SECRETARY GENERAL ANNAN: Good afternoon, ladies and gentlemen. Thank you for waiting.

Let me now read you what the Quartet has agreed:

We reaffirm our commitment to our shared vision of two states living side by side in peace and security. One of those states will be Israel and the other a viable, democratic, sovereign and contiguous Palestine.

We call on both parties to take steps to fulfill their obligations under the roadmap, as called for in Security Council Resolution 1515 and in our previous statements, and to meet the commitments they made at the Red Sea summits in Aqaba and Sharm el-Sheikh.

In that context, we welcome the Israeli Government's recent reaffirmation of its readiness to implement certain obligations under the roadmap, including progress towards a freeze on settlement activity. We urge the Israeli Government to implement these commitments and to fully meet its roadmap obligations.

We view the present situation in the Middle East with great concern. We condemn the continuing terror attacks on Israel and call on the Palestinian Authority to take immediate action against terrorist groups and individuals who plan and execute such attacks.

While recognizing Israel's legitimate right to self-defense in the face of terrorist attacks against its citizens within the parameters of international humanitarian law, we call on the Government of Israel to exert maximum efforts to avoid civilian casualties.

We also call on the Government of Israel to take all possible steps now, consistent with Israel's legitimate security needs, to ease the humanitarian and economic plight of the Palestinian people, including increasing freedom of movement for people and groups, both within and from the West Bank and Gaza, removing checkpoints and other steps to respect the dignity of the Palestinian people and improve their quality of life.

The Government of Israel should take no actions undermining trust, such as deportation, attacks on civilians, confiscation and/or demolition of Palestinian homes and property, and other measures specified in the Tenet work plan.

The Quartet calls for renewed efforts to reach a comprehensive ceasefire, as a step towards dismantlement of terrorist capabilities and infrastructure and renewed progress towards peace through implementation of the roadmap.

We note the Government of Israel's pledge that the barrier is a security rather than political barrier and should be temporary rather than permanent. We continue to note with great concern the actual and proposed route of the barrier, particularly as it result in confiscation of Palestinian land, cuts off the movement of people and groups, and undermines Palestinians' trust in the roadmap process by appearing to prejudge the final borders of the future Palestinian state.

We took positive note of Prime Minister Sharon's announced intention to withdraw from all Gaza settlements and parts of the West Bank. This should provide a rare moment of opportunity in the search for peace in the Middle East. This initiative, which must lead to a full Israeli withdrawal and complete end of occupation in Gaza, can be a step towards achieving the two-state vision and could restart progress on the roadmap.

We further note that any unilateral initiatives of the Government of Israel should be undertaken in a manner consistent with the roadmap and with the two-state vision that underlies the roadmap.

We reaffirm President Bush's June 24, 2002 call for an end to the Israeli occupation that began in 1967 through a settlement negotiated between the parties.

We also note that no party should take unilateral actions that seek to predetermine issues that can only be resolved through negotiation and agreement between the two parties. Any final settlements on issues such as borders and refugees must be mutually agreed to by Israelis and Palestinians based on Security Council Resolutions 242, 338, 1397 and 1515; the terms of reference of the Madrid Peace Process, previous agreements; and the initiative of Saudi Crown Prince Abdullah endorsed by the Beirut Arab League Summit. It must also be consistent with the roadmap.

We have agreed to undertake the following steps, with appropriate mechanisms established to monitor progress and performance by all sides.

-First, we will act on an urgent basis, in conjunction with the World Bank and the UN Special Coordinator and the Ad Hoc Liaison Committee on the basis of a World Bank/UNSCO Rapid Assessment Study, to ensure that Palestinian humanitarian needs are met, Palestinian infrastructure is restored and developed, and economic activity is reinvigorated.

-Two, we are prepared to engage with a responsible and accountable Palestinian leadership committed to reform and security performance. The Quartet members will undertake to oversee and monitor progress on these fronts.

-Three, we will need to ensure that -- we will seek to ensure that arrangements are put in place to ensure security for Palestinians and Israelis, as well as freedom of movement and greater mobility and access for Palestinians. We underscore the need for agreed transparent arrangements with all sides on access, mobility and safety for international organizations and for bilateral donors and their personnel.

As Israel withdraws, custody of Israeli-built infrastructure and land evacuated by Israel should be transferred through an appropriate mechanism to a reorganized Palestinian Authority which, in coordination with representatives of the Palestinian civil society, the Quartet and other representatives of the international community, will, as quickly as possible, determine equitable and transparent arrangements for the ultimate disposition of these areas.

