SECRETARY POWELL: Thank you very much, Mr. Minister and good evening ladies and gentlemen. I am very pleased to be back in Egypt and to have had the opportunity to meet and consult with President Mubarak and with the Foreign Minister. I've known President Mubarak for many, many years and it is good to renew the friendship. He is looked on as a wise leader not only by his people, but by people throughout the region and throughout the world. This occasion also gave me the opportunity to strengthen my relationship with the Foreign Minister and I look forward to working with him in the months and in the years ahead.

President Bush asked me to make Egypt the first stop in my Middle East trip -- to seek the advice and consul of President Mubarak on several critical issues. We discussed the deterioration of the situation between the Palestinians and the Israelis and the escalating violence, which is causing us all such concern. In our conversation we recommitted ourselves to the search for peace based on U.N Security Council Resolution 242 and 338. We also discussed the need to relieve the burden on the Iraqi people whilst strengthening controls on Saddam Hussein's efforts to develop weapons of mass destruction and the means for their delivery. Egypt and the United States have a long-standing intensive military-to-military relationship, which grew stronger as we stood as comrades-in-arms to defend an Arab state--Kuwait--from unprecedented aggression some ten years ago. We stand ready today to meet any similar challenge to the international integrity and security of the states in the region. We are also cooperating, as you all know, to develop new opportunities for trade and investment and to strengthen Egypt's participation in the global economy. We will meet again shortly; I look forward to that meeting. President Bush has invited President Mubarak to visit Washington on April 2nd and President Mubarak has accepted that invitation. President Bush and I look forward to seeing him then, to further cement our strong relationship with Egypt.

Thank you very much.

QUESTION: The Egyptian press editorial commentary that we have seen here has been bitterly aggressive in denouncing the U.S. role and not welcoming you. I am wondering whether you believe you accomplished anything during your meetings to assuage concerns about the air strikes against Iraq and the continuing sanctions?

SECRETARY POWELL: I received a very warm welcome from the leaders and I know there is some unhappiness as expressed in the Egyptian press. I understand that, but at the same time, with respect to the no-fly zones and the air strikes that we from time to time must conduct to defend our pilots, I just want to remind everybody that the purpose of those no-fly zones and the purpose of those occasional strikes to protect our pilots, is not to pursue an aggressive stance toward Iraq, but to defend the people that the no-fly zones are put in to defend. The people in the southern part of Iraq and the people in the northern part of Iraq, and these zones have a purpose, and their purpose is to protect people -- protect Arabs -- not to affect anything else in the region. And we have to defend ourselves.

We will always try to consult with our friends in the region so that they are not surprised and do everything we can to explain the purpose of our responses. We had a good discussion, the Foreign Minister and I and the President and I, had a good discussion about the nature of the sanctions -- the fact that the sanctions exist -- not for the purpose of hurting the Iraqi people, but for the purpose of keeping in check Saddam Hussein's ambitions toward developing weapons of mass destruction. We should constantly be reviewing our policies, constantly be looking at those sanctions to make sure that they are directed toward that purpose. That purpose is every bit as important now as it was ten years ago when we began it. And frankly they have worked. He has not developed any significant capability with respect to weapons of mass destruction. He is unable to project conventional power against his neighbors. So in effect, our policies have strengthened the security of the neighbors of Iraq, and these are policies that we are going to keep in place, but we are always willing to review them to make sure that they are being carried out in a way that does not affect the Iraqi people but does affect the Iraqi regime's ambitions and the ability to acquire weapons of mass destruction, and we had a good conversation on this issue.

FOREIGN MINISTER MOUSSA: I would wish to borrow two expressions from what the Secretary has just said, that this situation should be under constant reviewing. So it's not a stagnant situation that we accept things as they are, but should be reviewed. The other thing is that, as the Secretary said, he knows that there is unhappiness and knows what is taking place in Iraq. What we need is to give the full chance for the talks that are going to resume or start after tomorrow in New York between the Government and the Secretary General of the United Nations about the whole question of Iraq and the Security Council resolutions, and the Secretary General is going to listen to what the Iraqis have to say, concerning sanctions, concerning the situation after ten years, etc., so this meeting should be given full opportunity for both parties to talk, to listen, and then, judging from the results of such a meeting, I believe we shall all be reviewing the situation. So there are certain stations that are coming up and we will see what we can do.

QUESTION: You said earlier that there is no moral equivalence between the Palestinian self-defense and the Israeli attacks. Will the new American Administration change its policy and not be as aggressive as the former administration?

