MS. KELEMAN: You've also said that it's going to become pretty clear quickly whether the Iraqis are cooperating, and I wonder at what point the US can say we think Iraq is in material breach of these violations. I mean, is there a debate going on within the administration right now, within the Bush Administration, about the threshold that Iraq has to meet?

SECRETARY POWELL: No, there isn't a debate going on. We'll wait and see what happens rather than prejudge where that threshold might be.

As you noted, Michele, I have said in the past that what we're looking for is a new spirit of cooperation from Iraq and that spirit of cooperation will manifest itself quite early, I think, by giving access to the places that the inspectors wish to go on short notice, cooperating fully with the demands of the inspectors, putting forward a declaration that is due next week that is accurate and something that we can look at as a serious effort on their part.

And if they cooperate, then the inspectors should be able to do their job. And if they don't cooperate, then the US resolution is clear. I am sure that Dr. Blix and Dr. El Baradei will report that to the Council or we may report it to the Council if it's obvious, and the resolution permits us to do that, and then the Council will have to decide what it wishes to do while we decide what we might want to do.

MS. KELEMAN: But is the US already sort of looking at the pattern? For instance, there have been Iraqi air defenses shooting at US and British planes in the no-fly zones.

SECRETARY POWELL: They've been shooting at US and British planes for, oh, eight or nine years now so this is a pattern of behavior that is inconsistent with what we believe their obligations are, and we are responding to them every time they do fire at our aircraft. But we don't see that series of incidents, firing at our aircraft and us firing back, as something that triggers the demands and the consequences of the new resolution. But we think the Security Council should take note of the fact that since we've passed this resolution Iraq continues to operate in this way.

MS. KELEMAN: There's one other issue at the Security Council now. UN diplomats have been complaining that the US, and pointing particularly to the Defense Department more than to your Department, but saying that they're holding up this agreement to extend the Oil-for-Food program because the US military wants more items on this list to be banned.

Why this last-minute maneuvering?

SECRETARY POWELL: Well, we have been examining the list on a continuing basis ever since it came into effect this past May and we have come across items that we know the Iraqis are buying that would add to their military capability and --

MS. KELEMAN: Such as?

SECRETARY POWELL: For example, we know they're trying to find jammers for GPS or, you know, ground precision locating system devices that are used by our troops. And this is the kind of capability we think should be added to the goods review list.

And so rather than just roll it over this past Monday, we decided to just do a short technical rollover for nine days, rather than a six-month rollover, so we can consult with our colleagues in the UN about putting some more items on this very long list. It's over 400 pages long now. And that's what we're doing and we'll see how that turns out next week.

MS. KELEMAN: You're also looking at three months versus the usual six months, and some have interpreted this to mean maybe the US is getting ready for a war in the wintertime.

SECRETARY POWELL: No. Frankly, the difference between three months and six months was a way of seeing whether or not a shorter time period would put more pressure on the process to add items to the list, but it isn't a reflection of when we think war might come or not come. We're hoping this can be solved peacefully. The President has said that repeatedly.

MS. KELEMAN: But do you think that war can be averted and do President Bush's advisors, yourself included, really agree that that's going to be the best outcome?

SECRETARY POWELL: The President has said repeatedly and publicly to us and he has said it to the international community, to the world, that he hopes Saddam Hussein will comply and get rid of these weapons of mass destruction and the capability to develop such weapons. It would be in the interest of the Iraqi people, the interest of the people of the region and the world and remove a danger to the world. And he hopes that Saddam Hussein will do this peacefully.

He sees war, President Bush sees war, as a last resort, and there is no dispute within the administration. The President has spoken clearly on this. But if war does come, you can be sure that the Armed Forces of the United States and the armed forces of other nations that I think would be with us in such a conflict will be ready to accomplish the mission of disarmament.

MS. KELEMAN: I do want to ask you about the other nations, but first, there's been so much written lately in the media, Americans have been reading about this divide within the Bush Administration. When we got the weapons inspectors back in to Iraq, when the US got this unanimous resolution at the Security Council, most commentators called this your shining moment, your moment of your diplomatic skills at work. And I wonder if this is a sign that you have the President's ear more now.

