QUESTION: -- and for what the American view is, I guess, of those particular talks and how they'll develop.

SECRETARY RICE: Right. Well, it's most certainly not about China. It is an effort and thus far, it's been at the level of political officials; it's not been beyond that level. You have these great democracies, the -- India is -- becoming a merging multiethnic democracy with potentially great influence in the international system.

It's really concerning cooperation. It's concerning the ability to cooperate, to help others. In some ways, it grew out a little bit of the tsunami cooperation -- that the four had been the core members for that tsunami cooperation back in December of -- '05?

QUESTION: '05.

SECRETARY RICE: '05, yes, right. And so I think what we'll see is that when they get together, they'll talk about economic issues, they will talk about environmental issues, they'll talk about capacity-building issues. Of course, China is an important factor in an emerging Asia, but it should not be seen by any means as being in juxtaposition to or in contradistinction to anyone. It's really a group of democracies that have a lot in common and can get together to cooperate from time to time.

QUESTION: Would security talks be part of that?

SECRETARY RICE: Well, they're not yet, though obviously, security in the sense -- well, if security is broadened, and I suppose it should be dealing with proliferation issues, they're all active on the proliferation issues, counterterrorism, most certainly. Those are the kinds of security issues that I think you would see (inaudible) for considerable discussion

QUESTION: This all started with the (inaudible). If I can just ask in relation to India (inaudible) whether you were disappointed that the moratorium won't be lifted and that India won't be admitted.

SECRETARY RICE: No, the United States supports the moratorium (inaudible). APEC is an organization -- you know, I was saying in my remarks that Australia hosted the first in '89. That's really not very old for an organization. And I think there's a sense to let the organization gel a bit. We are discussing issues like a permanent secretariat or a professional secretariat for the organization. I think it's just begun to really broaden its agenda in a way that doesn't get beyond economic issues, but does begin to touch on the issues that affect economic developments like terrorism, a task force (cell phone rings) -- oh, that's quite all right. (Laughter.) Those are called cell phone violations. (Laughter.)

But issues like, for instance, on terrorism, the use of a financial system for illicit activity, issues like pandemics that can have huge economic effects; obviously, under Prime Minister Howard's leadership this time to take up the climate change issue. It's an organization that's beginning to broaden its scope and deepen its relationships and I think there's just a sense that this is not the time for this action and the United States supports that, but there are obviously a lot of countries that will eventually be very good contributors to the organization.

QUESTION: So would it be some several years before (inaudible)?

SECRETARY RICE: I don't know. But I don't think it's a bad thing to let an organization gel a bit before it starts to expand.

QUESTION: And if I can perhaps briefly ask you about Afghanistan?

SECRETARY RICE: Certainly.

QUESTION: The (inaudible) seem to be -- saying again today that there's not enough support. I think it's the (inaudible) other countries to that particular effort and the Taliban seems to be strongly surging. Do you think that you need more troops on the ground, more countries (inaudible)?

SECRETARY RICE: Well, let me -- well, let me talk for a minute about this Taliban resurgence. Look, there's no doubt that the Taliban are back. But I don't think that -- certainly, our own people don't believe that the Taliban is a strategic threat; in other words, it is a threat to overthrow, destabilize, take over the Afghan Government. This is a government that is growing in strength, that is -- thanks, I think, to both its own capacity and the international system's efforts beginning to extend its writ into the various regions of Afghanistan. One has to remember it's always been a highly decentralized country. It's never had a particularly strong central government. Yet through the provincial reconstruction structures, they're extending their writ. The army is growing in strength.

And so what the Taliban is able to do is to attack innocent civilians through car bombings and suicide attacks and the like. But the kind of offensive that we saw last spring has not emerged this time, and I think it partly is because they lost badly in that spring offensive last time.

