Press Availability at the Australian-American Leadership Dialogue

QUESTION: Yesterday, in Sydney you talked about how delighted you were with the state of relations between the U.S. and the P.R.C. Is that technical or strategic from both perspectives?

MR. ARMITAGE: I suspect it is a bit of both. There is nothing preordained about the relationship and clearly both the People's Republic of China and the United States recognize we have some differences -- Taiwan being one of them. But we found over the last 2 years both the war on terrorism and the search for solutions to the D.P.R.K., more generally in discussion of regional issues that we are able to have discussions unlike those we ever had before with China, much more give and take. We realize there are problems that crop up in the relationship but we feel a particular confidence that we will be able to handle them. I think they are doing well. They speak for themselves.

QUESTION: What do you bring that down to?

MR. ARMITAGE: Pragmatism. I think these are two huge countries. China undeniably is going to take a place rightfully on the world stage. We want China to a benign, very helpful actor on the global stage and to the extent we can in some manner assist that, then we are happy to do so. There is a lot of work in the world. We would be happy to have a helping hand from the People’s Republic of China.

QUESTION: There’s been a lot of talk revaluation of the yuan. Did that come up in those discussions?

MR. ARMITAGE: In which discussions?

QUESTION: With China, did you talk about currencies?

MR. ARMITAGE: My understanding is that our Secretary of he Treasury has been talking about it all through Asia and everywhere else and several other Asian countries have also talked about appreciating (inaudible). Clearly, with our growing trade deficit with China, we realize that the currency does appreciate. It won't be immediate but over the long term it won't make a difference.

QUESTION: Including Japan, the yen with Japan, do you have same sort of issues with Japan?

MR. ARMITAGE: On the trade deficit? No, what are they at between 150 and 120 now and it was as low as 105, 110. I don't think we've had those same discussions recently, but as I’ve said, that’s little bit off my patch.

QUESTION: You made the observation that the United States has given to some fear and anger when perhaps hope and optimism would have been better. There are parallels between what Australia is now attempting to do in the Pacific and whether you would have any thoughts about they ought to approach that?

MR. ARMITAGE: Let me be absolutely clear what I said and then I’ll be more direct on the Solomons in some specific aspects. I think historically that Americans like to concede ourselves that we have put forward a face to the world that is one of optimism and enthusiasm and hope and all of that. I think we have found and we have noticed in the wake of 9/11 that what we've been exporting publicly is our fears and our anger over this heinous attack. We recognize that. We discussed in the inner councils of government. We are going to try to get back to a much more congenial, forward-looking, optimistic presentation to the world in word and in fact. I was pleased yesterday when I went to the Consulate and I asked them specifically about such things as student visas which a year ago was more of struggle when we had queues several months longs. Now we’re down to three weeks or less. I think we’re trying by our reactions to be a more friendly place.

Regarding Australia's actions in the South Pacific, more particularly in the Solomons, yesterday I described it as my view of a nation acting with a vision, why they wouldn’t let the neighbourhood continue to go south. In this case stepped up with like-minded friends, the Fijians and the Tongans, the Papua New Guineans and the New Zealanders to try to right the situation we are all in. I thought this was a great example of Australian regional leadership and I salute them mightily. I can't say whether you are exporting your fears or what not. You were horribly attacked on October 12 as far as I’m concerned and I do recognize there is a tendency to react that way. It looks to me as if you didn't blame the nations in which al Qaeda was hiding. You attempted to assist them; in this case it was Indonesia.

QUESTION: You made the point your concern was perhaps Australia was stretching itself militarily.

MR. ARMITAGE: I noted that I had a nice discussion with the C.D.S. He had indicated that recruitment was up but when you have 1,500 troops out in the Solomons and you have been so tremendous in Afghanistan and in Iraq. I note we are very stretched; that’s not a state secret. So I was expressing both appreciation and some understanding of the fact that when you operate at that high tempo, there is wear and tear on machines and wear and tear on people; and so that’s an extra bit of sacrifice and it is my way of showing appreciation.

QUESTION: If you’re stretched and we’re stretched, isn’t there an inevitability that the dimension of military spending has to increase from current percentages?

