Following is the transcript of President Bush's news conference yesterday:

I have a few opening remarks, and then be glad to take a few questions. Well, we're now some 37 hours into Operation Desert Storm and the liberation of Kuwait, and so far so good. U.S. and coalition military forces have performed bravely, professionally and effectively.

It is important, however, to keep in mind two things. First, this effort will take some time. Saddam Hussein has devoted nearly all of Iraq's resources for a decade to building up this powerful military machine. And we can't expect to overcome it overnight, especially as we want to minimize casualties to the U.S. and coalition forces, and to minimize any harm done to innocent civilians. And second, we must be realistic. There will be losses. There will be obstacles along the way. And war is never cheap or easy.

And I say this only because I am somewhat concerned about the initial euphoria in some of the reports and reactions to the first day's developments. No one should doubt or question the ultimate success, because we will prevail. But I don't want to see us get over, overly euphoric about all of this.

Our goals have not changed. What we seek is the same as what the international community seeks, namely, Iraq's complete and unconditional withdrawal from Kuwait and then full compliance with the {United Nations} Security Council resolutions. I also want to say how outraged I am by Iraq's latest act of aggression, in this case against Israel. Once again we see that no neighbor of Iraq is safe. And I want to state here publicly how much I appreciated Israel's restraint from the outset, really from the very beginning of this crisis.

Prime Minister {Yitzhak} Shamir and his government have shown great understanding for the interests of the United States and the interests of others involved in this coalition. Close consultations with Israel are continuing; so, too, are close consultations with our coalition partners. Just a few minutes ago I spoke to Prime Minister Brian Mulroney of Canada, and in that vein I also had a long and good conversation this morning with Soviet President {Mikhail} Gorbachev in which we thoroughly reviewed the situation in the gulf, and, of course, I took the opportunity from that call to express again my concern, my deep concern, over the Baltics and the need to ensure that there is a peaceful resolution to the situation there.

Let me close here by saying how much we appreciate what our fighting men and women are doing. This country is united. Yes, there is some protest, but this country is fundamentally united. And I want that message to go out to every kid that is over there serving this country. I saw in the paper a comment by one who worried from seeing demonstrations here and there in this country on television, that that expressed the will of the country. And so to those troops over there, let me just take this opportunity to say, your country is supporting you. The Congress overwhelmingly endorsed that. Let there be no doubt in the minds of any of you. You have the full and unified support of the United States of America. So I salute them. They deserve our full support, and they are our finest.

And now I'd be glad to take a few questions.

Q. Has the United States asked Israel not to retaliate against Iraq for its attack? What commitment has the United States received in these consultations that we've had with Israel, and how long do you think Israel can stay on the sidelines if these attacks continue?

A. Well, these questions -- questions of what we're talking to Israel about right now -- I'm going to keep confidential. There's no question that Israel's Scud attack -- the attack on Israel was purely an act of terror. It had absolutely no military significance at all, and it was an attack that is symptomatic of the kind of leader that the world is now confronting in Saddam Hussein -- and again, I repeat, the man who will be defeated here. But Israel has shown great restraint, and I've said that.

I think we can all understand that they have their own problems that come from this. But I don't want to go further into it because we are right in the midst of consultations with Israel. I think they, like us, do not want to see this war widened out, and yet they are determined to protect their own population centers. And I can tell you that our defense people are in touch with our commanders to be sure that we are doing the utmost we can to suppress any of these missile sites that might wreak havoc, not just on Israel, but on other countries that are not involved in this fighting. So I'm going to leave it there. And I am confident that this matter can be resolved.

Q. Are you worried that it could change the course of the war?

A. Well, I think that we ought to guard against anything that can change the course of the war, and so I think everybody realizes what Saddam Hussein was trying to do: to change the course of the war, to weaken the coalition, and he's going to fail. And I want to say, when the Soviet Union made such a strong statement that was very reassuring, and we are in close touch with our coalition partners, and this coalition is not going to fall apart, I'm convinced of that.

Q. Two days ago, you launched a war, and war is inherently a two-way street. Why should you be surprised or outraged when there is an act of retaliation?