-Four, effective security arrangements continue to be critical to any possibility of progress. Palestinian security services should be restructured and retrained consistent with the roadmap to provide law and order and security to the Palestinians and to end terror attacks against Israel.

Finally, we reaffirm our commitment to a just, comprehensive and lasting settlement to the Arab-Israel conflict, based on Resolutions 242 and 338. We remind all parties of the need to take into account the long-term consequences of their actions and of their obligation to make rapid progress towards resumption of a political dialogue.

An appropriate coordinating and oversight mechanism will be established under the Quartet's authority. We call on all states in the region to assert every effort to promote peace and to combat terrorism.

Thank you very much, and we will now take your questions.

Ms.DERGHAM: The first one goes to Tony Jenkins of Expresso, Portugal.

QUESTION: My question is to Secretary Powell.
Sir, what is the purpose of this group when George Bush and Ariel Sharon are making deals on their own that seem to have rendered much of the work of this group irrelevant?

SECRETARY POWELL: I don't think that the exchange of letters between Prime Minister Sharon and President Bush has done any such thing. If you look carefully at the exchange of letters and statements of President Bush and Prime Minister Sharon, you'll see a commitment to not prejudging final status issues; you will see a commitment to final status issues being resolved by agreement between the two parties; you will see a commitment to 242, 338 and the other relevant resolutions; you will see a commitment to the roadmap process.
Nothing anticipated doing, as we go forward, will be inconsistent with the roadmap. So if you read carefully what the President said, and what he put into the letter to Prime Minister Sharon, you will see that it is all consistent with what we are doing here today. And, in fact, what we have done here today is note the new opportunity that exists for progress in the Middle East because, for the first time, we have an Israeli Prime Minister who has stood up and said that he wants to evacuate the settlements: 21 in the West Bank -- excuse me, 21 in Gaza and 4 in the West Bank.

Now, Mr. Sharon had a setback, obviously, with the Likud Party the other day, but he continues to say that is his goal, to go forward with evacuations, and he's examining how best to do that. And I take note that all polling suggests that the majority of Israeli citizens would like to see a movement in this direction. In the process of discussing this matter with the Israelis, the President and the Prime Minister took into account certain realities that we believed were appropriate to be taken into account with respect to right of return and with respect to alignment of the armistice lines that might be appropriate.

Previous negotiations knew that these features would have to be taken into account, these realities would have to be taken into account, and any future negotiations would have to take them into account. And the President made it explicit.

I think what we have to look at now is how to move forward, and that's what the Quartet was focused on today: how to take advantage of this new opportunity of the evacuation of settlements, as opposed to just relying on the statements of the past, but something that can actually occur -- the evacuation of settlements -- and how we can get the Palestinians ready to take advantage of this opportunity and to get back into the roadmap, get back on the path to peace.

Ms.DERGHAM: Thank you. I'd like us to stay on the subject of the Middle East initially. We'll go to other subjects later.
Barry Schweid, Associated Press, Washington.

QUESTION: (Inaudible) Palestinian Authority, or do you just mean a strengthened security force? Do you favor reorganizing the leadership of the Palestinian Authority, so there will be a chance to come to terms with Israel?

SECRETARY GENERAL ANNAN: Basically, yes, security was part of it, but we didn't focus just on security. In the past, when we talked about the reform of the Palestinian Authority, we had also talked about empowered Prime Minister working with the international community and reform of the security sector. Quite a lot of work has been done with the Palestinians, particularly by the European Union, on the economic and financial area, also with the World Bank and IMF involved. So we are looking at this whole set of reforms that will give us -- will give the Palestinians capacity and will have a counter -- a government or an authority on the other side that can take on these responsibilities with full capability.

Ms.DERGHAM: Raghida Dergham, Al-Hayat, New York.

QUESTION: Yes, a follow-up to this question, please. What do you mean by appropriate mechanism when you're saying that you have not determined once Israeli withdraws from certain areas to whom it will be transferred?

And, Mr. Secretary Powell, why is it difficult for you to give the King of Jordan, King Abdallah, a letter of assurances, which is really not asking very -- for much, although you have given such a letter to Prime Minister Sharon? Aren't you undermining his efforts? And did he commit to come to the United States regardless, if you give him the letter or not?

SECRETARY GENERAL ANNAN: On your first question, let me say that we are dealing with an evolving situation. As Secretary Powell indicated, the Likud Party voted against the plan. The Prime Minister has reaffirmed his intention to go ahead. We are monitoring it and we are waiting to see how things evolve and then adapt our plans or mechanisms accordingly.

