MS. PERINO: Good afternoon, everybody; good to see you. Obviously we are here in Rome. I am going to just take a moment to tell you about one thing going on that the President got briefed on, as far as domestic issues, and then I will turn it over to the President's National Security Advisor, Steve Hadley.

Today President Bush was briefed again on the severe storms which struck the Midwest yesterday and continues to cause problems in that area. He was saddened to learn about the four Boy Scouts who were killed and he has them in their thoughts and prayers -- the victims, the injured Scouts, the family -- and he's going to be keeping in touch with his team to make sure that we are doing all we can do as they continue to endure, especially the flooding in Iowa.

Homeland Security Secretary Michael Chertoff will be in Iowa today to meet with the governor, talk with local officials and survey the damage from the tornado.

This is the President's sixth trip to Italy, sixth trip as President. And he had very good meetings this morning and Steve will be able to talk to you a little bit about that, about the First Lady's speech in Paris, but also to preview for you of tomorrow's speech in Paris. MR. HADLEY: As you know, the Afghan support conference is now underway in Paris. The First Lady was there this morning -- she's on her way back -- and she had an opportunity to address the conference and to reiterate the President's support for a strong international partnership committed to Afghanistan's recovery.

This is a young democracy, they've made great progress, but there's a lot more needs to be done to capitalize on the security effort that is being made by ensuring that there is an acceleration -- and then to develop and rebuild the country.

There is, as you know, a five-year development plan that the Afghan government has approved, that President Karzai approved and submitted. It is a five-year plan and it is -- the purpose of the conference is to seek international support, financial support for that program.

The First Lady speech talked about the importance of supporting a stable, democratic and productive Afghanistan. And she also talked a little bit about the progress that has been made, but what remains to be done. The United States is pledging about $10.2 billion to the reconstruction effort. Some of this, a good part of it was announced earlier as part of our effort to show the countries the level of our commitment and to try to encourage them to make a comparable commitment to the future of Afghanistan.

This, of course, is in addition to the security contribution we are making. There are over about 60,000 troops in Afghanistan helping the Iraqi security forces; over half of them are American. There's obviously a -- that is an enormous commitment for our country in terms of sons and daughters potentially in harm's way in terms of the budgetary support for that effort, the cost that is entailed. And that's one of the issues, as you know, that's involved in the supplemental that is moving its way through Congress.

So we think America has shown the commitment it is making to this effort both on the security side, but also in terms of development. And our effort is -- and the First Lady's effort was to rally the international community to make a commitment, as well.

In terms of the speech that the President will make tomorrow, you've seen -- some of the excerpts of it have been released. I hope you had a chance to take a look at them. I'd like to just emphasize a few things that are there. I want to just mention and remind that on his first trip abroad after the commencement of his second term, the President came to Europe, came to Brussels, and called for a new era of transatlantic unity.

And I think this week you are seeing in the trip he's now making to Europe evidence of that new era of transatlantic unity. You have in Prime Minister Berlusconi, Prime Minister Brown, Chancellor Merkel, President Sarkozy leaders who are committed to a powerful and purposeful Europe that advances the values of liberty both within the confines of Europe and also beyond.

I think it's also clear that rather -- as you've seen the leaders talk about their discussions, the focus is not on differences, but on common interests and common ideals, which after all are the sinews of this alliance between the United States and Europe. And I think you're seeing the broad and vibrant relationship between the United States and Europe, and the expansive agenda that is being pursued between the United States and Europe. We are cooperating to open new opportunities for trade and investment; we addressed the twin challenges of energy security and climate change, while keeping our economy strong; to cooperate in widening the circle of development and prosperity; helping on challenges of disease and the need for greater educational benefits, especially in Africa; and of course cooperation between the United States and Europe on protecting our citizens from the threat of terror and other attacks.

The United States and Europe are working closely together, applying the tools of intelligence, finance, law enforcement, diplomacy, and when necessary, military power to break up terror networks and deny them safe havens. And the President will talk about this agenda in his comments in the speech tomorrow.

