West German} Chancellor {Helmut} Kohl and the members of the alliance, that the united Germany should be a full member of NATO. President Gorbachev, frankly, does not hold that view. But we are in full agreement that the matter of alliance membership is, in accordance with the Helsinki Final Act, a matter for the Germans to decide.

Over the last six months and in Washington this week, we made great progress in our mutual effort toward building a more peaceful and stable world. We signed a very important chemical weapons accord, nuclear testing protocols and gave a political push to others, including negotiations to reduce U.S.-Soviet strategic nuclear forces and conventional military forces in Europe.

I'm also hopeful that the good discussion between President Gorbachev and the one we had about the importance of open skies will revive those negotiations. We discussed regional issues and human rights in considerable detail, made progress in the economic sphere, concluding a commercial agreement, a long-term grains agreement.

And in closing, let me say how productive I really feel the last few days have been. President Gorbachev and I have agreed to meet on a regular basis, perhaps annually. Both of us would like to think that we can get together more often with less formality. Because, you see, we're now at a stage in the U.S.-Soviet relationship and, indeed, in world history, where we should miss no opportunity to complete the extraordinary tasks before us. Mr. President, it's been a pleasure having you here, sir.

GORBACHEV (through interpreter): Ladies and gentlemen, comrades, what has happened over these days enables me to characterize this summit meeting as an event of enormous importance, both for our bilateral relations and in the context of world politics. President Bush has listed the results of the work that we've done together here which enables you to see the scope -- the scale of this work -- and I think confirms the conclusion that I have drawn.

I agree with President Bush fully, who many times emphasized that we took Malta as a point of departure. And it is Malta that added momentum to the process, which, of course, must -- given all the difficulties and disagreements, which we have and which we do not deny -- still leads us to a qualitatively new relationship with the U.S.S.R. and the U.S.A.

The atmosphere and the results of this meeting make it possible for us to speak really of a new phase of cooperation, which the president has just mentioned. I believe that this transition is both the result and a factor for further changes that affect all countries. The constructive spirit of these days, the spirit of responsibility in which we discussed all questions, have made our success possible, and that's really important because that has a stabilizing effect on the entire international situation at a time when we are addressing fundamental issues of civilization.

I would not want to now list -- give a listing -- of all that we discussed, to mention all the agreements, all the important questions and statements that we have made and that have a lot of potential for the future. But, let me still mention what is most important.

We signed the main provision for a treaty on the reduction of strategic arms. And I would like to emphasize that this is the first time that we're not just limiting, but we will be reducing the most devastating means of warfare. And I hope that we will sign the treaty itself this year. We also signed a statement about the future treaty negotiations on nuclear and space arms. We have agreed to make sure that we will complete the Vienna talks this year and sign an agreement on conventional arms at a European summit by the end of this year. Not everything depends on us, but this is our position. We want to achieve that.

We also discussed problems relating to the European process, specifically, external aspects of German unification. I cannot say that we have reached agreement, but that does not mean that our efforts were futile. Many new arguments emerged as a result of these discussions and new possible perspectives. We have clarified our positions and it is our position that we will continue discussion in order to find a mutually acceptable solution. We could not resolve this issue in Washington, with the president, the two of us. There is also the Two-Plus-Four formula and other European countries which are concerned and which want to see a mutually acceptable solution, a solution acceptable to all of us.

The position of the Soviet Union is that we have to find solutions that would fit into the overall positive trend of changes in Europe and in the world, that would strengthen and not erode security. I would like, in particular, to emphasize the importance of our dialogue at Camp David, where we talked during the day yesterday. And this is a new phase in strengthening mutual understanding and trust between us.

We really discussed all world problems. We compared our political perspectives, and we did that in an atmosphere of frankness, constructive atmosphere, an atmosphere of growing trust. We discussed specifically such urgent international issues as the situation in the Middle East, Afghanistan, southern Africa, Cambodia, Central America. That is just some of what we have discussed. I would not want to go into detail right now. I think that you will probably seek to get clarification on this, but anyway I think that the Camp David dialogue was very important.

We have agreed to make a special statement on Ethiopia to support efforts to re-establish peace there and also, with the help of the United Nations, to give humanitarian relief to the Ethiopian people.

