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U.S. Department of State
96/10/25 Daily Press Briefing
Office of the Spokesman



                           U.S. DEPARTMENT OF STATE
                             DAILY PRESS BRIEFING
                                  I N D E X
                           Friday, October 25, l996

                                    Briefer:  Nicholas Burns


ANNOUNCEMENTS
  Deputy Sec State Talbott's Speech (10/29) at Columbia Univ...  1
  Meeting of U.S.-China Joint Commission on Science and 
    Technology................................................   1
  U.S. Delegation In Azerbaijan................................  1
  Meeting of Three Presidents and Special Group of the 
    Federation in Sarajevo....................................   1-3
  Secretary Christopher's Speech at West Point.................  3-5

CUBA
  Cuban Hijacker Pupo Charged in U.S. Court....................  5-6
  Connection of Convicted Drug Kingpin to Govt. of Cuba........  26-27

UNITED NATIONS
  Denmark's Challenge to Replace U.S. Head of UNDP.............  7-8
  French President Chirac's Comments on new UN Secretary General
    Speaking French...........................................   21

FORMER YUGOSLAVIA
  Delay of Military Equipment for Train & Equip................  8-9

IRAQ
  Ceasefire in Northern Iraq...................................  9
  U.S. Policy on Turkomans in N. Iraq..........................  9-10

NORTH KOREA
  U.S.-North Korea Diplomatic Meeting in New York..............  10-13
  Update on Jailed AmCit Hunziker..............................  10
  Update on Status of KEDO.....................................  13

PEACE PROCESS
  Progress in the Israeli-Palestinian Talks ...................  13-14
  Possibility of Netanyahu-Arafat Meeting......................  14
  U.S. Reaction to President Chirac's Call for French 
    Participation in Peace Talks..............................   17-21
  U.S. Financial Contributions to Palestinian Authority........  18-19
  Chief Negotiator Erekat's Comments About Dennis Ross.........  19-20

IRAN
  Amb. Pelletreau's Comments/U.S. Policy on Opening Diplomatic
    Dialogue with the Government of Iran......................   14-16
  Possible Topics in a U.S.-Iran Dialogue......................  16-17

NATO
  NATO Expansion and U.S.-Russia Relations.....................  21-22, 
24
  NATO Expansion and the Baltic States.........................  22-23
  NATO Expansion and Eastern and Central Europe................  24-25

RUSSIA
  Shortage of Funds for Russian Army...........................  23-24
  Suspended IMF Meeting on Loans...............................  25-26


U.S. DEPARTMENT OF STATE
DAILY PRESS BRIEFING

DPB #173

FRIDAY, OCTOBER 25, 1996, 1:12 P. M.
(ON THE RECORD UNLESS OTHERWISE NOTED)

MR. BURNS: A couple of things for you. First, I wanted to let you know that Deputy Secretary of State Strobe Talbott will be giving an important speech on Tuesday, October 29, in New York City at Columbia University. This is at the 50th anniversary celebration of the Harriman Institute, and his speech will be on the future of United States-Russian relations. That's at 4:30 p.m. in New York City at the Harriman Institute at Colombia University.

I also want to let you know that today in the Department we are hosting the seventh meeting of the U.S.-China Joint Commission on Science and Technology. This joint commission is chaired by Assistant to the President for Science and Technology Dr. Jack Gibbons and by his counterpart, the Chinese Science Minister, Mr. Song Jian.

This meeting is held every two years to review science and technology cooperation in our relationship. You are all cordially invited to a press conference at 4:00 p.m. today in the Loy Henderson Conference Room, just around the corner from here, where Dr. Gibbons and Minister Song Jian will speak to you about their accomplishments in this joint commission.

You've asked in the last couple of days about a trip by a U.S. delegation to Azerbaijan. I can confirm that Mr. Jan Kalicki, who is the Counselor to the Secretary of Commerce, is presently in Azerbaijan on a mission exploring investment opportunities in the region. I understand he'll be visiting Armenia and Georgia as well as Azerbaijan.

Now to two major matters. I wanted to let you know that it's a pretty good day today in Bosnia, because, as you know, we think that events are moving in the right direction in Bosnia, and we think that American policy has been successful. We've talked about that here in this briefing this week.

But today the three Presidents met in Lukavica, which is a Serb suburb in Sarajevo inside the municipal boundaries of Sarajevo. The meeting has just concluded, and I understand it was actually a real success, an excellent meeting.