MR. ARMITAGE: I think the United States is pretty sui generous. We have maintained good years and bad, lean years and the better years have been pretty robust in defense spending, maybe not what many at the Pentagon wanted, certainly when I was there it wasn’t what I thought we needed, but it's been pretty robust. Compared to other every other developed nation it has been consistently up in the three, four, five percent range. Contrast that with the NATO aspirants, one of their entry requirements was to have defense spending coming up to the 2 per cent of GDP level. We have long recognized that we need to keep the level of defense spending. Many nations have not had this same recognition. I remember working with then Minister of Defense Beazley in 1983 on the White Paper which became the blueprint for the rationalization of his defense forces at the time in which he was trying to develop a scheme; I mean that in a positive sense, a plan that would win favor for successive defense funds because it was rational. It made sense to a great majority of Australians. He did that very well; I think Mr. Hill is doing the same type thing.

QUESTION: We are still under 2 percent, we’re about 1.9.

MR. ARMITAGE: But you have something that we don't have. I notice that you have the expectation that you will fund O and M monies. And it’s the capital expenditures, the procurements and things of that nature which you go back to Parliament for. It appears to me that's where the debate is. Our system is quite different. Our O and M comes off the top line so I think our number would be somewhat lower if our O and M expenditures were figured the same way as yours are. Or conversely yours might be somewhat higher if you figured them like we did.

QUESTION: When you talk about your intention to take a more congenial, optimistic approach and present it to the world, what are the components of that apart from the one example that you gave? What does the U.S. intend to do differently?

MR. ARMITAGE: We are so horrified and angry about 9/11 that to some extent we thought everyone would see things the way we did. We’ve realized that is not the case. Moreover I think there has been a very good and in-depth examination of the nature of democracy. My father and many of yours fought for it, they valued it and then one must respect the outcome of the democratic process. This came to us, dead center, during the debate over Turkey. In the beginning part of the war, we went forward with a supplemental request that had a certain amount of assistance money for Turkey. Congress was furious that the Turkish national assembly didn't see fit vote with us and allow the transit of U.S. forces, etc. The point that won the day after quite a debate was that if we do respect democracy, we have to respect the outcome of the democratic process. Maybe the burden was on us to have worked a little harder, a little more assiduously with those members of the elected body, the legislature, to try to win favor. We’ve come to those conclusions. We are working hard on public diplomacy, on things such as the visas, etc., although we’re going to do what the President must do, what he needs to protect the nation. We’re trying to it with much more regard for people who do desire to travel to the United States and participate in schooling and training or just to visit. It is everything from public diplomacy to the way the process visas.

QUESTION: What about hard policy ... would you reconsider the preemption doctrine?

MR. ARMITAGE: No. I don't even know why you raise it, Peter, preemption has been a doctrine that has been here as long as there have been people who used to carry spears. I daresay that if the government of Australia knew with crystal clarity that they were about to be attacked from point A, B or C, preemption would look pretty good; it would look to the pretty good to the population here and would look pretty good to the government ... the same is true with the United States.

QUESTION: The reason I raise is the great reversal of world public opinion especially in the Muslim world that occurred in response to the invasion of Iraq.

MR. ARMITAGE: I have a completely different view of that. We had very, very negative views of the Muslim world prior to Iraq. It's complicated. A part of it had to do with the Middle East peace process; you cannot avoid recognizing that. I can't put a percentage to it. Part of it had to do with the frustration that we are a nation that is pre-eminent in every aspect of our being whether it is military, or economic or even cultural. You go to these places and it’s jeans they are wearing under the robes and moreover, it's U.S. jeans. There is a great deal of frustration, a lot of bad feelings in the Muslim world, not just the Arab world but also in Indonesia and Malaysia. How can I say this ... well, I think I will leave it there.

Regarding the invasion of Iraq, right now a couple of nations in the Moslem world have extraordinarily positive views of the United States for obvious reasons. 83 % positive in Afghanistan, about 62 per cent in Kuwait obviously because of what happened 10 years ago. It is still negative in other parts of the world. Part of that negativity is because there is frustration at their own lack of transparency and their governments’ lack of economic opportunity or political opportunity for that matter. We were a very convenient and to some minds a legitimate scapegoat. We found in the wake of the invasion of Iraq and more particularly when all the world, including al-Jazeera and the other networks sometimes give us a little trouble, a great appreciation of the first time in decades, a sheer majority were able to participate in Karbala and Najar. And if that is not a Muslim-friendly action, that it was 82^nd Airborne on either side leading to Karbala, out of sight providing the water and food that allowed the pilgrims to make that. And that single act did have some resonance in the Moslem world. It is unarguable that the invasion of Iraq is what brought about the situation of where the Shia could practice their faith.