Speaking of bilateral relations, we have some important political achievements here. Specifically, there is movement on such important areas as trade agreement, grain trade, agreement on civil aviation cooperation, maritime agreement, peaceful uses of atomic energy, science and technology, and education.

While we and the president were working and our ministers were also discussing things, there were important contact discussions with various American companies, and some important decisions were made, such as Chevron, that will be participating in the exploration of the Tengiz oil fields. That will mean an investment of about 10 billion rubles.

A group of our academicians were here with me, and they had a good discussion, which resulted in the signing of a memorandum of intent with IBM, which will participate in the program of using computers for education in the Soviet Union. I think that this economic area and other areas create a good foundation for our political dialogue and creates a kind of solid support -- solid pillar of support -- for our cooperation.

I would like to express my profound gratification at this work that we have done together with President George Bush. I appreciate very much him as a political leader who is able, in a very human way, and in a politically responsible way, to engage in dialogue and cooperation.

We spent many hours together and were able to come to know each other very well. I don't know whether anyone will be ever able to say that we know each other totally well or completely. I think that would take many, many years. But now we have a good human relationship and, I think, a good human atmosphere between us.

The president has said, and I would like to confirm this, that we have decided to have regular meetings on a working basis in a businesslike manner, and this is really what is necessary. I would like to tell you that I've invited President George Bush, the president of the United States, to visit the Soviet Union, to come for a state visit to our country.

In concluding, and that is something that is not within the framework of the official negotiations but was part of our visit, I would like to say both to the Americans and to the Soviet people that here we, the Soviet delegation, we have felt very good feelings of the American people, feelings of solidarity and a lot of interest from the Americans toward what we are doing in the Soviet Union for perestroika. I have felt that on many occasions in my short exchanges with the Americans and also in various talks. I would like to thank all Americans for that, and they certainly can expect reciprocity from the Soviet Union for that. And finally, we, the two of us, were discussing things of concern to us -- various regions, various problems affecting the lives of other countries. But that does not mean that

we were trying to decide anything for

others.

Anyway, we remembered always that what we were doing must be useful not only for our countries but for the world and, of course, specifically for that Third World. And let me, at this, wrap up my initial remarks at this press conference. The Unification of Germany

I'd like to ask both presidents about Germany. President Bush, you mentioned that you still have a disagreement about the united Germany being in NATO. In any concrete sense, did you narrow your differences on this subject? And are any alternatives being seriously considered?

BUSH: I'm not sure we narrowed them. I feel I understand President Gorbachev's position, but I know this for a fact certain: I had every opportunity to explain in considerable detail why I felt a united Germany in NATO would be stabilizing, would be important for the stability of a post-German unification Europe. So, I can't say whether we narrowed them. But the benefit of a meeting like this is, once again, you can talk in great frankness about it. I have no suspicion about his position, and I hope he has no suspicion about mine. And we've got collective decisions to take with NATO allies on matters of this nature. And -- but in the final analysis, it's a question for Germany to decide that. And maybe we're closer on that, but I would defer to President Gorbachev.

GORBACHEV: Since I have already made quite a few remarks on many occasions during these days on this subject, I will confine myself to comments which I think important in order to emphasize the thinking on this score, and in order for us to understand better what they're after. We're not insisting that it should be an option of the Soviet Union. We are not saying that this should be a version by the United States of America or anybody else's option.

What we are talking about is an option or a solution of external problems related to German unification, which would organically incorporate the European process and improvement of international politics as a whole in order for -- so that a solution of these issues would help enrich this process and make it more stable and reliable, we're opposed to any options whatever it may come from.

We, ourselves, are not going to offer one -- one that would weaken these processes or create difficulties for the unfolding processes in the European continent. We're not going to put spokes in the wheels, as it were.

So I believe the fact that the president, myself and our colleagues have devoted a great deal of time to this issue, we have thrashed out this idea very, very thoroughly. I think {it} has been very helpful and beneficial because we will continue our debates on this.Bush-Gorbachev Rapport

I have this question to address to you, Mikhail Sergeyevich. You have just mentioned President Bush as having qualities of a statesman. Could you tell us what role they played in helping you make so many accomplishments at this summit meeting and advance in the solution of many problems that seem to be intractable?