President Izetbegovic, Mr. Krajisnik and Mr. Zubak all met. They were talking about creating the institutions of the new state, particularly nominating people for the Council of Ministers. They agreed to meet again on Tuesday at the National Museum in Sarajevo.

I also want to correct a report in one of our major papers, published here in Washington, D.C. -- which is not the Washington Post - - and that is a report this morning that somehow Mr. Krajisnik had not taken the oath of office. He took the oath of office several days ago in the presence of John Kornblum, several days ago at the National Library. He has taken the oath of office. He has sworn to defend and uphold the united Bosnia and Herzegovina that has been created by the Dayton accords.

I think today's meeting is further contradiction to the erroneous report that appeared today in this major newspaper here in Washington, D.C. It's important that we remember what the facts are, and the facts are that the Bosnian Serbs have now signed on in a very meaningful way to these accords.

Further to that, there is a meeting of the Federation today in Sarajevo. The Special Group met. The Special Group was set up at the instigation of Secretary of State Christopher in his mid-August trip to Geneva, when he had his compliance summit review conference with all the Bosnian leaders. It's composed of President Izetbegovic and Minister Zubak and other Federation officials. It's meant to have one group that works on the hardest problems, and I'm pleased to report they made very important progress today in Sarajevo on some important symbolic and substantive issues.

They agreed on a flag and on a seal for the Federation. These are important symbolic issues, but I think you know the complexity of these issues and the important substantive work that had to be done to get them to that point. This decision, which was made by consensus, now goes to the parliament for approval.

They also resolved the last remaining dispute over the formation of cantonal structures for the Federation, which includes Sarajevo, which is the last and the most difficult of the cantons to design. This establishes now very firmly that Sarajevo is going to be the capital of the new state of Bosnia and Herzegovina.

They talked about the composition of seats in the city council, the composition of the city government, and they made some specific agreements concerning protection of minorities -- steps to protect minorities. We think that this important Federation meeting strengthens now the ability of all three leaders in the joint presidency to move on, form the new government, appoint a Council of Ministers, form the new institutions for this state.

That's a very important piece of business taken care of today. It belies some of the more pessimistic and sometimes even the more cynical reports coming out of Bosnia. We think this process is moving forward.

Before we get to the questions, George, if you'll allow me, I wanted to make available to all of you, a copy of the Secretary of State's speech at West Point today. This is the most important thing that is happening in the State Department today. The Secretary went up to West Point as the guest of General Dan Christman, who's the Superintendent of West Point and a very good friend of the Secretary's.

The speech that the Secretary has just completed in front of several thousand cadets at West Point had two major foreign policy focuses.

The first is that to be effective, this Administration firmly believes that foreign policy must be a mixture and a seamless mesh of both effective diplomacy and the ability to use force, to deploy force, when necessary. This, we believe, in modern diplomacy is essential.

If you look at two examples -- Haiti and Bosnia -- I think you will agree that in each the United States and our allies were able to combine diplomacy and force successfully to achieve important results.

The other point that the Secretary makes -- a very important point -- in the latter third of the speech is that the next Congress elected by the American people on November 5 needs to face up to a major serious problem that is current undermining America's national security, and that is that there is insufficient funding from the Congress and insufficient support for an effective American diplomacy.

I think you all know that over the past 12 years, dating back three Administrations, dating back to 1984, congressional appropriations for international spending by the United States have declined 51 percent in real terms -- 51 percent in real terms.

In the last four years alone, the dollar funding levels have declined by $2.5 billion; and this is a total international spending budget, mind you, of $18-$19 billion. That's a significant, significant reduction. That reduction alone over the last four years is a 22 percent real reduction in our ability to have an effective diplomacy.

Let me give you some examples of what this means. Last year, spending for multilateral development banks, with the regional developments banks and the major international financial institutions, was cut by the Congress by $447 million. These development banks and the regional development banks are the engines for much of the economic growth and financial fiscal and monetary stability that we have seen in the developing worlds and in Central and Eastern Europe over the last five to ten years.

They're critical. They're critical ways by which the international community in Russia, in Ukraine, in Central Europe, in Central America, in South America and Africa can find a way to support free-market economies; support private investment, support trade in those economies.

An additional figure -- $155 million in cuts by the United States to international organizations. We're the largest deadbeat donor in the world at the United Nations, and we're not proud of that. The United States must pay its dues to the United Nations.