QUESTION: Are you suggesting that sentiment in the U.S. could change in these countries, but the onus is on those governments in those countries to reform themselves rather than the U.S.?

MR. ARMITAGE: Yes, but I think we have a role to play. Yesterday some gentleman asked me a thoughtful question about the Marshall Plan, about a global Marshall Plan. We’ve started in the Middle East something called the Middle East Partnership Initiative. It run by the daughter of the Vice-President who works for us in the Department of State, Liz Cheney. It is built on three pillars. It’s not the traditional USAID program where we go out and try to do all things to all people. It's built on a pillar of good governance, second, empowerment and education and empowerment particularly of women and the third -- what's the third element -- governance, economic prosperity -- there is one other. We’re targeting just to the areas where we think make a big difference and not just trying to spread the money around a little bit. It makes a big difference to those disenfranchised in the political and education realm. We have restructured our entire aid program which is over $1 billion a year to Egypt. If you don't think that is a wrenching experience, to take something that has been going on for 20 or 30 years and then rejigger it in a way that is going to talk about empowerment and governance, education for women and things of that nature.

QUESTION: In Afghanistan, is it alarming to you that there seems to be a Taliban resurgence particularly in the south and east?

MR. ARMITAGE: Violence is clearly up in Afghanistan and I think the jury is still out on how much is Taliban and how much is warlordism. For every bad story, violence is up; there is no question about it, I can give you the other side of the story. For instance, Hamid Karzai just replaced by the warlords with a fellow much more congenial to the central government. I know as an American official that has to travel out to Afghanistan, when I first went there, I would be importuned by every citizen saying why isn't there reconstruction? What are you doing? That is no longer the case. Now there is enough activity going on in the country that people are seeing. Just like in Iraq, security is going to be key. The main difference I tried to express yesterday between Afghanistan and Iraq, and that is in Afghanistan, the physical or the human infrastructure is pretty resilient -- very resilient. The Taliban had been around long enough to completely crush it all. They had war for 20-odd years, but not the kind of degradation and deprivation they from the Taliban. The human infrastructure in Iraq is much more difficult problem because of the 35 years -- two generations of brutality that families and people suffered.

QUESTION: On the resurgence of al-Qaeda in Afghanistan, how much substance is there to the stories of Pakistani ISI complicity in this? Is Musharaf in control of ISI or is he playing some sort of double game?

MR. ARMITAGE: The policy for 10 or 12 years of the Pakistani Government was to support the Taliban. Having a Pushtin dominated state next to Pakistan was a strategic goal of successive Pakistani administrations. Clearly, the area in which al-Qaeda in your words is resurgent, I would say not resurgent, active, is tribal areas which were verboten to Pakistani military including the Khyber rifles, historically. They were not allowed into the tribal areas. Part of the direction of U.S. assistance for President Musharraf at his request has been a certain amount of aid which builds roads and clinics in the tribal areas which has allowed the Pakistani government for the first time to be there.

I believe Musharaf is able to control the I.S.I.D. I believe that Mohammed Kharzi trusts Musharaf, he told me that. I wouldn't say he trusts all Pakistanis but he trusts Musharraf as a man of his word. The fact that U.S. forces in hot pursuit the other day on the Afghan side in the tribal area came into contact with Pakistani soldiers who were trying to assist us and accidentally shot two I think is indicative of the fact that Musharraf has his soldiers and consequently I.S.I.D. out trying to do better things in the tribal areas. I think the bad reputation comes from some former I.S.D. people, most particularly Major General Hamid Goul, retired, who is running back and forth between Pakistan and Afghanistan continually. He has no association with the Pakistani government but he is a source of some suspicion.

MR. ARMITAGE: I don't know where he is. Most people speculate he's either in Afghanistan or in the tribal areas.