SECRETARY POWELL: All human life is precious. What we all have to be doing now is encouraging both sides at every level to reduce the level of violence, to begin speaking to one another again, to begin restoring economic activities so that people can put food on the table, to begin restructuring the security arrangements that were lost. And so this is the time for all of us, not to point fingers at one another, but doing everything we can to reduce the level of violence, because if the level of violence remains high, then we have trouble getting the negotiations going again.

QUESTION: Do you support keeping sanctions in place against Iraq on a Presidential level? And then for Secretary Powell, if I could return to your earlier meeting with the Russian Foreign Minister. Now that you've had a chance to explain and to lay out some of the explanations on the national missile defense, how concerned are you that the United States is going to further alienate the Russians by moving forward precipitously with this?

FOREIGN MINISTER MOUSSA: While answering your question, first of all you have heard what Secretary Powell had to say about sanctions, that he is re-thinking our thinking of a new type of sanctions not the same. So if the Secretary of State is thinking in that way, do you think as an Arab foreign minister, I would give you a blank answer that sanctions should stay?

QUESTION: So are you saying they should be lifted?

FOREIGN MINISTER MOUSSA: Well, sanctions so far have affected the people rather than any regime. Sanctions should be reconsidered as a weapon or as one of the procedures the Security Council resorts to. But anyway, as I said, I want to concentrate on the talks that are going to take place the day after tomorrow. Those will be very important for all of us -- for the U.S., for Egypt, for the Arab countries, for Iraq, and for the rest of the world and for the international legitimacy.

SECRETARY POWELL: Let me agree with the Minister that the talks coming up between the Iraqi leadership and the Secretary General of the United Nations are important. We will see whether they are serious -- whether they want to move in the direction that will cause the sanctions to be lifted. Sanctions aren't something we want to live with forever. They were put in place in order to bring the regime into compliance with the international community and when that has been accomplished to the satisfaction of the international community and we can trust they have been, we will be in good shape.

With respect to Mr. Ivanov, I don't expect that my comments alienated them any further. I don't think they are that alienated to begin with. We are having good conversations. I was very impressed, as is President Bush, impressed by the fact that in the recent proposal they put forward to NATO, they indicated that they understand that there is a danger from missiles that are carrying warheads -- that are weapons of mass destruction. So I think we had a good conversation, a candid exchange of views, as is said in the diplomatic world. We have much more to talk about in the months ahead without alienating each other in the process.

QUESTION: Secretary Powell, there is a general feeling and consensus that the new American administration is prioritizing the Iraq issue than the Israeli-Arab conflict, which is the priority in the Arab agenda. So, I'd like your comment.

SECRETARY POWELL: No, I don't think that's accurate. I think the Bush administration is trying to look at the whole region as a priority and that you can't separate out these pieces-they're all linked. One rather significant change in emphasis in the new administration is that we are talking to our friends about all the issues in the region and not just one issue being more important than the others. That prioritization doesn't work any longer, in my judgement.

QUESTION: Mr. Minister, given the attack by the United States on Iraq last week, do you think there is a dangerous diversion from the efforts being made don't help calm the situation on the ground in the West Bank and Gaza?

FOREIGN MINISTER MOUSSA: Look, the situation in the West Bank and Gaza and on the Palestinian and Israeli track is very basic for all of us. So, no amount of developments in any other place would detract or distract us from the attention given to the Palestinian-Israeli track and the peace process in general with Syria and Israel and so on. But, the question of Iraq has its own dimensions and importance and we've discussed that in a quite detailed way and we are going to discuss that again. The peace process is so important that derailing the peace process or prolonging or procrastinating in this process would certainly affect the whole region and the stability in the Middle East in general.

QUESTION: Would you tell any specifics that Secretary Powell suggested about sanctions on Iraq and how to make them different.

FOREIGN MINISTER MOUSSA: Why do you ask me about what the Secretary said when the gentleman is right here in front of you? (Laughter)

SECRETARY POWELL: This is called push and shove. (Laughter) The Secretary can speak for himself.

FOREIGN MINISTER MOUSSA: Okay, go ahead.

QUESTION: Can we get an answer from either of you?

SECRETARY POWELL: We spoke in general terms about the sanctions regime and the specifics will come later. Right now, I'm in the process of consulting with my friends throughout the region and when that consultation process is finished and I've taken it back and talked to the President and talked to our friends at the Perm Five within the U.N., then all the specifics appropriate will be announced.

QUESTION: So you did not go beyond talking about (inaudible), you did not talk about specifics?

SECRETARY POWELL: We got into some level of detail, but I don't know if it is the level of specificity that you are looking for that I would care to speak about right now.