He will also make the point that ultimately the only way to defeat the advocates of the ideology of the terrorists is to defeat their ideas, and that therefore a central aim of our foreign policy is to advance a more hopeful and compelling vision especially in the broader Middle East. This vision is based on ideals of liberty, justice, tolerance, and hope, and he will point out that these are the same ideals that animated the American Declaration of Independence, and France's declaration of the rights of man.

These are, of course, ideals not unique to our nations. They are, in the President's view, universal ideals available to every man and woman. And the lesson of history is that extending these ideals is not simply a moral obligation, it is also the only practical and realistic way to protect the security of the United States and the security of Europe.

He will make the point that the rise of free and prosperous societies in the broader Middle East is essential to peace in the 21st century, just as the rise of a free and prosperous Europe was essential to the peace of the 20th century. And so he will call for Europe and the United States to stand with reformers, democratic leaders and millions of ordinary people across the Middle East who seek a future of hope, liberty and peace, whether in Afghanistan, Lebanon, the Holy Land, Iran and Syria and Iraq.

He will note that since 2001 the freedom movement has been advancing in the Middle East and he will call for what is needed, which is to help ensure that progress continues, and that the way to do that is by standing with civil society groups, human rights organizations, dissidents, independent journalists and bloggers, and others on the leading edge of reform.

The meetings today, the President had an opportunity to meet with President Napolitano. This was -- as Dana suggested, I believe, this was the third meeting he's had with the President. They have a very good, personal relationship. They had a meeting, a discussion of the issues, and that discussion continued then over lunch. The President expressed condolences for the six Italians that were lost in an industrial accident -- something that the President of Italy spoke about yesterday. They talked about and noted the strength of the Italian-American relationship, as indicated in part by the frequency of the President's visits here and the exchanges between the leaders of the two countries.

The President also expressed appreciation to Italy and the people of Italy for their support and help in Afghanistan, Iraq, Lebanon, Chad and elsewhere in Africa. The subjects were, as you might expect, discussions about the food crisis, oil prices, the Middle East, the challenge posed by Iran, the challenge posed by Syria, the importance of supporting Lebanon as it seeks to consolidate its democracy and ensure its sovereignty and independence.

And I'd be delighted to answer any questions. Deb. Read more Comment (0), Email this.

MR. HADLEY: That issue didn't come up. Neither of those issues came up specifically with President Napolitano. They have been, of course, the subject of discussions between the two countries. They may come up tomorrow. On both of them, the -- there is a group of countries that have been for the last three years leading the discussions with Iran, representatives from France, Germany, the United Kingdom, the United States, China and Russia. That group certainly has been in the lead, but it has in some sense been imbedded in a larger group of countries. As you know, one of the issues in terms of dealing with Iran is to increase pressure and increase sanctions. And that of course requires potentially action by the European Union, of which Italy is a part.

So Italy has been very much a part of the consultation process. There has been an issue of whether the core group of six should be expanded. It's an idea that has been raised. I think there will be more discussions about it. The President will want to obviously talk to various leaders about it. It came up in Germany, and I think it will come up again over the course of the trip. I think no decision has been made, and the President is aware that this has been an issue. And I'm sure it will be something that will be talked about.

I think the other thing, though, that will be emphasized is that all of us need now to focus even more intensely on the issue about Iran. They have clearly made progress in their enrichment program. As you know, the problem with their uranium enrichment program is that it is a route to giving Iran the indigenous capability to make the material for a nuclear weapon. It is a potential route for Iran to a nuclear weapon. I don't think anybody really thinks that's a good idea for stability in the Middle East, and it runs the risk of provoking something we have tried to avoid, working with Europe for decades, which is a nuclear arms race in the Middle East.

So there is room for all countries now to put a greater focus on Iran. I think you can see in the conversations that there's a greater appreciation of the risk, and all countries are going to need to do more.