QUESTION: Let me ask you about al-Ghozi, the Phillipines, Bali, still at large. Could you talk about the capacity of the Indonesians and the Philippines to cope with this?

MR. ARMITAGE: It is different in every place. Yesterday I was talking with Greg and he wanted to know about cooperation of Thailand. He put it basically in a more negative context and I cautioned him to be careful because you will be surprised the cooperation with Thailand will soon become public. It's very good. Indonesia, as you've seen, they've finally had the blinders lifted from their eyes. Mrs. Megawati and the tone of her statements and the way she's carried herself recently in the wake of this recent Jakarta bombing. I think she was quite shocked. She’s asked us for help, asked Australia for help. I think there is a new chapter.

I found something very meaningful in the recent court appearances of the Bali accused. That apparently the government of Indonesia has sufficient self-confidence to put these guys up publicly and let them have their say without feeling this was going to tip some applecart. And I thought that was a quite a hopeful sign. The Philippines are much more complex because of Fathur al-Ghozi getting out. Clearly something is rotten in Denmark when this can happen. But equally clearly in addition to the Abu Sayef group which roams around in southern Mindinao, you have others who have for 20 or 30 years been pursuing their own aims. Some of them, although I don't appreciate their methods and terrorism is not to be condoned, there are legitimate grievances that the people of Mindinao have had historically with the government of the Philippines. Mrs. Arroyo came to Washington, met with President Bush and spoke very forthrightly about her desire to right these wrongs and correct the direction that Philippines government policy has had historically towards the southern island. It's a very complicated situation and it’s very worrisome.

QUESTION: Do you expect the President to go to the Philippines after A.P.E.C. meeting?

MR. ARMITAGE: I kind of like my job so I think I will stay away from scheduling the President, bad business indeed.

QUESTION: What do you make about the suggestion there is a debate going on with the JI organization whether they take a militant or return to a sort of political approach?

QUESTION: Jemaah Islamiah. You tend to get the feeling all of these groups are militant and terrorists. But do you accept that there is a political element to it and they could return to that sort of approach?

MR. ARMITAGE: I don't have any idea. I only accept right now they are terrorists and trying to do as much damage as they can to you, us, Jakarta and anybody else that they can. I wouldn’t parse their organization into a political wing or a militant wing reminiscent of the IRA debate years ago. All things become clear in the fullness of time.

QUESTION: What is clear about the understanding of how they operate in this region in terms of suicide bombers cells within JI?

MR. ARMITAGE: Some people think in the Jakarta Marriott bombing, it looks like the guy walked away and remotely detonated. I don't have an insight into the whole operation. I read the intelligence, we exchange intelligence with our Australian friends and others, including the Indonesians. There is no question these folks are loosely affiliated with al-Qaeda. They have a free flow of people back and forth and certain monies come from the Middle East to fund their activities. Their methods thus far, the bombings they have conducted thus far, make it crystal clear to me they have no compunction at all about doing as much damage as possible and certainly they are looking for softer targets. They want to do as much horrible damage as possible. The difference with this Marriott bombing the other day 12 unfortunate people died and about 150 were about four feet away. The restaurant was crammed full and had the blast been slightly closer we would have had much more heinous event.

QUESTION: When you say their money comes from the Middle East to fund their activities, are you thinking of Saudi charity money or more particularly al-Qaeda money?

MR. ARMITAGE: Much al-Qaeda money came originally from unregulated organizations sometimes who were called charitable organizations, non-governmental organizations in Saudi Arabia. I don't think it's a secret that some of that money is found in southern Indonesia.

QUESTION: I’ve just been reading a book about intellectuals, the most cited public intellectuals in America, including Chomsky.

QUESTION: I noticed that during the Samudra trial in Bali, he was reading Michael Moore. To what extent do you think this stream of thinking in the West is feeding into militants?

MR. ARMITAGE: Zero. Even the devil can quote Scripture. It is just chaff, like an aircraft throws out chaff, that's what he is throwing out -- chaff.

QUESTION: What is the stage for potential U.S. bases in Australia? I got the impression the other day geographically that we’re not all that well located; we are long way from anywhere. What is the current thinking?