GORBACHEV: I can reiterate what I have said and I can add the following. Mr. Bush and I met each other a bit earlier, before finding ourselves in this position together. And during my contacts with him I felt -- and it was during my first visit here, in 1987 -- that this is the kind of person to do business with, to build our relations with. Then we had contacts at the Governor's Island {in New York}, which persuaded me even more of that. We have maintained correspondence between us, and perhaps Malta was exactly the point where President Bush and I could get to know each other even better and to engage in some thinking on one-on-one meetings.

I must say that everything began with discovering the fact that President Bush and myself have a desire to do business informally, which is very, very important. If we added to this the fact that each of us, while being himself and while representing their own people, should react in a responsible fashion to everything, and in context of the real role played by the Soviet Union and the United States of America, we could very well imagine the human compatibility which exists between people and which enables them to create a kind of atmosphere that makes it possible to clarify the root causes of some particular processes.

I can say that this dialogue is well underway, and as to yesterday's meetings at Camp David, they were a great accomplishment in and by themselves. This is my assessment, and I think the fact that we have established a rapport will be very important.The Occupied Territories

This is a two-pronged question for both presidents. Beyond words, what guarantees can you give the Palestinians that decisions you made on emigration will not result in the further usurpation of their lands? And why is it that President Gorbachev has shown so much human sympathy for the Palestinians while the U.S. vetoes even a U.N. look at their plight under military siege?

BUSH: The United States policy on settlement in the occupied territories is unchanged and is clear, and that is, we oppose new settlements in territories beyond the 1967 lines. It is a stated, reaffirmed policy over and over again.

Now, we do not oppose the secretary general sending an emissary to the Middle East to look at this important question. The question is compounded, however, when you see on the eve of the discussion of that, an outrageous guerrilla attack on Israel launched from another country. That is unacceptable to the United States. Having said that, we don't want to -- the position of a our country is -- we do not think that it needs U.N. troops or U.N. Security Council missions, but we do favor Mr. {U.N. Undersecretary General Marrack} Goulding, a representative of the secretary general, going there. So when the question came and we differed with the Soviet Union -- indeed, we differed with many of our other allies on this question. It is our view that the most productive way to handle that question was to have an emissary from the secretary general, not, as the other countries in the Security Council favored, a Security Council delegation go there.

Well, Mr. President, do you agree that there have been settlements, even though this has been our policy for many years?

BUSH: Yes, I agree there are settlements that go contrary to the United States's policy, and I will continue to represent the policy, reiterate the policy, and try to persuade the government of Israel that it is counterproductive to go forward with additional settlements in these territories. Our objective is to get the parties to the peace table, and our secretary of state has worked diligently with the Israelis, and I have tried to do my best to get them talking. And that's what we -- is the most, the most immediate step that is needed. And I will continue to reiterate American policy and continue to push for peace talks.

GORBACHEV: Just a moment, I'd like to respond, too. You formulated your question in precise terms: namely, what kind of guarantees can we issue so that those who want to leave, those who have chosen Israel as their place of residence, those who leave from the Soviet Union, should not be resettled on occupied territories? This is not a simple question and this is what I have to say in this connection.

The Soviet Union is now being bombarded by a lot of criticism from Arab countries. Lately, I have had meetings with President {Hafez} Assad of Syria and President {Hosni} Mubarak of Egypt. Those were very important talks with them. Nevertheless, this question -- this was the question that was also raised by them in acute terms: the question of guarantees.

Now, we are facing the following situation. Either after these meetings and exchanges with the president of the United States of America on this particular issue, our concern will be heeded in Israel and they will make certain conclusions. Or else we must give further thought to it in terms of what we can do with issuing permits for exit. And some people are raising the matter in these terms in the Soviet Union: namely, as long as there are no assurances from the Israelis that this is not going to be done by them -- to postpone issuing permits for exit, to put it off. But I hope they will heed what the two presidents strongly advise them -- that they should act in a wise fashion. Perhaps this is what I would like to express by way of reacting. Relationship With Yeltsin

My question is addressed to Comrade Gorbachev. Your relationship with President Bush: perestroika activities are well assured inside, but there is a cooling of interest. Everybody's concerned with internal matters at home. Taking advantage of this opportunity, I'd like to ask you what do you think of your relationship with {Russian Republic President Boris} Yeltsin? Are you going to offer a branch, an olive branch of peace to each other?