There is a dual-track strategy, as you know. Mr. Solana, on behalf of the so-called EU3-plus-3, will be meeting with Iranian counterparts, putting on the table an enhanced offer to the Iranian regime, that if they will suspend their enrichment activities, there is the prospect for a series of diplomatic, economic, and other benefits that would benefit the Iranian people, including assurances of a peaceful civil nuclear program.

So that is one track, and we would hope that the regime would respond positively and let the Iranian people have the benefits of that package. But if they do not, I think there is an increasing recognition that there then needs to be an increase in sanctions and economic and diplomatic pressure on Iran. And if that offer is rejected, that's where, I think, the discussions will go -- and there's certainly an important role for Italy to play in that process.

Yes, sir. Read more Comment (0), Email this.

MR. HADLEY: As I said, it was raised with the President in Germany; it's something the Secretary of State has talked to the President about. One of the questions is, well, if you let in an additional country, who else wants to come in? And then it goes to the issue of, well, how big does the framework get? And it has been a group that has been useful to keep small; it's been fairly responsive. But as I say, not all the action is there, because that group of the so-called EU3-plus-3 is embedded in an ever larger set of circles that goes to the point, for example, of the IAEA, the International Atomic Energy Agency board of governors, which is 40 countries; it goes to the U.N. Security Council, which is 15 countries. So there are a lot of groups involved in this effort. Italy participates in those groups, is a very important member of a number of those groups. And of course, we have talked very intensively with Italy on this subject.

So the narrow issue of do you expand the EU3-plus-3 raises a lot of questions that need to be thought through, and at this point the President hasn't made up his mind. He's going to listen to his Italian colleagues here during this visit and listen to the leaders of the other countries during the course of this trip. Read more Comment (0), Email this.

Q And can you clarify something on the relationship between the incentive package and the sanctions?

MR. HADLEY: Well, as you know, this dual-track process is not new. This was really the process after 2003, when there was an active negotiation between the EU3 and Iran. There was actually an agreement called the Paris Accord in 2004, where the Iranians suspended enrichment. There was negotiation of a package of benefits that would help the Iranian people. And those negotiations were broken off by President Ahmadinejad when he was elected in the summer of 2005.

We've tried to resuscitate that effort, get both of these tracks moving. There's been a lot of effort and progress in sanctioning Iran. It was felt that what we needed now to do is to refresh the offer, if you will. And that's what Solana will do.

So I think we will get a reaction fairly quickly. The President Ahmadinejad has already ruled out acceptance of the package. We'll see what happens when Solana goes, but I think you've heard a number of countries are getting ready and doing the internal processes required, so that should that package be rejected -- and a number of people believe it will -- we are ready to go to continue the sanctions effort that has already been well along. As you know, there have been three U.N. Security Council resolutions. We've taken a lot of action. A number of European countries have also taken a lot of action.

Steven Lee. Read more Comment (0), Email this.

Q Follow up. Assuming they reject it ,s they signaled they would, when do you expect to see the next

MR. HADLEY: Well, we'll see. I mean, look, what we ought to do is we ought to -- you know, one of the things we want to make clear is that this is a genuine offer and we hope the Iranians accept it. So the more we're very visible about, well, we're going to get ready for this meeting and talk about moving forward on sanctions, I think our concern is that it would suggest to some -- Iranian people, for example -- that this was not a genuine offer and was not a genuine effort to resolve this issue in a positive way for both the Iranian people and for the international community.

It is a serious effort, and that's one of the reasons we have refreshed the offer. That's one of the reasons we want Solana to go, notwithstanding the comments that we've heard from President Ahmadinejad. Let him speak directly to the leaders of Iraq. He will have an opportunity to speak to the Majlis. Hopefully he will have opportunities to speak to the Iranian people. And let's see what impact that has. Let's let him go. Let's let him come back. We'll have an opportunity to see what he learns on that trip and to see what the response of the Iranian government is.

But at this point we want to make it clear to the Iranian people this is a genuine offer and a genuine way out for them that will provide a better life for the Iranian people if their regime will only let them take it. Read more Comment (0), Email this.