A. Against a country that's innocent and is not involved in it; that's what I'm saying. Israel is not a participant, Israel is not a combatant, and this man has elected to, to launch a terroristic attack against the population centers in Israel with no military -- no military design whatsoever. And that's why, and it is an outrage and the whole world knows it, and the whole world is, most of the countries in the world are, speaking out against it. There can be no, no consideration of this in anything other than condemnation.

Q. Why is it that any move, or . . . move for peace is considered an end run at the White House these days?

A. Well, you obviously . . . what was the question? End run?

Q. Yes. That is considered an end run, that people that still want to find a peaceful solution seem to be running into a brick wall.

A. Oh, excuse me. The world is united, I think, in seeing that these United Nations resolutions are fulfilled. Everybody would like to find a way to end the fighting, but it's not going to end until there is total agreement, total, total cooperation with and fulfillment of these U.N. resolutions. This man is not going to pull a victory off by, by trying to wage terrorist attacks against a country that is not a participant in all of this, and I'm talking about Israel. And so I think everyone would like to see it end, but it isn't going to end short of the total fulfillment of our objectives.

Q. You gave assurances from this platform a few weeks ago, reiterated here today, that the coalition would withstand an attempt to engage Israel and perhaps even Israel's retaliation against an attack.

Can you give us some better idea today, sir, of what the basis for your assurance is on that point?

A. Well, a lot of diplomacy has gone on behind the scenes in this regard, and I feel very confident about what I've said.

Q. If I could follow up sir, a particularly touchy situation obviously exists with regard to Jordan, whose position in the neighborhood is particularly sensitive. Sir, can you update us on any understandings that may exist, any diplomatic initiatives that may be ongoing, to assure the Jordanians or to convince them to take no action, or about what would happen if they did?

A. I don't think there are any understandings on that, I mean with Jordan at this point. And so I can't elaborate on that.

Q. There was some indication last night -- I appreciate your not wanting to tell us what's going on right now -- but last night it appeared that Israeli planes got off the ground and headed toward Iraq. Did you stop -- did you, did this government -- stop an Israeli retaliation that was underway?

A. No.

Q. Secondly, are we trying to kill Saddam Hussein? We have blown out several buildings where he could have been last night.

A. We're not targeting any individual.

Q. Do you have any message of reassurance to the people of Israel that the restraint being shown by their government doesn't place them in risk?

A. I think that they know of our determination to safeguard them following this attack or prior to this attack. And we are going to be redoubling our efforts in the darnedest search-and-destroy effort that's ever been undertaken out in that area. And I hope that that is very reassuring to the citizens of Israel.

Q. Are you trying to caution against overconfidence with your statement in, by concern that Saddam Hussein may have a lot more staying power than was originally thought, or is it based on a upcoming land warfare that's apt to be protracted?

A. No, I don't think there's any conclusion that he has a lot more staying power than anybody thought. But I, what I'm cautioning against is a mood of euphoria that existed around here yesterday because things went very, very well with, from a military standpoint, exceptionally well.

And this was received all around the world with joy. But I just would caution again that it isn't going to be that easy all the time. That we have not changed our assessment as to how difficult the task ahead is.

Q. You said the Israelis have shown restraint. Are you confident that they will show restraint?

A. Well, we are working on that, and I'm very hopeful that they will; they've been most cooperative. Secretary {of State James A.} Baker {III} talked to Prime Minister Shamir last night; I'll probably be on the phone with him in not so many minutes from now. And I could answer the question better after that. But I think they realize the complexity of this situation; we certainly do. But whatever happens, I'm convinced that this coalition will hold together.

Q. Will you be able to tell Prime Minister Shamir with any confidence that you have knocked out these missile sites?

A. Well, the problem . . . on that is we can tell him with confidence what we've done in terms of some of the missile sites, but not all, because you're dealing with mobile missiles that can be hidden. I'm getting a little off of my turf here, because I vowed to permit the Defense Department to respond to these military questions. But I think that one is rather clear, that when you can hide a mobile missile the way they've done, it's awfully hard to certify that all of them have been taken care of.

Q. Granted, you say, there are some rough days ahead, but there has also been a considerable amount of discussion as to the relatively unexpectedly low rate of response on the part of the Iraqis? You've had some briefings on this. What are your thoughts? What do you think explains this?