GORBACHEV: I don't think you have chosen the best place for clarifying our internal problems, but c'est la vie, as they say. There is real life, there are certain processes underway back home, and I thought I tried to respond to this question when I was in Canada. As soon as I stepped out of the plane, they asked me this particular question, and I said that what I was worrying about most was a kind of an impasse which emerged at the Congress {of People's Deputies} itself because there is no strong preponderance. It took really three rounds for Comrade Yeltsin to gain a majority of votes, by just a few votes, to be elected. So the situation remains.

And, I said that in recent days something has happened which calls for thinking on our part. Comrade Yeltsin, with respect to some very serious, important, political, fundamental issues, has changed his position; at least he has introduced clarity. And I said, if this is not a political game for him to hold high office, it is one thing. A certain approach can be adopted on the basis of that, and we could certainly forecast certain kind of developments in the Soviet -- in the Supreme Soviet and in Russia.

But if this is nothing but a maneuver, and he will return to what he has been doing in recent years, not only critical terms -- Americans believe this is to be constructive -- but also in destructive activities, destructive efforts. He went as far as to fertilize in the framework of perestroika our efforts with some ideas, with ideas regarding forms of life where we are making a turnaround in all spheres. So, if he is going to come back to this, then, of course, his chairmanship will certainly complicate these processes.

I should say that after that, he gave an interview, and people began to see that he is changing again. The very next day, he was interrogated at a session. He tried to explain his position. In short, I always say, life will place everything in proper perspective. Now that we have reached a phase of radical fundamental change, where everybody is supposed to show great responsibility for their country, where we are changing everything, now that we have, we are about to make a radical change about in our economy, it is all very serious. Everything will become clear pretty soon what Comrade Yeltsin is after. New Trade Agreement

President Bush, I'd like to ask you about the trade agreement that you signed yesterday, already a matter of some political controversy and criticism in this country. Secretary {of State James A.} Baker has indicated it will not go to Congress for its action until the Soviet codification of its new emigration policies. Does that mean, sir, that when that law is passed in the Soviet Union that you are prepared to go ahead as well with most favored nation trading status for the Soviet Union, or will that further step require some action, some loosening, some shift on the Baltics?

BUSH: Well, we had a chance to discuss the Baltics. And I made clear that the Baltics -- I think I said it at a U.S. press conference several weeks ago -- caused some tensions, that the linkage is between the trade agreement and the emigration legislation. And I'm not going to send that legislation up, and I've tried to be very frank, until the Soviet Union has completed action on the legislation guaranteeing the right of emigration.

What about the further step of actually granting most favored nation status?

BUSH: Well, I've given our position. And the linkage is between the emigration, and that's it.

Can we take it then, sir, that most favored nation status would then be forthcoming if this emigration law is codified?

BUSH: Well, we'll cross that bridge when we get to it, but the linkage is between the emigration and the -- I mean the trade agreement linkage is between -- the MFN is hooked into the emigration law being passed. That's it. We have other trade agreements. We have other agreements, the grain agreement, and we have a maritime agreement. And the concern over the difference in position we have on the Baltics, you might say, affects -- is one of the thorns in the side of -- an overall relationship. We've always had a difference on this. We have not recognized the incorporation of the Baltic states into the Soviet Union. That's been the historic position of the United States. But that concern, you might say, affects a wide array of issues that we have with the Soviet Union.

Frankly, I've been very pleased. First place, I've tried to be very frank with President Gorbachev, not just here, but before he came here, saying the difficulties that I faced, and Jim Baker was very frank with {Soviet Foreign Minister} Eduard Shevardnadze saying the problems we face. I think it is important in this emerging relationship that we share as directly as we can with the Soviet side the political problems we face.

We've got a Congress that has its rights. They have every right to look at what I've signed and every obligation to do that, and make their judgment as to whether it's in the best interests. I signed the trade agreement because I am convinced that it is in the best interest of the United States. I believe the same thing about the grain agreement. I believe the same thing about the maritime agreement. But I don't want to mislead the American people and say that I have lessened my concern over the Baltic States. I've tried to be frank with our, the Soviet side on this. But the linkage -- back to your question -- with MFN, with trade is on . . . emigration law being passed. And then we go forward. Strengths and Weaknesses

In connection with this meeting, there was a lot of speculation about weak and strong points. Somebody speaks from a position of strength, someone from a position of weakness. How would you define what a strong position is, a position of strength? What is the place where factoral force of strength holds? What are the components of force? What does politics -- what makes politics strong? This is a question that is addressed to both presidents.