SECRETARY POWELL: I've had the President's ear since we started together in January of 2001. I've never lacked for access. I've never lacked for the ability to present diplomatic options to the President.

I think the President is fortunate in having people within his Cabinet who have strong points of view, who are strong-willed. We have all known each other for many, many years and we know how to debate without ever being disagreeable. And we think the President is served and the nation is served when strong points of view are allowed to, shall we say, coexist for a while, and then they stop coexisting because the President decides. And we are blessed to have a President who can handle strong personalities in his national security team and then make the decision which we then all execute.

MS. KELEMAN: Where is the balance now? I mean, do we have put to -- does the US have to put regime change off the table for the time being to allow the inspectors to --

SECRETARY POWELL: Well, remember why regime change came into the equation. And that was back in 1998 and President Clinton announced it as US policy and the Congress passed a law making it US policy because Iraq had made it impossible for the inspectors to do their work and they left, and the only way it seemed we could get those weapons of mass destruction out was to change the regime. But if the inspectors can do it with a cooperative Iraqi regime, if they are cooperating this time, in effect, that would be something of a changed regime. The objective is to get the weapons of mass destruction out, one way or the other.

MS. KELEMAN: But you disagree with Secretary Rumsfeld and Vice President Cheney on this issue?

SECRETARY POWELL: No, the only one I agree with is the President. He has told us what our policy is and we all agree with the President and we are supporting the President. Do we have debates and discussions and different points of view and perspective? Yes, of course. We are people who do have opinions and those opinions come together to try to give the President the best information to make decisions for the American people. And this is the stuff of cocktail talk all over Washington and certain other quarters, but occasionally it gives us a good giggle within the team.

MS. KELEMAN: I imagine so. Well, I think it raises the question for many Americans, though, when they look at this and they wonder where the balance is, are you in this administration for the long haul?

SECRETARY POWELL: I have been Secretary of State going on two years, and if -- that certainly is a long haul. It seems like it already. It'll be two years in January. And I have no idea what the basis of your question is or what you're trying to feel me out on because I serve at the pleasure of the President and we all serve at the pleasure of the President, and I'm pleased to have this opportunity to serve the American people again, but especially this President.

MS. KELEMAN: I want to ask you about a side issue to Iraq, and that is the Bush Administration is now considering aid to Israel, an extra $4 billion military assistance, $10 billion in loan guarantees. Some reports have painted this as part of the efforts to prepare for war in Iraq. There's not only that aid package, but also an aid package for Turkey.

Where are we on this?

SECRETARY POWELL: Well, Israel has real needs. Its economy has been seriously affected by the events of the last couple of years since the second Intifada began and it's costing them a great deal for the military operations they are conducting. And so they have let us know that they have these additional financial needs and we will certainly consider them, as we should for a good friend like Israel, and I'm sure the Congress will also consider it when they come back in session early next year.

Turkey also has needs and we are in touch with Turkey as to what their needs might be both in the absence of a conflict, we support Turkey, and if there were to be a conflict, how might that affect Turkey. They were seriously affected in a very negative way during the Gulf War and they are sensitive to such a potential problem in the event of a new conflict, as are we. So we stay in close touch with our Turkish friends.

MS. KELEMAN: There will likely be concern in the Arab world if we do, if the US Government does give another big aid package to Israel, that we've often heard in the past the US is trying to underwrite settlement activity in the West Bank, for instance. How do you answer questions like that to the Arab world?

SECRETARY POWELL: No, none of this aid will be underwriting settlement activity. We believe that settlement activity is something that should be stopped and it is part of the comprehensive solution to the problems in the Middle East and that has been our position for some time. So this money is not to underwrite settlement activity.

MS. KELEMAN: Could it be used more as leverage to persuade Israel to stop?

SECRETARY POWELL: We will judge it on its merits and we will see what case is made for the funds requested and we'll see how Congress chooses to dispose of that request.