QUESTION: (summarized) The U.S. always tries to consult with its friends in the region, but did you consult with your friends before attacking Iraq or not?

SECRETARY POWELL: That particular strike last Friday, which got all the attention, was part of the pre-planned series of actions that we take in response to provocations from Iraqi radar systems and the like. Frankly, if it had not been so visible in terms of the announcement that the strike was undertaken, it might not have gotten the kind of attention that it did. It has certainly sensitized us to the need to do a better job of making our friends aware of the kinds of plans we are executing and the kinds of contingency plans we have for the no-fly zones.

QUESTION: You've mentioned trade and investment. How do you see the future of the Gore-Mubarak partnership and have you discussed with the President the future of the free trade agreement (inaudible)?

SECRETARY POWELL: I did discuss with both the Foreign Minister and the President an Egyptian-U.S. free trade agreement and made the point that we know of their interest in such an agreement. We have an interest as well. There are a lot of things that have to be done, a lot of considerations that have to be looked at before we can go further. I'm sure it will be a major item of discussion at the meeting that the two presidents will have in April. With respect to the Gore-Mubarak channel, of course, that channel has left with the previous administration. We are looking for new ways of engaging with our Egyptian friends and the Foreign Minister and I did speak about that at some length.

QUESTION: (summarized) Are you aware of the sale of oil outside Iraq?

SECRETARY POWELL: Yes, we are aware of the extent to which Iraq is selling oil outside of the oil-for-food constraints. It probably represents ten per cent of their total income and it is troubling to us. But the bulk of the oil still comes out of the oil-for-food program and I will be talking to our friends in the region about how we can do a better job of tightening up the leakage in the oil-for-food system.

QUESTION: (summarized) Do you expect the resumption of talks between Israel and the Palestinians?

SECRETARY POWELL: We are in a position where we have to wait for a new Israeli government to be formed and to take over. I hope that Prime Minister Sharon at that point will want to engage at every level as soon as possible, whether it's with respect to reducing violence or security arrangements or economic activity or putting proposals down on the table. So, we shouldn't see any of this "nothing happens until that happens." I think it's better for us to be prepared for all things to happen, for us to move forward. But we really have to wait to see what positions Mr. Sharon takes when he becomes Prime Minister in a short period of time.

FOREIGN MINISTER MOUSSA: Wait a minute please. We have two questions to go-okay, maybe one and a half questions. Okay, you have a half of a question. (laughter)

QUESTION: (summarized) There are reports in the Arabic newspapers today that you are proposing to take a harder line on Israel and (inaudible) with respect to Iraq. Can you confirm that?

SECRETARY POWELL: I've made no such suggestion.

QUESTION: Are you linking the two situations in any way?

SECRETARY POWELL: The whole region is looked at as a whole but I have not offered or suggested any kind of direct quid pro quo.

QUESTION: We know that Israel suggested establishing a strategic alliance with the Clinton administration. Is this idea still on the table and what are the possibilities of making a similar alliance with Egypt? Maybe you could just focus on the elements of the relations right now.

SECRETARY POWELL: The Foreign Minister and I have talked about things we might do in the future in order to strengthen the relationship at every level-trade, economics, security assistance, military aid-and we look forward to continuing the discussion. The exact form that it will take I think will be discussed by the two presidents when we get together in April.

QUESTION: (summarized) Will the United States veto the lifting of sanctions on Iraq in the U.N.?

SECRETARY POWELL: I can't give an answer to a question like that without knowing what a specific resolution might look like. It would be presumptuous of me to do so. Such a decision is based on what the resolution turns out to be.

QUESTION: (summarized) Minister Moussa, how big a threat is Iraq right now? It seems that the Secretary is trying to have it both ways. Either the country has been diminished by ten years of sanctions or it's still threat that we have to worry about.

FOREIGN MINISTER MOUSSA: For us, I don't see that threat, but if you ask the Gulf regions and countries of that area they will they would continue to feel that and they say it publicly. The question is not rhetorical. The question is not to have some headlines. It's a very serious situation. We will continue to deal with that situation in a way that ensures stability and justice. Therefore, we will have a lot to say after the round of talks ...

SECRETARY POWELL: May I just add a p.s. that if I was a Kuwaiti and I heard leaders in Baghdad claiming that Kuwait is still a part of Iraq and it's going to be included in the flag and the seal, if I knew they were continuing to try to find weapons of mass destruction, I would have no doubt in my mind who those weapons were aimed at. They are being aimed at Arabs, not at the United States or at others. Yes, I think we should...he has to be contained until he realizes the errors of his ways.

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