GORBACHEV: Let me begin first in order to let President Bush have a little rest. I think this is a certain speculation on this score. Both during the preceding period and in the course of our talks, we have been acting, representing our peoples and countries, well aware of what the dialogue is all about. And I think to assume that someone, myself or President Bush, can dictate to each other, or to the Soviet Union, is absurd. This would be the greatest misconception, on the basis of which no progress could ever be made.

I think that this idea is suggested because at this point in time, the Soviet Union is deep into profound change. And since fundamental change is involved, we are walking away from one particular way of life toward different forms of life. We are changing our political system. We are introducing a new model in economy. All these are fundamental things, indeed. Debates are underway, doubts are being expressed, views are being compared, and this is very important. Because what is at stake is our destiny. Of course, when you look from outside -- well, we ourselves can feel the strain of our society. It is very much politicized. But, a look from outside without knowing all the subtleties, without knowing all the depth of sentiments, one could certainly arrive at some erroneous conclusions.

Hence, the question of, "How long will Gorbachev stay in his office?" and "How this whole perestroika will end?" and so on and so forth, even this, I think, fits into this process of profound change. And perhaps this is something we cannot do without. But, the most important thing is that everything that is happening confirms not only the fact that we're cleaning up our courtyard, we're really revamping our entire society. We are trying to adapt it to human needs on the basis of freedom and democracy. We want to make it more open toward the outside world. That is the essence. And therein, Soviet people do not differ. And I hope there are no differences on that among the journalistic corps.

Perhaps some part of society thinks otherwise, but the question is, how to do all this, to avoid losing everything that we should keep, and jettison everything that we don't need that stands in the way. I don't think we have ever tackled a task like this in the history of our country. I don't know whether anybody else has been able to resolve so many tasks within such a short period of time.

So, it is for this particular reason that we appreciate so highly the fact that the whole world understands this greatly. So, from this particular perspective, I wish to state -- and this goes to show the farsightedness of President Bush and his colleagues, to say nothing of {the} American public, which overall understands what is happening in the Soviet Union today, understands that this is something that we need above all.

Of course, it's up to us to solve all these problems, but, of course, everybody understands full well that this is something that the whole world, all the nations need. For without such changes, without a stronger, balanced, harmonized world, we will not accomplish our objectives. So today the pivotal point of world politics is perestroika in the Soviet Union. Not because we are there, but because this is an objective reality.

BUSH: May I simply add that the United States is not trying to deal from strength or weakness. I tried to say this at the welcoming ceremony for President Gorbachev. We have a unique responsibility to deal with world peace. It is -- no other countries have the same degree of responsibility that the Soviet Union and the United States have. And so we're not looking for winners or losers. We salute reforms that make our systems more compatible on the economic side, on the human rights side, the openness side.

But we're not looking for -- for trying to achieve advantage. We sat down here, one on one, and tried to hammer out agreements and get closer together on vital matters affecting other countries. And it is because of the standing of the Soviet Union and the standing of the United States in the world that we have responsibilities.

So I can tell you and all the journalists -- from the Soviet side, the European journalists -- the United States is dealing with mutual respect here. We salute the changes, of course. But we have a unique responsibility in the world, and I plan to, one of the things I'm pleased about in our agreement is that we will be meeting more often now, and we can't miss an opportunity to enhance stability and peace in the world, and I -- so that's where I'm coming from on your question. Allies or Adversaries?

Following on President Bush's comment, on a scale that had adversaries at one end and allies at the other, would you now say that each other's country was more of an ally than an adversary?

BUSH: I think you're -- I think I don't want to get into semantics. "Alliances" have a connotation to some that they might not have for another. "Adversaries" sometimes convey the concept of hostility or enmity. In my view, we've moved a long, long way from the depths of the Cold War. We've moved towards a -- I don't quite know how to quantify it for you -- but we could never have had the discussions at Camp David yesterday, or as we sat in the Oval Office a couple of days before with President Gorbachev, 20 years ago. We all know that. So there's been dramatic move. And the more this reform and openness takes place, the more compatible the relationship becomes. Neither of us tried to cover over the differences. So I know that's too general for you, but that's where I'd leave it. The Future of NATO

To President Bush, if I may, to follow up my colleague's one. Are there circumstances under which you would be prepared to recommend the total dissolution of NATO? What's the threat that still keeps it in business? How long do you think the transition period should last before the responsibilities of the four powers run out -- the four victorious powers in World War II?