MR. ARMITAGE: There is a worldwide global review conducted by the Pentagon on our basing needs and our basing structure now. It's proceeding apace. I don't think it is ready to come out in prime time. The bottom line in this we want to be in a position where we can respond more rapidly to our all of our responsibilities. I said yesterday agility and mobility are two of the major aspects of whatever the basing scheme will come out. There are other elements of it, diplomacy and funding and both of those will rear their heads as well. I am completely unaware, and I’m pretty sure I would know, of any plan for anything in Australia and hence I can give a categorical answer.

QUESTION: Where does Australia fit in? What would make Australia attractive?

MR. ARMITAGE: Perhaps if you could move Australia 3,000 miles north it would be quite attractive. There are a lot of great things, great tracts of uninhabited land where exercises could be held and things of that nature. But basing, when I say the whole direction of our military forces agility and mobility, this would add a tyranny of time distance equations. It would add time.

QUESTION: Why would you put that ahead of al-Qaeda? What makes you feel that they are the A team? What's the dimension of the threat they pose?

MR. ARMITAGE: I said they are the A team because they are extraordinarily well-organized. They are truly global in scope and they are quite dedicated. In recent years particularly after the embassy and the Marine bombing, Hezbollah has not to my knowledge, been directly targeting the United States. They have the capability to do it. They have the capability to do it in almost every region of the world. They are a terrorist organization. I have made the point that we are owed a blood debt, by those guys at some point in time. The President said we’re going to go after global terrorists. Right now we are focused on al-Qaeda but we’ll get around to them.

MR. ARMITAGE: We have as you have seen several ... I don't know how many foreign terrorist organizations, thirty odd folks, some Chechen groups and things of that nature. Not every one of them lends themselves to a military solution. We worked for instance quite rigorously against the Chechen terrorist groups by training and equipping Georgian forces to able to go into the gorge and root these guys out and run them across into the arms of the Russians who are quite delighted to take charge. Although there may be 30-odd groups on the foreign terrorist list they are not all ones that require a military solution. In some cases I will give you another indication, the LTTE in Sri Lanka. They are on our terrorist group. They know what they have to do to get off and get out of the terrorism business, that is they have eschew in word and deed terrorism as an instrument of political policy. They have not yet made that decision hence they stay on the list.

QUESTION: (inaudible) missile defense, I think three years or something. What is the state of play, what sort of threat (inaudible)

MR. ARMITAGE: You will have an opportunity, my colleague, J.D. Crouch from the Defense Department has direct responsibilities for this is coming out in a week or two, so he will be here for you to get an expert's opinion. We hope to be able to handle the type of threats that might present themselves from a Korea in the first instance if we are unsuccessful in these upcoming talks and laterally from Iran. Right now these are the two main culprits and they are both intent on developing missiles and of course North Koreans in 1998 proved they have the ability to fire one over the island of Japan. That's the direction we are heading in. I will let J.D. tell you technically where we are and how good we are right now.

QUESTION: Is this going to be the show stopper in terms of relations with China, is that the issue?

MR. ARMITAGE: I have been having discussions with Chinese in the past two and a half years and missile defense has been the smallest portion of it. In fact they have been exposed to our full missile defense plans. Their concern has to do with Taiwan. Our concern has to do with the fact that it's China who puts the short range missiles across the Strait of Taiwan. We have made it clear that there would be no need for missile defense in Taiwan if there were no missiles across the Straits threatening them. But in the last year I know I haven't had discussions with the Chinese on this missile defense and it has not been a factor.

QUESTION: In fighting terror, what do you see as the main limitations to U.S. military power?

MR. ARMITAGE: It's funny, the main limitations are our dependence on the Guard and the reserves. Combat support, combat service support are primarily in the Guard and reserve forces and the nature of this global war on terrorism is that it's a long-term and when you take combat service and combat service support people away from their jobs, whatever they do, whether they are school teachers or anything else and deploy them for six months a year, this is not something that most signed up in the reserve and Guard to do. That's the real, I believe, the most troublesome aspect of the U.S. military these days.