And so this is why we didn't come up and say, "This is what we are going to do." We need to see how the situation evolves.

Thank you.

SECRETARY POWELL: Well, I think I -- yeah, the only thing I would say is that Jordanian officials are in Washington today, and we're discussing this situation with them and looking over various language that might be used. But I will just let those discussions take place among our officials in Washington and leave it at that for the moment because I've been here for the last couple of hours.

Ms.DERGHAM: Benny Avni, Israel Radio, New York.

QUESTION: My question also has to do with that reorganization plan. There's an effort in the World Bank to raise funds for the Palestinians. My question: Is this a condition? And is it more involvement of the international community with the Palestinian economy? And aren't we risking turning it into an Oil-for-Food-type program?

SECRETARY GENERAL ANNAN: I think the World Bank has already been involved in the situation for quite some time. As I indicated, there's been quite a lot of assistance to the Palestinian Authority.
And, of course, when we talk about Palestinians fulfilling certain obligations and taking on certain action, they need to have the capacity, they need to be able to organize their society and move ahead. We cannot let the economic and humanitarian situation wait till some other day. Whenever we can strengthen their capacity and improve the economic and humanitarian situation, I think it should be done.

Ms.DERGHAM: Conor O'Clery, Irish Times, Dublin. Conor O'Cleary.

QUESTION: I'd like to ask the Russian and Irish Foreign Ministers what their impressions are. Is the roadmap back on track after this meeting today?

FOREIGN MINISTER LAVROV: Thank you. I think that the roadmap never disappeared in terms of our moving forward, and today's statement by the Quartet, which has just been cited by the Secretary General, confirms definitely that this is the only unified position, the one unified position, of the Quartet.

FOREIGN MINISTER COWEN: Well, in answer, Conor, I think (inaudible) meeting of the Quartet at a time when hope is in short supply. But the Quartet has reaffirmed its commitment to a comprehensive, inclusive settlement negotiated between the parties and the support for a two-state solution and for the roadmap as a means of achieving this.

The final status issues, such as frontiers and refugees, can only be decided by agreement between the parties themselves, and there's an important reassurance that a settlement will not be imposed. We have identified a number of obstacles to progress on which we believe immediate action is necessary, including violence and terrorism, Israeli settlement activity, the route of the separation barrier, and we're agreed that a full Israeli withdrawal from Gaza could mark an important step towards implementation of the roadmap and the realization of a Palestinian state.

The Quartet is ready to provide support in bringing that about, and we're looking for the support for the international community in reaffirming our commitment to such an outcome.

Ms.DERGHAM: Dmitry Gorokhov, ITAR-TASS Moscow.

QUESTION: A question for Minister Lavrov. Russia was the initiator of this meeting?

FOREIGN MINISTER LAVROV: Yes, the Quartet members were interested in this meeting taking place as soon as possible, and so I would call it a collective initiative, but we did actively call for this type of meeting to take place.

The focus, I would say, and what just has been noted by the Secretary General, the Quartet has maintained its position and I would say has consolidated its position, as was already stated. We agreed to set up a monitoring and oversight situation to see how each one of the parties will deal with and comply with their roadmap obligations and the steps that they have promised to undertake and which they signed to undertake.

It's very important, in particular, not only to reaffirm the roadmap and all the Security Council resolutions and all the agreements that the parties have entered into as a basis for a Middle East settlement, but it's also necessary to achieve this settlement only through negotiations, including, of course, all final status issues. So I think that just that alone emphasizes the importance of today's meeting. And I would add that the Quartet says that any unilateral steps take have to be in line with all the undertakings under the roadmap, and the Quartet will facilitate the parties doing this through the oversight mechanisms I've alluded to and will ask the donors to provide assistance in reform to the Palestinian Authority and so that Palestinians themselves will be able to deal with their land.

Ms.DERGHAM: Glenn Kessler, Washington Post, Washington. Glenn Kessler.

QUESTION: Mr. Secretary, laying aside the question of a letter for the King of Jordan, there is a perception in the Arab world that President Bush gave away two of the best bargaining chips the Palestinians had when he gave his letter to Sharon. Why is the Administration resistant to the idea of making a balancing statement that would recognize concessions the Palestinians might receive from the Israelis?

And I'm also interested to see if the other parties up there are interested in -- whether they think such a statement would be appropriate at this time.