BUSH: The threat -- as I look at the world, the threat is unpredictability and . . . instability. . . . We feel that a continued U.S. presence in Europe should not be seen as hostile to the Soviet interests, but indeed we hope a continued U.S. presence there will be seen as something that's stabilizing. And NATO is the existing machinery that we feel, with an expanded mission, can best provide that stability. And herein we have a difference with the Soviet Union. But it is that, rather than some kind of Cold War mentality, that drives our decision to, one, remain in Europe, and, two, to try to have a broader role for NATO under Article 2 of the NATO Treaty. There is language put in there, I'm told, by {former Canadian Prime Minister} Lester Pearson years ago that provides a broader than just military assignment for NATO. So we see this as not exclusive to an expanded role for CSCE, not contradictory to the aspirations of many Europeans for an expanded EEC, but as a way in which we can continue without hostility to anyone to provide a stabilizing presence.

GORBACHEV: I'd like to respond to this extremely important question, if I may. First, as an overall statement of the fact, it seems to me that if some kind of option is suggested, one that would replace or would be accompanied by replacing an isolation on the European continent, either of the United States or of the Soviet Union, then I would say in no uncertain terms, and I could even make a forecast, that that particular option would be doomed. It would be doomed in the sense that it would be difficult to put into effect. But what matters most, it would lead to the exacerbation rather than improvement in the situation.

For that reason, we believe that we will not be able to make any further progress in restructuring international relations, including in the main European area, without an active participation of the United States of America and the Soviet Union. These are realities. And there's also a great sense of responsibility behind those realities. This is the first point.

The second point now. Yes, indeed, we believe that the option which we think will be found eventually and which will provide a powerful momentum and which would contribute to the strengthening of the European process must necessarily include some kind of a transition period during which we could join our efforts to conclude a final document, exhausting thereby the rights we are endowed with as the victorious Four Powers under the results of the Second World War. These are the issues that were raised by history itself, and so, therefore, in the framework of international law, it must be brought to conclusion.

A concurrent unification of Germany and its presence would mean the coincidence of these two events. This would mean that this would be an independent and sovereign state. I really don't know and I wouldn't like to engage in speculation about the timeliness. But I think that we must be very, very active now so that -- so as to ensure some kind of synchronization between the internal processes which lead to the unification of Germany and the settlement of external aspects, so that they would be combined.

I can see, and I offered many options in our position. Those options are there, and it seems to me there are some points -- there are some points the American side has noticed. I am expressing my supposition. I am not saying that I heard this from the president, but I think they have something to think about, and I think we will give serious thinking to the U.S. position, too. United Germany and NATO

President Gorbachev, on the subject of NATO membership for a united Germany, you have complained in the past about western sensitivity to your security concerns. Some of your aides say privately that Germany, a united Germany, could belong to NATO and your security concerns could be satisfied both by a limited American presence in Germany, and primarily by strict limits on German troops and armaments. The real problem they say is psychological, a matter of national pride. They say that if you accept Germany in NATO, it will be a humiliating admission for the Soviet people that you've lost the Cold War. In your talks with President Bush, were you frank about this? Is this a problem for you? And President Bush, have you considered this problem yourself in your own thoughts?

GORBACHEV: First, I do not think that whatever I'm saying on this extremely important question of world politics appears to be a complaint from me or from the Soviet Union. This would be humiliating for the Soviet Union to pass its hat around, to come here to Washington, or to Bonn, or elsewhere. This is out of the question, and please bear that in mind. This is the first point.

The second point is -- you know, there is a process under way, a beneficial process, and look how far we have progressed in this process. We are entitled to raise the question of these terms. Each subsequent step must strengthen it rather than weaken it. We have a right to that.

Take, for example, our negotiations and 50 percent reductions in strategic offensive arms. If you were -- if this whole negotiating process were to be depicted to you in its entirety, you would certainly see the kind of battles we are having on each and every point. Why? Because nobody really wants his security to be diminished.