A. Well, I don't know, but my thoughts are that as each hour goes by, they are going to be relatively less able to respond, and I say that with no bravado; I just simply say that because that's what's happening over there. So there has been a, he may well have been holding his mobile missiles back, for example, wheeling them out there when he thinks they'll be undetected and then firing a few of these missiles into the heart of downtown Haifa to try to make some political statement. There may be some more of that ahead, maybe aimed at other countries. Who knows?

But in terms of his ability to respond militarily, I can guarantee the world that as every hour goes by, he is going to be less able to respond, less able to stand up against the entire world, the world opinion as expressed in these United Nations resolutions.

Q. If I may follow, do you have any hard intelligence information that would indicate to you that there is indeed still a live chemical weapons threat from Saddam Hussein?

A. I'd have to refer that to the, well, I would expect there is a threat. Because chemical weapons have been dispersed. He's used them on his own people. And that's something that our troops have been warned against. The people of Israel have been warned against, obviously. And others in the area have been warned against.

So, I can't say that every chemical weapon has been destroyed. But I think -- I think I said the other night in a speech -- comments from the Oval Office there, that his ability to make chemical weapons will not exist. And I can't tell you exactly where that stands, but I would refer you to the Pentagon. . . .

Q. This is the first time there's been sustained combat between American soldiers and Arab forces. And there's been an enormous amount of concern about what the reaction in the Arab world would be. Now that the war is underway, how concerned are you about that problem? Is there anything that can be done by you to minimize the damage to the links between the Arab countries and the United States?

A. You're not talking about this in relationship to the attack on Israel?

Q. More in terms of the Arab nationalists.

A. . . . I've never believed that the Arabs would oppose what's going on right now. I believe when you see the Arab League, and Egypt itself -- which I guess is the largest in population of Arab countries -- strongly supporting what we're doing, that this idea that all Arabs, the idea that he tried to sell, Saddam did, that Arabs versus America is phony, it's a phony argument.

There are Arab forces in the air probably right now, Kuwaiti or Saudi forces. There is a strong Arab element in this coalition. There are many countries in the Arab League that are opposed to Saddam Hussein and had long felt that he was bully of the neighborhood, and it's about time that his aggression come to -- come to heel. And so I don't worry about it long run. I do think when this is over we will have some very sophisticated diplomacy to, to do, but I believe at this point that many people, most people in the Arab world understand and approve of what the United Nations tried to do and is trying to do now. So it doesn't, it doesn't concern me.

Now, there are some elements that, clearly, you might say, are on the other side, and that would worry me in a sense, but it worries me for the future, not, not so much for the present. And I think that we, we want to, when all this is over, we want to be the healers, we want to do what we can to facilitate what I might optimistically call a new world order. But that new world order should, should have a conciliatory component to it. It should say to those countries that are on the other side at this juncture, and there aren't many of them: Look, you're part of this new world order; you're part of this. You can play an important part in seeing that the world can live at peace in the Middle East and elsewhere.

So there are some that oppose us; there are some of the more radical elements that will always oppose the West and the United States. But there are countries involved there that may have leaned, tilted -- to use an old diplomatic expression -- towards, towards Saddam Hussein and towards Iraq, that will clearly be in the forefront of this new world order.

I am not going to write off Jordan. We've had a long-standing relationship with King Hussein. But he's in a very difficult position there. And I have had some differences with him, but they've been respectful, but I would like to see him be more publicly understanding of what it is the United Nations is trying to do here, and the United States' role.

We're not going to suggest that Jordan, because they've taken this position, can't continue to be a tremendously important country in this new world order.

So I don't accept the premise that Saddam Hussein tried to sell the world -- that it was the Arabs against the United States. There is overwhelming evidence to show that he is wrong. And what he was trying to do, obviously, was trying to divert world attention away from the brutal aggression against Kuwait. You heard it in the {Iraqi Foreign Minister Tariq} Aziz press conference. I mean if there ever was evidence as to what I'm saying, it was the way he conducted himself in that press conference.

So . . . I think there has been understanding as to why we're doing what we are doing. And, I'd like to think, respect . . . for the coalition. Because I think they see as I do, the Arab world, that out of this there's a chance for a lasting peace.

Thank you all very much.