SECRETARY POWELL: We are in conversation with Arab leaders, with King Abdallah and his associates, President Mubarak and his colleagues. We are in contact with Prime Minister Abu Alaa. I spoke to him last week explaining our position. And I think that the statement we have issued today on behalf of the Quartet, consisting of the European Union, the United States, the United Nations and the Russian Federation, I think is some assurance to the Arab world and to the whole world that we are committed to the basis upon which the peace process rests. That's the appropriate UN resolutions.

We are committed to the parties agreeing amongst themselves on final status issues and not having those final status issues opposed. So, to some extent, I think we've put out a statement here that should provide that sort of assurance to the Arab world and to Palestinians. And we are in conversation with our other Arab friends to see what assurances and comments they may need from us to make sure that they know that the President has not abandoned them, has not abandoned the hope for the creation of a Palestinian state. He has not abandoned the vision that he laid out in June of 2002. But where were we going with that vision? Where were we going with this process? Now where were we a few weeks ago?

We were still hoping for something to break, something to come into the equation that would change the equation and give us something to work with. We now have that with the stated intention of Prime Minister Sharon and with the clear support of the Israeli people to move in this direction. And this gives us something to work with, and we're trying to take advantage of that opportunity. That's what the Quartet has done here today. That's what President Bush did a few weeks ago, by embracing what Prime Minister Sharon stated was his intention. And so this is the time for us to look at the opportunity that has been presented, rather than to get into arguments that don't take us anywhere. This takes us somewhere.

If we seize this opportunity and work with the parties, we'll get back onto the roadmap, both sides will be expected to meet their obligations under the roadmap and settlements will be evacuated. Settlements will be gone from Israeli occupation and that settlement property will be converted to constructive use on the part of the Palestinian people who will be free to move about these areas and build a society for themselves, a civil society, political infrastructure, a security force that will protect them and also keep terrorists from taking advantage of this freedom that the Palestinian people will have.

And so we view this as an opportunity to be seized. That's what the Quartet said today, and I think a statement that we put out today should be read that way by our friends and colleagues in the Arab world.

Ms.DERGHAM: Talal Al-Haj, Al-Arabiya, Washington Bureau.

QUESTION: And my question is to the Secretary General first. It's a simple question, sir.

Does the announcement of President Bush during the Sharon conference and the letters exchanged between the two leaders live to the letter and spirit of 242, 338, and especially, 194, the right of return?

And my question to you, to Secretary Powell: President Bush went to war to uphold the United Nations resolutions in Iraq; 194 preserved the right of the return for the Palestinians; 338 and 242 also speaks about the armistice line of 1949. Wasn't it the right podium to change these rules of the game here in the United Nations, the Security Council, instead of bilateral letters between the two leaders and through press conferences?

SECRETARY GENERAL ANNAN: I think on the -- on your first question, let me say that the Quartet, which includes the U.S., today has reaffirmed again the basis for the peace process, including the resolution you have cited, 242, 338. And we also refer to the Arab initiative of Crown Prince Abdullah, which was endorsed by the Arab League. And so the basis for moving forward and the land-for-peace is clear and accepted by all of us. And you heard Secretary Powell indicating that that is a basis that we are all moving forward, including Washington.

SECRETARY POWELL: 194, 242, 338, 1397, 1551, all well known to us, and we understand that the parties themselves have to mutually agree between them before any of these issues are settled in final status negotiations. That's what the President's exchange of letters with Prime Minister Sharon says. In every paragraph, that is reaffirmed. So we believe we are operating on this solid basis.

The President also said -- and this gets to the heart of your question -- that we have to consider certain realities on the ground. The parties have to consider them as they go into final status discussions. But, ultimately, all of the issues that you touch on are matters to be resolved between the parties themselves and we did not prejudge. We made a statement that what we believed was appropriate, what might have to happen in order to get to final settlement. But ultimately, final settlement is something to be resolved between the two parties themselves in negotiation with each other, with the assistance of the international community in a manner consistent with the roadmap, and the Quartet stands ready to assist in this process.

Ms.DERGHAM: Leopold. Reuters. New York.

QUESTION: Secretary Powell, the Prime Minister of Israel is revising plans because of the Likud vote. Would the U.S. endorse a partial withdrawal?

And I have another question for the Secretary General and for Minister Lavrov and Solana.

The last time we sat here, you talked about "bold moves were necessary by the international community." Do you consider Sharon's move the bold one, or do you have something else up your sleeve?