Incidentally, our own position is that we find it unacceptable that we should have greater security than the United States of America. In a situation like this, we won't be able to move forward. I would recommend to all our partners to give some thought to this position. If decisions are made of the kinds that will cause concern to the Soviet Union, this would not be beneficial to the Soviet Union. This would not be beneficial to others as well. So the question arises. A united Germany, its advent on the horizon, all this is very important and serious.

While applauding the Germans' desire to be united, we must, at the same time, think about ways of preserving the balance that has been emerging and taking shape for decades. And here is the central point: If we were to adopt only one point of view, then I would think that it would not be complete. For it gives rise to concerns, and if that is the case, then we -- if there were no other way out, but I believe that such a way out will be found, to mutual satisfaction. But if this were to be the only option -- and some would like to impose it on us and say that we reject this -- then we should go back and see where we are. What's happening to our security? What should we be doing with our armed forces, which we are both reforming and reducing? What should we do about Vienna; how should we behave there? All these are matters of strategic importance, for everything happening in Europe is really the highest level of strategy.

This is one way, one pathway which gives rise to some doubts or suspicions, one that can certainly slow down things. There is another pathway that we are offering. Let it be American or German or British. We are not claiming to have it as our own. We are claiming one thing only. We want to see an option that would strengthen everything in Europe, rather than weaken things.

As to the second part, it's a question of pride. Well, I'd say that the problem is not pride, really, if today I have to remind you once again that we lost 27 million people in the fronts, in partisan detachments, 27 million people during World War II. And 18 million people were wounded and maimed. Then I think it's not a matter of pride but of justice, supreme justice, for these sacrifices of our people enable us to raise these matters with all nations, and we have a moral right to do so, so that everything that was obtained at such tremendous cost, that so many sacrifices would not spell new perils. So this is what I wanted to say, and I think that this is what should be said.

BUSH: May I just add, Mr. President, may I just simply add, in answer to your question, the answer is no. Because our policy is not predicated on pride or on humiliation, nor on arrogance. It is predicated on what do we see, from the U.S. standpoint, is the best for the future -- best for stability and peace in Europe and elsewhere. So the considerations that you ask about have nothing to do with the formulation of U.S. policy on these important questions. I'm just going to do what I think is best for the United States and the rest of the free world and the Soviets. So, we're not dwelling on what you asked about. Soviet Policy on Pacific Basin

Mr. Gorbachev, you say that you have established new relations with the United States. Could you tell us how you are going to develop the process in the area of the Pacific Ocean, and whether you're going to convene some kind of representative conference or meeting to discuss those matters with representatives of different zones?

GORBACHEV: It seems to me that I have already expressed myself in rather great detail on this score. And it also seems to me that what I said back in Vladivostok, in Krasnoyarsk, remains today, and I reiterate that approach. This is not a thing of the past, for the processes are beginning to develop in that region, too, which is inhabited by billions of people. One way or another, things will be more complex with due regard for the real specifics over there. We must act with due regard for those specifics without copying blind the European process -- but borrowing something from it.

At this time I can say that what happened with armaments, with INF {Intermediate-Range Nuclear Forces} missiles along the border with China, and the kind of dialogue which is underway now between countries, and, finally, the fact that we have traveled a certain distance toward a settlement of the situation in Afghanistan -- all these are signs showing that there is a positive process emerging over there.

Of course, I think this road will be longer and more thorny. But still, it is especially necessary over there because those peoples need an opportunity to reallocate their resources to overcome a lot of social problems that have been accumulated. This is number one.

And number two, I'd like to say that following the intensive contacts we have had and the dialogue that we're developing with India and now with China and other countries, such as Indonesia, I am planning to go on a visit to Japan so as to open that area for discussion. So we're going to intensify our efforts in that direction. I wish to say right away that here, too, we must cooperate with the United States of America. I said this before in my statements and now, too, I wish to reiterate it once again in the presence of the president of the United States of America. Lithuanian Independence

This question is directed at President Bush, but President Gorbachev, feel free to join in, of course. Mr. President, about six weeks ago, you suggested that your patience was nearing an end in regards to the Lithuanian situation. I was wondering if that's still the case. If not, what has changed? And specifically, have you received any assurances that the embargo will be lifted?