MR. ARMITAGE: Mr. Rumsfeld has commissioned a study it to see if there should not be a change in the numbers of people who are combat support and combat service support and are active. A lot of things are changing in the U.S. military, in every military. It's no longer absolutely the case you need the same number of very strong young 25-year-olds who can carry a rucksack all day long and charge up and down hills. Yes you need a small number of those. You do need them. But you don't need the numbers that you did in the past. You need fellows who can do computers, logistics and things of that nature. You have a predator is a terrific weapon as we saw in Yemen with the take-out of the terrorist in Yemen. It can be flown from thousands and thousands of miles away by a fellow that is fatter than I am, just sitting there, successfully. The whole nature of military involvement is changing. We and others are trying to come to grips with it. You will see, I will predict at some point in time not next year you will find people who come into the military as a second career. They are logistics experts and they wear a uniform and they sit in a warehouse in New Jersey and they made great decisions on which logistics go where to support the lesser numbers number of troops who are actually engaged. That is the direction of all military services these days.

MR. ARMITAGE: In the time of D-Day when we had the dead body float ashore with the false information in the Normandy invasion, psychological operations has been a part of warfare. I don’t know if it has gotten so much more sophisticated. We have abilities now, nations have the abilities now to interfere with broadcasts of TV and emails and things of that nature. It's just a logical extension of what has been going on for thousands of years where people substituted false messages for good messages, when they sent the couriers in the times of the Greeks and the Romans.

QUESTION: Would you characterize the needs of the U.S. with an alliance partner like Australia as more demanding now after September 11 than it was five years ago?

MR. ARMITAGE: It is more demanding of officials and government than it was. It is not any more demanding in terms of asking governments to do things particularly. It is more demanding of officials and government because of the nature of the global war on terrorism is one that has come 360 degrees. We recognize that we need a lot of help, for that I think Australia in certain matters sees you need help. What this has brought about is I think an increased interaction between governmental officials. I used to think we had a pretty good relationship; we’d see our colleagues a couple of times of year, but nothing like we've had in the past two and a half years. The demands on us to interrelate have increased dramatically. Likewise, we have a couple pieces of legislation on Capital Hill right now a direct result of our global war on terrorism, ITAR exemptions for Australia and Great Britain. We’ve done away with most of the classifications on our intelligence, so you’d see 99.9 per cent and of course everything that bears on Australia. So I think it has got more demanding in terms of the time it takes officials these days.

QUESTION: Where would the Alliance be if Australia hadn't gone to Iraq with the U.S.?

MR. ARMITAGE: We would have an Alliance. We would continue something that nobody paid attention to the other day. I’ll repeat it today but we have a closed audience. I believe that our relations and our interests overlap a great deal but it is not 100 percent overlap. I believe just like the United States Australia is absolutely committed to do the right thing in the world. I said yesterday we also have to do the right thing by our people. In that regard, that will mean for both of us there will be occasions of selectivity. We are going to have differences of opinion. I'm not worried about being able to work through them particularly as we have the type of interaction post 9/11 that we’re having. That was part of that speech yesterday that no one paid any attention to but the point was we have things that keep us together a lot more than those things that temporarily might separate us.

QUESTION: Would there be a high prospect of a Free Trade Agreement if Australia hadn't have gone to Iraq?

MR. ARMITAGE: We had made the decision for a Free Trade Agreement prior to Iraq. There were no understandings of any sort with the government of Australia. This was announced by Bob Zoellick and the State Department last year about this time at the time of the Australia-American Leadership Dialogue. It was exclusive of Iraq. We stayed the course.

QUESTION: But when the President had put that timeline on it, and quite an urgent one, by the end of the year, you have had the sense then that was in some way related to Iraq or Australia's involvement.

MR. ARMITAGE: I think that President Bush feels a great debt of gratitude to people of Australia and to John Howard. It's one of the ways he could show it by trying to urge our bureaucracy to get this thing done as quickly as possible. At the end of the day this is going to have to be an agreement with both sides, it’s got to be a win- win. If your side, particularly your agricultural interests don't feel that you're getting a fair go, then we won't have an agreement. The same is true of us. But right now Mr. Bush has put the energy into the U.S. side necessary to try to complete this thing by the end of the year.

QUESTION: On the political cycle in the United States. I would assume, I mean it operates differently in Australia where the Foreign Minister is an elected politician and probably looks forward to an election as much as anybody else. I assume this would be the one year that you dread in a sense coming up in 2004?