SECRETARY POWELL: Since I don't know what Prime Minister Sharon might do, all I've seen is press reporting of potential modifications, let's wait and see what he does, rather than give a speculative answer to a hypothetical possibility.

SECRETARY GENERAL ANNAN: Javier, do you want to say something?

HIGH REPRESENTATIVE SOLANA: (Inaudible.)

SECRETARY GENERAL ANNAN: Okay. No, I think on your second question, let me say that when you look at the communiqué we issued today, we are taking initiatives and saying things we have not done before.

I have also had a chance to say in this building, when I was asked if the roadmap was dead, that it may have been in distress, but it wasn't dead. And today I think we are -- you have seen the effort by the members of the Quartet to push ahead with the process and work with the parties to honor their commitments and obligations they undertook, and help them implement the agreement.

But as --

HIGH REPRESENTATIVE SOLANA: Let me say that once the document is in your possession, you can read it. I'm sure you will agree with me on one issue. This document is a very important document that states in a very clear manner that the objective of the Quartet and the objective of the roadmap is to end the occupation that started in 1967 through the construction of two states: Palestinian state and Israeli state. That is the essence of the document. But on top of that, it put forward some mechanisms to achieve that goal, mechanisms in which, as Secretary Powell and Secretary Annan have said, go through also the mechanism stated by Prime Minister Sharon of withdrawal from Gaza.

We said very clearly that that withdrawal has to be total. It has to be the end of the occupation in that territory. And I think it's a very important document, the one we have achieved here today among the Quartet, got put recorded again at the center of gravity of the peace process.

FOREIGN MINISTER LAVROV: (Via Interpreter) If could add that we are actually looking at the stated intentions of Israel to leave Gaza as a very important step that with -- if it's done, would begin the process which for a long time was at a standstill. It's an important step, but it is an initial step for a comprehensive settlement to end the occupation and to fully meet all the obligations of the roadmap. That's the general position of the roadmap of the Quartet. And so I subscribe to it.

Whether it's bold or not bold, that's up to the journalists to use their discretion.

Ms.DERGHAM: Last question, Elise Labott, CNN, Washington.

QUESTION: This question is for Secretary Powell, but if other members of the panel could address it, I think we've covered the Quartet meeting in great depth.

If I could move over to Iraq, this is on the issue of the international backlash over the prison abuse photos, which you, yourself, have called despicable. It seems that there's great international outrage over this. Your Department has put out Warden Messages for Americans abroad on possible threats against Americans for the backlash, and I'd like to refer you to a report prepared by your Department Bureau of Intelligence and Research suggesting that this could affect U.S. standing abroad in foreign policy.

How are you going to counter this, and are you afraid that this is going to complicate efforts in the diplomatic world? And also, do you think this could affect how any future Iraqi government could trust the U.S. in the future?

Thank you.

SECRETARY POWELL: The photos that we all saw last week and into this week stunned every American. It was shocking. They showed acts that are despicable. The President has spoken to this. It's totally out of character of what we expect from our men and women in uniform. What they did was illegal, against all regulations, against all standards. It was immoral.

When our military commanders learned of what happened, within a day or so, they had launched investigations. Those investigations produced results as to who might have been responsible rather quickly.

Secretary Rumsfeld has now launched additional investigations. We'll deal with the training of our troops, the accountability of our commanders, and we'll get to the bottom of this.

Yes, I'm deeply concerned at the horrible image this has sent around the world, but at the same time, I want to remind the world that it was a small number of troops who acted in an illegal, improper manner. We will let the military justice system, that I have nothing to do with and it is another Department -- and the reason I say that because ultimate legality will have to be determined by the Department of Defense.

But it's just a few number of troops. When you compare that to the tens of thousands, hundreds of thousands of young men and women who have served in Iraq and who've served around the world, and not just in its current period but in the past, who have come to build, build hospitals and schools and restore civil society and rebuild devastated nations in Europe and Asia, and who are doing likewise in Afghanistan today, and I know also doing it in Iraq. These wonderful young men and women are distressed that some of their fellow soldiers acted in this manner.

The one thing you can be sure of is that justice will be done. We are a nation of justice. These sorts of actions are not tolerated, and these individuals will be brought into our military justice system and will be dealt with in a way that the world can observe and watch. And I can assure you that no stone will be left unturned to make sure that justice is done and to make sure that nothing like this ever happens again.

Ms.DERGHAM: Thank you very much, ladies and gentlemen. I'd remind you to stay in your seats for another moment. And you will find copies of the Quartet statements at the exits of the room on each side.

Thank you.