BUSH: No, there have been no such assurances. I'm not sure anything has changed. I don't recall placing it that "my patience is nearing an end." But I have tried to make clear to everybody that we have not recognized the incorporation of these Baltic states into the Soviet Union, and, therefore, we have a difference with the Soviet Union. They consider this an internal matter, and we say that, having not recognized the inclusion, why we have a different problem.

But we had some good discussions of this. I have been encouraged to see discussions going on over there between various leaders, and let's hope the matter can be resolved because I haven't lessened my view as to peoples' aspirations for self-determination. And I feel strongly about that. That's a hallmark of American belief and policy. And I haven't changed one bit on that. But I would turn it over to President Gorbachev, who has a different view on it.

GORBACHEV: I really don't even know what I can tell you now, because two days ago in a meeting with representatives of congressional leadership, I explained our position in great detail. It seems to me that our position is constructive and convincing. Our Constitution has recorded the right for each people to make a choice for sole determination up to and including secession. We did not have laws or legislation that would regulate -- we did not have a mechanism that would regulate -- the implementation of that right. Now we have it recorded in the law. So, we are reforming our federation. We are expanding the republics' sovereign rights. And we hope that a full federation is something that we are in vital need of to resolve all the problems that have been accumulated. This is our conviction. This is the way we're acting.

And shortly, in the next few days, there is to be a federation council meeting convened to consider specific steps, dates and ways of resolving this particular problem in specific, concrete terms. Perhaps this particular process will develop in a way that would imply the presence of different levels of federative ties, just like various ties or links between the republics. This will be a new process, new forms of links, of the kind that would be in consonant with the purposes of our perestroika, with the goals of reforming our federation. This is one direction.

If, nevertheless, in the framework of this process, some republic or other is going to raise this question -- and I am sure they will -- they must be addressed and dealt with in the framework of the constitutional process. We want to see this happen precisely on the basis of the Constitution. Any other different approach leads only to an impasse. And the experience that we have by now, not only with respect to Lithuania but also with respect to other republics, in terms of dealing with ethnic problems where some people are trying to resolve the problem by different methods, without due regard for the Constitution, leads to exacerbation, aggravation and confrontation. And this is not beneficial either for people, for their families, or for the economy, or for the overall atmosphere in our country.

The president of the Soviet Union, just like the president of the United States of America -- and I happen to know the American Constitution -- have as one of their main responsibilities to defend and protect the constitutional system. I swore an oath of allegiance to the Constitution, and for that reason we are prepared and willing to address any issue, including those that have been raised by the Supreme Soviet of the Lithuanian SSR in the framework of the constitutional process.

This implies a referendum, incidentally. As to the referendum, those who have engineered this kind of solution, if I may say so, regarding the statehood of Lithuania, will also address our own option, and let the people decide. After they make a choice, I'm sure no fewer than five or seven years would be required for us to sort things out. There will be this divorce proceedings underway, for there are 800,000 known Lithuanians who live over there. Defense, missiles, navy, they're all there. Today, Lithuania's territory includes five areas that used to belong to Byelorussia. Stalin ceded Klaipeda, which the Soviet Union, on the basis of the result of World War II, received just as it did Kaliningrad and Eastern Prussia. It received Lithuanian territory. So they raised this question to return to Russia these lands.

Recently, the president of France -- I held a press conference with President {Francois} Mitterrand of France just as I'm doing now with President Bush here. And I said, "Listen, in order to make a decision how to act with respect to overseas territories such as Caledonia, France has projected a period of 10 years. How is it possible for us to resolve issues such as this overnight, when people met pending the opening of the Third Congress of People's Deputies and put the question to the vote?" Is that a responsible policy, really, I ask myself?

I really think that we are acting in accordance with a mandate from the Third Congress of People's Deputies, and we have a vast reserve of goodwill and constructive spirit. And we do our best in order to resolve on the basis of constitutional approaches this particular issue. But any other way would be unacceptable.

I keep referring to -- well, I'm not asking the president to come over to us and bring order into our house, but I keep saying that President Bush would have resolved an issue like this within 24 hours, and he would have restored the validity of his Constitution within 24 hours on any state.

But we are going to resolve it. We are going to do it ourselves. With full responsibility I wish to declare here now, for all of you to know, that we are anxious to see this issue resolved in such a way as everybody's interests would be taken into account, and within the Constitution's framework.