As you know, we have also cut, because of the actions of the Congress, our funding for the U.N. development program. Between 1966 and 1996, every year for 30 years the United States was the largest contributor to the United Nations' Development Program. This is the U.N. agency that oversees extension of aid to the poorest countries in the world. In 1996, we became the seventh largest donor, because the budget was slashed by the Congress.

We don't believe that the United States can continue to have an effective diplomacy on the cheap. We've gotten to the point where we've cut all the way through the skin and the fat and the muscle, and we're all the way down to the bone.

As you know, Secretary of State Christopher had to make the very difficult decision to close 30 Embassies and Consulates. We gave up American turf and an American presence -- our flag, our ability to represent the American people overseas in 30 different cities over the last two years because of these cuts.

We have an inadequate communications infrastructure. Our ability to communicate with our Embassies and Consulates is severely limited because of these budget cuts.

The Secretary in his speech -- and I really commend you to read this speech, particularly the last third -- is making the fundamental case that America's national security depends on several important foundations.

We need to have a strong military, and we do.

We need to have a strong intelligence community, and we do.

But we also need, just as much as a strong military and a strong intelligence community, a strong diplomacy. We need to have a degree of diplomatic readiness that is equal to our degree of military readiness, and right now that is crumbling because of these severe budget cuts.

So the Secretary's suggestion is that no matter who is elected on November 5, no matter which party has control of the House of Representatives and the Senate of the United States, the new Congress needs to face up to this fact and this challenge and take a good hard look at these numbers, and at the very least arrest some of these severe declines in Congress' support for our diplomacy and our diplomats here at the State Department and overseas.

I commend it to you. It's a speech that the Secretary put a lot of effort into personally this week. He's thought about this issue. You've heard him testify on the Hill about this issue. This is not a new issue. But frankly he feels that the time has come for this country and our leadership in the Congress to wake up to this fact and do something about it.

That's it, George. That's all I have to say. You can see we feel very strongly about this, and the Secretary has tremendous support and has the support of the Foreign Service, the professional diplomats in this building, and of our Civil Service. I can tell you that this message that the Secretary has given today is going to resound very positively through this building. Thank you.

Q All right, at a somewhat lower level, could you say whether the Cuban Government cooperated in providing witnesses to build a case against Fernandez Pupo, the accused hijacker?

MR. BURNS: I'm willing to answer questions about this. I'm willing to talk about it. I think we need to have a dialogue. I think we need to talk about this here in the press room, and I'm glad to do it, but I'll be glad, George, to answer a question on Cuba first.

I can tell you that the hijacker, Jose Fernandez Pupo, has been charged with air piracy under 49 U.S. Code, Section 46502. On October 24, yesterday, he was flown to the United States, and he is now in federal custody.

During the investigation of this case, the Department of Justice team visited Cuba in order to interview witnesses in this case. So in that sense, we did have the cooperation of the Government of Cuba. As this is a pending legal case now in the United States' judicial system, it's inappropriate for me to provide any further comment. I'd refer you to the Department of Justice for any further information, if more information is available on this particular case.

Q When were witnesses interviewed?

MR. BURNS: They were interviewed over the last several weeks in Cuba by Department of Justice investigators. As you know, this was a -- you remember this case. You remember the hijacking. In fact, it was carried live on television by MSNBC and CNN, as I remember it.

It's a celebrated case. We did require the cooperation of the Cuban Government to interview people, and we have interviewed him, and he has been brought to the United States. He's in federal custody awaiting trial.

Q Are any Cubans going to testify at the trial, do you know?

MR. BURNS: I don't know. That's a question you'll have to ask the Justice Department.

Q Did Cuba ask for his extradition?

MR. BURNS: I don't know if Cuba asked for his extradition in this particular case. I know that in the past, despite our very poor relations with Cuba, from time to time on specific law enforcement cases we have had a degree of cooperation from the Cuban Government. This is not new. Our investigators at certain points have cooperated together.

I don't know if they've asked for his extradition. I know that we have no formal cooperation agreement on counter-narcotics with Cuba, but I don't know anything about extradition.

Q Could I ask about a question, an issue that you raised, which is the U.S. debt or -- yes, the unpaid debt in terms of U.N. assessments and dues. Are you aware of any movement to remove James Speth as head of the U.N. Development Program?