Now there's a lot of work still to do, a lot of reconstruction to do, still a robust enemy to fight in various parts of the country, though, much of the country is safe. And NATO and the associated allies, like Australia, have been doing that, that fighting and I think doing it very well. But yes, more capability is needed and the NATO Commander has made clear that he needs more capability and will be seeking that capability. There has been some increase after the foreign and defense ministers met last spring, we've seen more countries making contributions. But certainly, there's more work to be done and we're looking for further support, particularly in the training of the Afghan forces; it's probably the biggest need right now.

QUESTION: Have you -- I guess (inaudible) than the economic issues and the poppy crop, sort of seem to keep growing bigger every year. And obviously they are people's livelihoods (inaudible) you know, just sort of (inaudible) alternatives and how well is that part of the, you know, effort going?

SECRETARY RICE: Right. Well, I'm going to say something and I don't want it to be interpreted as though, you know, there they go again. But I'm sort of trying to show a -- we're always accused of being too positive about things. I guess I'd rather be too positive, than too negative. But as a percentage of the economy, the illicit crop is diminishing. Now, why is that? That's because there's actually a growing licit economy for the first time in Afghanistan. That doesn't mean that poppy isn't a problem. It's a huge problem. And the Karzai Government has undertaken a number of measures to try and deal with it, including public education, including trying to put together a judicial system that can actually punish people for engaging in the poppy trade, and as you mentioned, trying to come up with alternatives for people.

Now, one of the problems is that the poppy crop is most active in Helmand Province, which is also the place that the terrorists are most active and those two are linked. It is also the case that Afghanistan lacks basic infrastructure, particularly in terms of roads. And the absence of roads makes it hard to fight terrorism and it makes it hard to supplant the poppy crop because poppy doesn't spoil. You can get it from one place to another; pomegranates spoil. And so the building of infrastructure is going to be very important to being able to do the kinds of things that people talk about when they talk about building alternative livelihoods in an alternative economy. But I do think it's worth noting that Afghanistan, which is still a terribly poor place, that GDP is beginning to grow; that trade with its neighbors is beginning to grow; and that ultimately, in that context, there will be other livelihoods for people to perform.

QUESTION: So the (inaudible) piece, how would you describe it?

SECRETARY RICE: It's tough for -- because of the reasons of the absence of infrastructure and the fact that the security environment in Helmand Province is still a problem and just years of, frankly, after 25 years of civil war, 20 years of abuse of lawlessness and the absence of a judicial system that can really handle prosecutions of people who get -- but these are all problems to be solved that people are working hard to solve.

What I object to sometimes about the way that Afghanistan is viewed is it's viewed as a snapshot of what does Afghanistan look like in -- what are we in -- September of 2007. And then all of the problems of September 2007 are described without reference to what Afghanistan looked like in September of 2001, when it was the safe haven from which the United States was attacked, when the Taliban was in power, when women and girls were routinely oppressed, beaten for the most minor violations of the most extreme forms of Sharia law, when the -- when only eight percent of the Afghans had access to healthcare, today it's 80 percent, when there was no Afghan army. There were only militias which everyone said could not be disbanded. They have been largely disbanded. So one has to have a perspective on where Afghanistan has come from in order to understand where it might be going. And to take a snapshot of where it is, I think is unfair to the sacrifices of the coalition, the sacrifices of the Afghan people and frankly, to the -- one of the most incredibly indomitable spirited people I think I've ever seen. They are really quite something in Afghan.

QUESTION: And you obviously just come from a visit to Iraq?

SECRETARY RICE: Yes.

QUESTION: I know there's another report today that was, I guess, saying that there's still a way going to training and --

SECRETARY RICE: Yes. It's interesting, though. You know, I've talked to the people who did that report. And yes, there's a way to go, but they also say that tremendous progress has been made particularly in the army and that the army is -- has made very great strides. They don't have the logistical support in -- that is the independent logistical support yet and that is being built. There are clearly still problems with the police. A lot of things that I think I'm learning as I watched the building of these young democracies, whether it's in Iraq or Afghanistan or Liberia or Haiti or Bosnia, for that matter, is that the police -- is harder. It's the hardest thing to build, hardest institution to build.