MR. HADLEY: Well, the President has given a number of speeches. I think there's no -- I think you'll find it's the kind of speech that could be given a number of places, but it's obviously particularly fitting to give it in Paris because, as you know from the history, France is our first and oldest ally and very helpful at the time of our own independence. And therefore it seemed a fitting place for the President to give this speech -- which, in addition to all the things I talked about, will also look back a little bit, using the opportunity of the 60th anniversary of the Marshall Plan to show and remind everyone in the United States and Europe how far the United States and Europe have come working together to build a Europe that is whole, free and at peace, and is economically prosperous, really rising out of the ashes of the Second World War.

Jennifer. Read more Comment (0), Email this.

Q I'm just trying to get my head around this sort of looking back and making an assessment now. If

MR. HADLEY: The President four years ago talked about the need for a new era in transatlantic relations. Why did he do that? Because after 9/11 it became clear that he had a lot of different challenges in terms of the war on terror, in terms of what we needed to do in Afghanistan in connection with that war on terror to make sure Afghanistan never again became a safe haven for the terrorists.

We saw the challenge faced in the Middle East, for example, more generally about how the lack of freedom and democracy and hope in the Middle East gave rise to a condition that resulted in terrorists striking the American homeland and also striking in Europe. And that, of course, made it important not only for the propagation of our general commitment to freedom and democracy, but also for our own security to engage those issues in the Middle East -- both through the United States and Europe. And that is why we're so concerned and working together on Iraq, why we're concerned about Iran, why we're trying to support Lebanon, why we're encouraged -- why it is so important to try and find a Middle East peace.

So I think what the President four years ago, looking out and said, there's a whole new set of challenges that threaten both the United States and Europe that can only be confronted effectively if we do it together; and that is going to require Europe to focus not just within Europe, but to focus outside of itself, in terms of its policies and actually in terms of its deployments of its forces.

So what the President I think is doing is a little bit of a stock-taking four years later. How have we done in forging this new era of transatlantic relations in working together to address these new challenges? And I think as you can see from the press briefings that these leaders have had, we're doing pretty well. Huge challenges remain, but we are working together. We have a common, I think, approach on most of these issues. So it's kind of a progress report four years after.

And I think the other thing that he wants to do in this speech is to remind everybody that the freedom agenda is a challenging agenda; helping countries recover from conflict and from challenge, particularly states that are trying to build their democratic institutions while under pressure from the terrorists is a challenging job; just like the reconstruction of Europe after World War II was a challenging job. And it takes a long time.

But we can be confident in success. We did it before, together, after World War II in Europe. The President believes we can do it again in the Middle East as a way of dealing with that challenge, because if we are true to our principles, if we hold fast the principles of liberty and democracy and freedom that are the ideologies that will win over the terrorists, and if you make a commitment to the kind of sustained engagement that we need to do -- and it's going to be a challenge. It's going to require resources and commitment, and his speech tomorrow will be a call for both. Read more Comment (0), Email this.

MR. HADLEY: I don't think that -- it's quite the contrary. If you listen to what he's saying, he's saying the United States and Europe together succeeded. And we have a Europe whole, free and at peace. That's the message. It is not that they need to be rescued again, it is that Europe has succeeded in a Europe whole and free and at peace, a Europe that increasingly is confident and is increasingly taking a leadership role in the world. And what he's saying is, we celebrate that, we want a strong Europe, we want a strong EU -- not only because it's good for Europe, but because we need a strong partner to deal with the common challenges that this time are outside Europe that threaten both the United States and Europe. That's his message.

Sir. Read more Comment (0), Email this.

MR. HADLEY: Yes. Read more Comment (0), Email this.

MR. HADLEY: Well, one of the things that the President talked about in his speech at the Naval Academy and his speech at the U.S. Institute of Peace is he made that contrast; that because of the level of destruction and all the rest, and the way World War II ended, we went -- I remind you, the war ended in '45 and there were a lot of editorial commentary that the post-war effort in Europe was floundering, and that we were not building the institutions of a democratic society that would lead to a prosperous Europe and a peaceful Europe.