MR. BURNS: I'm glad you asked about that, because there was a very interesting article this morning about Mr. Speth. We are aware of the following: James Gustave Speth -- he's known as "Gus" Speth -- is an American. He heads the U.N. Development Program. I believe his mandate -- his present term expires on July 1 of next summer, 1997.

The United States believes that he has done a very good job at administering this program in the sense that he's tried to reform it, streamline it, make it more efficient. He's taken that responsibility very seriously. In light of that, because of his very strong leadership at the UNDP, the United States fully supports and very strongly supports his continuation in office.

We will be making the case to our friends in the United Nations that he ought to be carried into a second term of office after July 1, 1997.

We've heard some talk that other candidates might appear -- that wouldn't be unusual -- to oppose him; that other countries might be trying to mount a campaign. That would be very unwise. The United States, let's remember, is the host of the UNDP. As I said, for 30 years we were the largest funder. This Administration -- the Clinton Administration -- has opposed the severe Congressional budget cuts in our support for the UNDP.

I can tell you that the amount appropriated in Fiscal Year 1996 was $52 million -- U.S. contributions to the UNDP. That's substantially less than the Administration request and a substantial decline from the $113 million contributed by the United States in Fiscal Year 1995.

In Fiscal Year 1997 -- the current fiscal year -- the Clinton Administration has requested $78.7 million for the UNDP. We expect right now, based on some initial consultations up on the Hill, that we might be able to get an amount close to that. If that is the case, I think that's a very strong demonstration of U.S. support for the UNDP. I don't believe that Mr. Speth should be disadvantaged or held accountable by other countries for the actions of the U.S. Congress. He's done a fine job, and we will certainly fight very vigorously any attempt by any other country to oppose Mr. Speth for his position after July 1997.

Q Does it work the way the Secretary Generalship works. There's a vote in the General Assembly but then it's ratified, in effect, by the Security Council?

MR. BURNS: I am not sure of the procedure. We could ask almost immediately after the briefing and get you an answer, Jim.

Q In your recitation of the good things that happened in Bosnia today, you didn't mention any progress on the Defense Commission and the changes the Bosnians have to make to allow equip-and-train to go forward. This is left over from yesterday. Is there nothing to announce? Has there been no progress on that?

MR. BURNS: One word, Judd. I wanted to start on a positive note because I've been impressed by how negative the discussion often is on Bosnia. The war is ended; peace is made at Dayton, and we've had a year now of successful peace implementation; not without a lot of effort and disagreement but successful implementation.

Our strong view here in the U.S. Government is that we are succeeding in Bosnia.

On this question of train-and-equip, I can tell you that Mr. Pardew, who is the President and Secretary of State's representative, met yesterday with President Izetbegovic on this issue. I can't say that there's one single issue that has prompted us to delay the delivery of this substantial military equipment -- the tanks, the helicopters, the armored personnel carriers, the 45,000 M-16s. But I can say that we're concerned about some staffing issues at the Ministry of Defense -- some personnel, some people who are in current positions. We're concerned about them.

We're concerned about the failure to implement key components of the Joint Defense Law in the Federation.

We're friends with the government in Sarajevo. I'm going to keep most of this under wraps. I'm not going to reveal the names of some of the people at issue here because we are friends. Ambassador Pardew had a very good meeting yesterday. We're confident that the steps that need to be taken to allow this equipment to go forward are going to be taken by the government in Sarajevo; very confident about that.

Q They haven't been taken yet?

MR. BURNS: Not to my knowledge, no. Once they're taken and once Ambassador Pardew is satisfied, then that equipment at Ploce is going to be transferred to the stockpiles under the control of the Federation.

Again, the purpose here -- and this is a year-long quest by the United States -- is to try to elevate the military capability of the government so that there is deterrence in place when the day comes that the foreign forces and observers and foreign workers leave Bosnia. We don't want to see a return to the war. We're trying to strengthen the ability of the Central Government to have a deterrent capability.

I think I gave you yesterday substantial numbers of tanks -- the 45 M-60 tanks and a substantial number of helicopters, armored personnel carriers, the weaponry. This is very significant. It's really going to help the Bosnian Government achieve a level of deterrence necessary to succeed in the future.

Q Do you have anything new on northern Iraq? More insight maybe to --

MR. BURNS: Nothing new. We are keeping close watch on the military situation. We know from the PUK and KDP today that the cease- fire is holding; that they continue to tell us that they will be in Ankara next Tuesday when Ambassador Pelletreau convenes the reconciliation talks between the two major Kurdish factions. He'll be assisted there by the Turkish and British Governments, but nothing new to report.

