SECRETARY RICE: Well, these are longstanding relationships with our Gulf allies. They go back decades, many precedents. And we just want to make certain that our friends and allies are capable and prepared to defend themselves. And as the threats change, as the offensive capabilities in the region against them change, it's important that they acquire defensive capabilities that can deal with that. The message is to everyone: that the United States will defend its interests in the Gulf region, will defend the interests of its friends and allies, and that we are a reliable partner for our friends and allies in this challenging environment.

QUESTION: Some of the reactions from Iran have been pretty hostile to this move.

SECRETARY RICE: Well, the Iranians should know that these are longstanding relationships. And unless they have something in mind, they shouldn't be threatened by them, because these are efforts to make certain that the Gulf remains stable and that America's commitment to the Gulf is understood.

QUESTION: Now, you have said this is not a quid pro quo arrangement. But some members of the U.S. Congress have asked: What are we getting for this? What are we getting right now? How are these Gulf allies handling our security concerns and meeting our security concerns right now?

SECRETARY RICE: Well, let's remember that the United States has security interests in this region; vital security interests in this region. We would not have been so active in this region for so many decades were those interests not vital to us. And so when you talk about helping our allies to defend themselves, you are also talking about defending American interests. And that's why we shouldn't think this is a quid pro quo.

But, of course, we are working with our allies on a variety of security issues. We are working with them on Iraq. We are working with them on Lebanon. We are working with them to try and help stabilize these vulnerable, young democratic states. And I found, during my meetings with the Gulf Cooperation Council, plus Egypt and Jordan, that there was an understanding of the challenges in the region and a real desire to cooperatively take them on.

QUESTION: They've said a lot of the right things about helping with Iraq. Are you seeing enough action in a timely fashion?

SECRETARY RICE: Well, we do have a framework from the Sharm el-Sheikh neighbors conference that really does set out what all of Iraq's neighbors and the international community will need to do. There is also an International Compact with Iraq that sets out certain responsibilities of Iraqis to be met by obligations of the international community. And people are executing those.

I was particularly pleased that the Saudis are going to send a diplomatic mission, try and look at establishing an embassy in Iraq. That is a real sign, I think, of political support and of political maturity of that relationship. And I think we're seeing that all of these states are doing what they can to encourage a unified Iraq -- an Iraq in which all Iraqis can feel comfortable and prosper -- and also to begin to work really hard on some of the border issues that are permitting security breaches by terrorists who are coming into Iraq and who are destabilizing the region and, by the way, killing innocent Iraqis and threatening coalition forces.

QUESTION: Now we've heard from a couple of people who have been in on some of these meetings that one of the complaints from the Gulf allies are that the United States, the current Administration, has come with many peace programs before in the past few years. They ask: Are we really going to follow through with it this time? What are you doing to show them we're serious?

SECRETARY RICE: Well, let's remember that the Israeli-Palestinian conflict hasn't been solved in decades. It's not this Administration that has not yet solved this problem. It goes back a long way, and it's because it's a complicated problem with a history of its own and complexities of its own.

But I have been encouraged by the tone here, the tone here in Israel, the tone in the region of a desire now to really take advantage of this opportunity of, I think, a good Palestinian Government, a president in the Palestinian Authority who is devoted to the fundamental principles for peace. I think that the President's remarks on July 16th, which laid out a kind of way ahead for the Palestinian-Israeli -- to try and make progress on the Palestinian-Israeli conflict, has given people a kind of lodestar to work toward.

And so I think we've got a chance here. It's going to be difficult. I don't think we ought to overstate the chances because it's a very complex problem. But I'm committed, the President's committed, and I've found the states in the region committed to really trying to make progress.

QUESTION: One of your aides said one of your main goals here is to make sure that the Palestinian-Israeli relationship is not a dysfunctional one; that they're talking to each other. What kind of gestures have you seen, this trip, or do you need to see, to know that's working?

SECRETARY RICE: Well, I'm very pleased that Prime Minister Olmert and President Abbas are scheduling meetings. They're meeting. They're clearly having discussions that are substantive. I remember being here just a few months ago and it was a very difficult situation not too long after the formation of the Palestinian unity government. And indeed, the communication wasn't very good and I think that communication now has been built back by the decisive steps that Abu Mazen has taken.

But I also believe that they will -- those discussions will deepen and we will be able, then, to build on that bilateral channel to support what the Palestinians and the Israelis want to do to prepare the ground for negotiations to move to the two-state solution.

QUESTION: Now, you're working towards a two-state solution. How can you do that when the Palestinian state right now is split to factions, part ruled by Hamas in Gaza and part ruled by Abu Mazen in the West Bank?

SECRETARY RICE: Well, the Palestinian people are represented by a single president; that is President Abbas. They are now represented by a government headed by Salam Fayyad. And President Abbas is, of course, also the Chairman of the PLO, the Palestinian Liberation Organization, which is the recognized-by-everyone authority for negotiations on behalf of the Palestinian people. I hope that when there is the prospect of statehood, a real prospect of statehood, that that will be a unifying element for the Palestinian people as a whole.

I believe that the Palestinian people very much want to live in peace and democracy and freedom side by side with Israel. It can't be that the Palestinian people want to continue in the difficult circumstances as they are and that the Israelis want to continue with the lack of security. I've said many times, the Palestinian people have waited long enough for their state, and the Israeli people have waited long enough for the security that will come from having a viable and democratic neighbor. And I think you have that base in the populations of both peoples, the Palestinians and the Israelis, and that can be a unifying cry for both.

QUESTION: The Palestinian people did vote for Hamas. Is there a role for Hamas in any future Palestinian Government as far as you can picture?

SECRETARY RICE: Well, there is a role for any Palestinians who are devoted to the fundamental principles for peace. You can't have statehood unless you recognize the right of the other party to exist. You can't have statehood that is born of terror and violence, and so the renunciation of violence is very key. And there have been multiple agreements signed by Palestinian leaders over the last decade and a half. And those agreements should be recognized.

But I think that you're seeing now a new kind of hope and a new potential opportunity. As I was going through the region, we talked a lot about the international meeting that we hope to hold some time this fall. I found people interested. I didn't come here to issue invitations, but I was encouraged by what I heard, and when Prince Saud, the Foreign Minister on Saudi Arabia, said that Saudi Arabia would be interested if it is a meeting that is substantive, meaningful. When I talked to Prime Minister Olmert last night he said, I share that view; this meeting ought to be substantive; it ought to be meaningful and it ought to contribute to moving us forward to a two-state solution. And that's the attitude that I found throughout the region.

QUESTION: So we could see, this fall, a Saudi Arabian official sitting down with an Israeli at a peace table brokered by the Americans.

SECRETARY RICE: Well, look, we have a lot of work to do to get to that point or to get to a conference that is indeed going to be a meaningful and substantive meeting. That's the work of the next months leading up to the conference. As I said, I did not come here with invitations. Nobody has accepted an invitation and I want to make that very clear. But people are interested. They're interested, to my mind, on the right basis, which is let's not have a photo-op; let's do something that would be meaningful in moving toward a two-state solution, and then we'll see.

But I think our responsibility, the responsibility of the United States, but also the responsibility of all of the actors here is to make as much progress over the next months as possible to really support the bilateral track between the Palestinians and the Israelis, because that's where these issues will be resolved, and to help the new Palestinian Government to deliver the daily -- a better daily life for its people so that the Palestinians can see that there's a clear choice between the kind of violence and the repression that you see in the Gaza and the hope for a democratic and prosperous Palestinian state that someone like President Abbas can bring.

QUESTION: Thank you very much.

SECRETARY RICE: Thank you.

2007/T-9