And the Marshall Plan was announced in '48, really got underway in '49. It was an effort to focus security having been brought on the need for reconstruction development. One of the things the President said at his Naval Academy speech and the U.S. Institute of Peace speech is, this is different. We now -- the challenge of the 21st century is going to be states that are under siege, under siege because they are either emerging from conflict or because they are under pressure from international networks of terrorists, drug traffickers, organized crime -- that puts great pressure, and you can see this in Latin America. Look at Central America -- the pressure they are under from drug traffickers and terrorists who have resources, weapons and money that actually outstrips the resources of those individual countries to deal with that problem.

That's why we've talked about the Merida Initiative, which is so important for Congress to fund, which is a regional approach for Central America, with Mexico and the United States, to deal with these challenges. The problem is there are transnational challenges that are pressing on states that are under siege that do not have the kind of strong democratic institutions that they need to deal with it. That's what you see in Afghanistan, Iraq, Colombia, Central America.

And the challenge for the 21st century is finding ways to bring security to these countries and build these institutions, because we all know that while the first step is to bring security to -- security over the long term, it will only occur when there are democratic institutions and prosperity and reconstruction that gives the people in the country an alternative to the terrorists.

So it is a -- it is similar in this respect: It's a huge challenge; it's going to require a major commitment of resources; it's going to require us to work closely together with the Europeans; and it's going to require us to rely once again on the power of freedom and liberty -- those ideals we talked about. But it is different in the sense that in some sense it's harder because we're going to have to help strengthen these governments while they are under siege and under fire, if you will. And that's a big challenge. Read more Comment (0), Email this.

MR. HADLEY: Sir. Read more Comment (0), Email this.

Q I beg your pardon if I go back to the 5-plus-1 issue, because according to some Italian officials,

MR. HADLEY: It came up in the discussions with Chancellor Merkel. It will probably come up in the other discussions. I think it will probably come up tomorrow. And as I said, the President is listening to the arguments. There are some questions of the sort that I described before, and the President is in a listening mode.

But I think the bottom line is Italy is very much a partner in this effort with dealing with Iran, and Italy has -- very much has responsibilities in dealing with it. As you know, Italy has a very robust set of commercial relations with Iran. This is always a problem for countries when their commercial ties sometimes seem to be at variance with their national security requirements.

And the message that the President is taking to all countries in Europe is, this is a real threat to the security of the Middle East and potentially to the security of Europe -- the prospect of Iran with nuclear weapons. And we all need to make the tough decisions to, in some sense, look past our commercial ties and put the kind of pressure on Iran that is going to be required if they're going to make it -- are willing to make a strategic decision to stop their enrichment programs, suspend their enrichment, come to the table, and negotiate.

It is going to require us to make some tough decisions that are contrary to commercial interests. This is an issue that the President is going to be talking about at every stop. This is something that all of us are going to have to do together if it's going to succeed, and Italy is going to have a very important role in that.

Yes, sir. Read more Comment (0), Email this.

MR. HADLEY: Right. Read more Comment (0), Email this.

Q So it is exactly for that that Italy wants to play an active role within the 3-plus-3. And it seems

MR. HADLEY: You know, we generally -- Read more Comment (0), Email this.

MR. HADLEY: -- we generally don't get into the details of the conversation. I think it's right to say that the President's mind is open. And I think, you know, the first issue is, do we have an understanding with all the key countries that this is the path we're on, this two-track strategy? And if Iran rejects -- the Iran regime, rejects this offer that Solana will take, then we have to be willing to make some hard decisions, even though they go against the commercial interest.

That's the issue. That's the strategy question. We can deal with the process issues. But I think the President is going to be focusing first and foremost on, do we have a common commitment to the strategy to make the hard decisions, and then he will be listening on these process issues. That's really all I've got to say on that issue.

Yes, sir. Read more Comment (0), Email this.