MR. ARMITAGE: No, everyone gets through re-elections in positions of government. I don't think I dread it particularly. In a way the Congress is thinking about something else. So actually we get a little less help than is normally the case. A third of the Senate and all of the House is looking for re-election. And they don’t score the points with the State Department, they score the points domestically. Second of all, President Bush has a commanding lead over any, will match one on one with any of the Democrats thus far, which is another element that acts in favor of the administration that is in power because members of Congress realize that are going to have to deal with us later, again. You can ask Porter Goss, he’s here; you can ask Jane Harman and others, on both sides of the aisle, they will be able to tell you about it. Where it gets a little crazy is if there is a real what I would call dangling Irish pennant in foreign policy, if something goes terribly wrong. Then I would dread it because we’d all be dragged, a la Contra affair. I hope nothing like that is going on but something like that would be a nightmare in an election year. More so in an election year than any other time.

MR. ARMITAGE: I saw the Iranians responded to my comments yesterday by saying they were certainly not going to turn those people over to the United States but if they turn them a Saudi citizen over to the Saudis and an Egyptian over to the Egyptians that will be fine. We will get what we need. If they turn them over, these are words. They responded to my comments. They were unamused by them. They said what I just said the Saudi can be turned over to Saudi Arabia or Egyptian to Egypt. That's fine, turn them over. They have got them. Their intelligence team said they had them, it's not a matter of taking my word for it.

MR. ARMITAGE: We know who they have and they have some people who are quite high up that we are very interested in. With the Saudis they know a lot about the whole planning of the Riyadh bombing of May 12, we want these guys. And to the extent Iran refuses to let them go, it raises suspicions about what their motives might be.

QUESTION: If they knew about the planning of the Riyadh bombing does that mean they were in some way complicit?

MR. ARMITAGE: The Iranians? I didn't mean to suggest the Iranians, the people the Iranians held we feel knew about it. The nature of these terrorist events, some thing put in motion and it continues without much rudder direction once the plan is launched. The timing of the commission of the evil is left to the people who are actually going to do it. It is not something that is necessarily detonated by the command sitting in the tribal areas or anywhere else.

QUESTION: Any sightings of (inaudible) of the operational team for Hezbollah? Are there any suspicions that he is setting up linkages between the revolutionary guards and al Qaeda?

MR. ARMITAGE: Not that I've seen but there are some indications that Hezbollah in small groups has begun to have a presence in Iraq. Whether they will use some of the confusion in Iraq to try to strike a soft target we don't know. But we are aware they are in Iraq in small numbers.

MR. ARMITAGE: I don't think so. I don't know; I haven't seen any direct links. One thing about the terrorists there is a certain amount of funding, a number of people in the world who facilitate these activities. Three less now than there were two days ago, thank God. So they cross in that regard. I don't know that they actually sit down and plan things together.

MR. ARMITAGE: They want Israel into the sea clearly. Their political arm leader is a very clever fellow, an excellent speaker and excellent negotiator. He's got a very keen eye for public affairs and public diplomacy. Until al Jazeera came on the scene the broadcasts from Hezbollah radio stations in Lebanon were the most listened to and believed things in the Middle East, less so now. They have contented themselves more recently in moving into the political realm. They have two seats in the Lebanese parliament now. (inaudible) and a few other of these characters still maintain the capability to create harm for us and others. The bombings in Peru a several years ago were Hezbollah directed primarily against Jewish interests.

QUESTION: You will be pleased to hear Hezbollah TV is the second or third most popular Arabic TV in Australia.

MR. ARMITAGE: The second Intifada, it was markedly different from Intifada one. What was so different about it was that Hezbollah TV, al-Jazeera and others started showing the scenes of the Palestinians throughout the Middle East and the Palestinians started to get smarter with public diplomacy and people who were injured or hurt some fashion into Intifada 2 were sent to hospitals throughout the Gulf. You had for the first time the phenomenon called grey ladies who would go in and visit these wounded Palestinian children and mothers, they got a great wellspring of sympathy for the Palestinian cause. There was a very interesting phenomenon that was fuelled by Hezbollah TV, al-Jazeera and few others.