MS. KELEMAN: You already made some comments earlier today, but you've talked a bit about these allegations that the wife of the Saudi Ambassador may have inadvertently -- a check she wrote may have inadvertently reached the hands of some of the 9/11 hijackers and that --

SECRETARY POWELL: No, no, the story isn't even that.

MS. KELEMAN: It's very oblique.

SECRETARY POWELL: No, the story isn't even that. The story that was reported in the paper is that Princess Haifa has given money -- she has acknowledged it -- to some individuals she believed in need who might have been associated with hijackers. But there is no story. The story has gotten -- see, the story grows with each telling that she gave money to hijackers and that's not the story.

I have known Prince Bandar and Princess Haifa for many years and I think it most unlikely that they would do anything that would support any terrorist organization or individual. But let's see what the facts are. And I know that the Prince and the Princess are cooperating with authorities in explaining where the money went and for what purpose, and let's see where the facts lead us, as opposed to just going on the basis of a story or an allegation.

MS. KELEMAN: How difficult is it, though, to go after this whole issue of these charitable contributions? I mean, it's --

SECRETARY POWELL: It's difficult because people are free in any society to do what they wish to do with their own funds. But we have spoken to the Saudis about the potential for individuals making individual contributions to charities or causes that might then pass that money on to terrorist organizations which could come back to haunt us and to, frankly, kill innocent Americans or kill innocent people in other countries. I think the Saudis are concerned about it and we're working with them to identify such organizations, such individuals, to put a stop to it.

MS. KELEMAN: Okay, I do have one other question, a side issue. Another issue that came up this week, President Bush is setting up this agency to handle Millennium Fund money. Is this a bad sign for USAID?

SECRETARY POWELL: No, not at all. I think it's a great program. We are all supportive of the Millennium Challenge Account because it will represent a 50 percent increase in the amount of foreign aid funds that the United States will be spending to help countries in need. It'll be outside the normal AID kind of funding programs. The Millennium Challenge Account is going to go to those nations who have made a commitment to democracy, to good governance, to the rule of law, to ending corruption, and it's going to help these developing nations who commit to these principles to build up their infrastructure -- education, roads, water, the things they need to give their people a better chance at creating a more stable society and an economy that will allow them to provide jobs for their people.

So these will be funds that go against these standards of good governance and not just your normal AID type of funds. The Administrator of AID, Andrew Natsios, and I participated fully in the development of the Millennium Challenge Account and the way it's going to be organized, it will be a separate, free-standing organization and I'll be the chairman of the board, and then there will be a full-time director of whatever we end up calling the specific organization.

MS. KELEMAN: A major change in the way the US gives --

SECRETARY POWELL: It is a major change in the way we will be providing assistance. These countries will apply for these funds. They will have to meet certain standards of good governance and the rule of law and a commitment to democracy, and they have to be truly in need. There will be -- it will be a needs-based program. And if they meet those standards, we'll try to help them. And this will amount to an additional $5 billion every year when the program is up and running to invest in those countries that are moving in the right direction and we'll use these monies to help their people.

MS. KELEMAN: Do I have time for one more question on the Iraqi exiles meeting? Okay, one more question. The State Department has been doing a lot to get Iraqi exiles thinking about a post-Saddam Hussein regime, but your colleague in Belgium did not want this meeting to take place of Iraqi opposition figures in Belgium because he said it puts us into -- it puts Belgium in an awkward position of looking at regime change when, in fact, inspections is what were really on the table, disarmament. Are you meeting resistance from --

SECRETARY POWELL: No, the conference has been moved to London and the British authorities were very pleased to host it. So the meeting will go forward and I'll let the Belgian authorities speak for themselves. They thought there was some inconsistency between such a conference and their obligations under 1441. I didn't see it that way and the British don't see it that way.

MS. KELEMAN: And you've asked some 50 countries about -- I'm sorry, okay. Wait, let me just say thank you.

SECRETARY POWELL: And a Happy Thanksgiving to you, Michele, and to all your listeners.