So Iraq is making progress. I think the President's policies as of January to surge American forces in order to help provide population security is clearly having an effect. The politics at the national level is moving more slowly than I think we had hoped, but it is moving and they are dealing with fundamental issues of reconciliation which are hard.

QUESTION: Right.

SECRETARY RICE: But what was impressive to me about being in Anbar, which by the way, a year ago, was written off as lost to al Qaeda, is that the local processes of local people deciding that al Qaeda's dark vision is not for them and then making common cause with our military and with our civilians first to throw the -- to throw al Qaeda out of the province, to provide security through recruiting their own young men into the police, and then to begin to provide reconstruction, is really, perhaps, the story of how Iraq is ultimately going to be won.

QUESTION: So the impetus has very much come from the locals in that (inaudible)?

SECRETARY RICE: It's really come from the locals. And it's a good lesson to all of us that with big, complex historical processes like what is going on in Iraq, where years of tyranny are being reversed in favor of represented government, we're not smart enough to know the course that these matters might take. We've put a lot of emphasis on reconciliation at the national level on oil law, a de-Baathification law, and those are important and I think they will get them.

We didn't see coming the local people literally taking back their streets from al Qaeda. And I can tell you after now having sat in the room with the local -- the local leaders, the governor, the chairman of the provincial council, and then with the sheikhs, that that conversation was about "All right, now we've taken back the streets. Where is our reconstruction assistance," and the central government having to answer to its constituents.

QUESTION: And if you can actually get the violence down and make him (inaudible).

MR. MCCORMACK: That’s about all we've got time for (inaudible).

QUESTION: Yeah, just one quick one.

SECRETARY RICE: (Laughter.)

QUESTION: I just wanted to ask -- Iran's probably too long, but maybe North Korea last.

SECRETARY RICE: Well, look, I'll quickly do both for you.

QUESTION: All right.

SECRETARY RICE: A comment on Iran -- I think Iran is the single most troublesome country in -- right now in -- certainly, in the Middle East. Its policy of supporting terrorism in places where young democracies are trying to take root like Lebanon, Iraq, even the Palestinian territories where we need to make progress for a Palestinian state and where violence is really supported by Iran to its ambitions for nuclear technologies that could lead to a nuclear weapon. And the world simply has to be resolute in resisting it. I think we've built a good coalition of states that are -- the countries that are leading the way on trying to prevent Iran from gaining those technologies. We've had two Security Council resolutions and we'll seek a third. The financial measures that we are pursuing by which Iran's illicit activities are not going to be permitted to use the international financial systems, and we're sanctioning their banks that are engaged in that kind of activity. I think it's having an effect.

But the Iranian regime -- it's a pity because there is a better course: negotiations, a civil nuclear program that doesn't have proliferation risks, integration into the international system. It's something that the Iranian people deserve because this is a great culture and a great people.

Now, you asked about North Korea. In a sense, that shows the path because we are making some progress. It is steady, but at this point there's a lot more to be done. And if North Korea denuclearizes, it's beginning to see that there are benefits that can accompany a decision to abandon a nuclear weapons program. North Korea will do far better without nuclear weapons than it ever did with them. And Iran would do far better in the international system without challenging the international system on the insistence that it not have these nuclear technologies.

QUESTION: Would you consider having your import restrictions -- (inaudible) import restrictions into Iran having a -- they had a big problem (inaudible).

SECRETARY RICE: Right. No, they did. Well, look, we'll have to consider any measure to prevent a nuclear weapon in Iran. But I think we can have an effect on the -- really more by the decisions of private financial and commercial institutions because of the reputational and investment risks of dealing with a country that's under Chapter 7. And I think at this point, that's the course we're going to pursue.

QUESTION: Okay.

SECRETARY RICE: Thank you.

QUESTION: Thank you very much.

SECRETARY RICE: Thank you.

2007/T15-2