MR. HADLEY: That's really all I've got to say on that issue. Read more Comment (0), Email this.

MR. HADLEY: Sir. Read more Comment (0), Email this.

Q Two questions on Afghanistan, the Donors conference. First, why is it the First Lady that's representing

MR. HADLEY: The First Lady and the Secretary of State represented the United States there. Secretary of State, because that's, of course -- it's a ministerial-level meeting; it's appropriate for her to be there. And the First Lady offered to go, and the President and all of us thought it was a great idea, because she has been very active in Afghanistan, committed to the policy of helping Afghanistan -- particularly women in Afghanistan -- take advantage of the opportunity that is there for them; she's been very articulate about that. And we just thought it was terrific that she would be willing to share her views and speak on behalf of the country.

Second, we think we are making some progress on the security end, you know, and I won't go through that. You know what came out of Bucharest. One of the things that was particularly helpful is France has decided to increase its role; put a additional battalion of combat corps into the east, which is going to allow us to move some forces into the south. There have been other increases that have been made.

There's a lot more to do, there's no doubt about it. We've got to do more to support the Afghans. The Afghans need to do more. And one of the questions that is being discussed is, do we need to expand the Afghan army, which is now projected to go to 80,000 -- do we need to look at something more like 120,000?

Another thing that is going to be talked about on the security side is to do more, in terms of police training. And some countries have stepped up to that.

So we think that we have made some progress on the security side. We need to do more. I think we will make some progress on the economic side. But we have to recognize that we're in this for the long haul. This is going to be a commitment that is going to require us to be steadfast and committed and to work this problem over a number of years. There's going to be no quick victory here.

Bill. Read more Comment (0), Email this.

MR. HADLEY: There have been conversations. Our Ambassador, Ambassador Patterson, has met with Pakistan's foreign secretary to discuss the incident. You know, one of the problems is that it is still not exactly clear what happened. What we believe is that there was an operation on the Afghan side of the border by anti-coalition forces that threatened our people; that those forces went back into Pakistan, and that we tracked and struck those forces. That's what we believe happened. There have been reports in the press and there have been clearly claims by Pakistani authorities that in that process, Pakistani military forces -- individuals in service were killed.

Quite frankly, at this point we have not been able to corroborate that. Should it be true, obviously we would be very saddened by that loss. Pakistan has been an important ally and will continue, we hope, to be an important ally in the war on terror, and we want to help this new democratic government in Pakistan. But at this point, we're still trying to get to the bottom of what happened. And the reports, quite frankly, even from sources within the U.S. government, are conflicting at this point. I've got nothing new for you.

Yes. Yes, ma'am. Read more Comment (0), Email this.

MR. HADLEY: I'm sorry? Read more Comment (0), Email this.

MR. HADLEY: You know, this is an idea that has kind of sprung on the international scene, and of course the President's first question is, what are we going to try to accomplish? Because if you're going to have a meeting like that, there's obviously going to be great expectations that something will come of it that will have an impact on oil prices to reduce them and stabilize markets. So there are expectations that have been generated, and it is important that those expectations not be unrealized, because that in itself will have an effect on oil prices in the market. So one of the things the President has asked is our folks back in Washington to start looking at what we might try to accomplish. We will be actively engaged with the sponsors to try and develop a plan and a set of outcomes that might come from that meeting.

At this point, that work is very preliminary. The President has an opportunity to discuss this with his fellow leaders during this trip. He will then go back to Washington and take stock about how the summit -- how the meeting is shaping out, what might be able to be accomplished, and at that point make some decision about who are the appropriate representatives of the United States.

Sir. Read more Comment (0), Email this.

MR. HADLEY: Well, at this point, you know, we're still trying to figure out what it is and what can be accomplished. You know, if you know the President, the first question is, what's the meeting going to do, what's our strategy to get a good outcome, and we'll make kind of form follow function at that point, who's the best -- what's the best delegation to send to represent the United States. And that's where we are at this point. Read more Comment (0), Email this.