Q The cease-fire is continuing?

MR. BURNS: Yes, I just said that. The cease-fire is continuing. Yes. It's in place; it's intact. It's a major step forward.

I think Ambassador Pelletreau, frankly, deserves a lot of credit for stepping into a very dicey, tough situation and convincing these two militaries to stop fighting.

Q Another question on northern Iraq. Most of the Turkomans live below the 36th parallel. Does it make any difference regarding U.S. policy toward the Turkomans? Do you have different policies toward the Turkomans living in the "no-fly" zone or out of the "no-fly" zone?

MR. BURNS: We have specific responsibilities above the 36th parallel. "Operation Provide Comfort" is the best example of that. But we are concerned, in general, about the treatment of minority groups by the government of Saddam Hussein. The Turkomans are included in that. Because of that, we meet with them as often as we can.

Ambassador Pelletreau has met with the Turkomans consistently as have our Embassy officials in Ankara and elsewhere.

Q Did the North Koreans make any new proposal in New York?

MR. BURNS: I can confirm to you -- I think some of you know that American diplomats from the State Department, State Department diplomats, met in New York yesterday, had one of their regular meetings with North Korean diplomats. Mr. Li did appear at that meeting. As I promised you, when Mr. Li -- I said that if Mr. Li came to the meeting, we would talk to him. He'd join the meeting.

We raised the issues that you would have wanted us to raise, that you would have expected us to raise, including the issue of Mr. Hunziker -- Carl Hunziker -- the American that's being held unjustly by the North Koreans, and all the other major issues were raised as well.

Q Is there a second paragraph here?

MR. BURNS: No second paragraph. I thought that was a very good answer.

Anything else you want to know about this meeting?

Q Any progress on Hunziker? Any satisfaction?

MR. BURNS: I can't report, unfortunately, any progress on this case. The United States is very displeased by the way an American citizen is being treated. He's being accused of espionage, and he's innocent. He should be released immediately. We want our Swedish protecting power in Pyongyang to have the right to have regular access to him so we can ensure ourselves and his family in the State of Washington that he is in good health and is not being mistreated. We very much hope that he is being treated well.

Q Who is in the delegation on the U.S. side? Who is present on the U.S. site?

MR. BURNS: Who is part of the delegation?

Q Right.

MR. BURNS: These are very modest people. We don't like their names to appear in public. I think I probably shouldn't do that today. These are American Foreign Service officers who are in charge of our relations with Korea. These are the people who run our Korea Desk and who staff our Korea Desk. It's not been our practice to float their names. I think I'll ask them. I think I'll see, on Monday, if they want their names used. But they're State Department Foreign Service officers. They have a regular diplomatic dialogue with the North Korean officials up at the U.N. That's the primary way, and many times the only way, that we can communicate with the North Koreans.

Q Is a meeting going on this week?

MR. BURNS: Excuse me?

Q A meeting is going on this week or next week?

MR. BURNS: The meeting took place yesterday in New York. It has concluded. We have regular meetings. We normally don't announce them ahead of time but we do confirm them after they've been held.

Q Nick, can you run down the other issue?

MR. BURNS: Yes, I do have the full name of Mr. Li. For those of you who speak Korean will forgive this pronunciation, Mr. Li Hyong Chol, transliterated "Li" -- H-Y-O-N-G, C-H-O-L. He's a senior diplomat of the North Korean Government.

Q Can you run down the other issues and tell us whether there was any progress at all, for example, on the question of whether there will be a missile test or not; on the question of the sub incident; on the question of non-proliferation issues in general?

MR. BURNS: I would be diplomatically incorrect if I were to give you the whole agenda. But I'm going to try to help. I know what you're asking, David.

I have been asked by our diplomats not to give out the agenda and not to discuss the substance of the meeting. But I can say this: When we meet the North Koreans, we raise at these meetings the fundamental issues of importance. The submarine incident, obviously, is one that's been raised often by the United States; the missile test issue, the case of Mr. Hunziker, the Four-Party proposal -- many other issues.

On the case of the missile test. The United States cannot confirm that the North Koreans have tested a missile. We're not aware that they've tested a missile but we are aware of some statements made by the North Koreans that they intend to test a missile. Our position on that has not changed. We are opposed to it. We don't believe it's a good idea. We think it will be destabilizing.

I can assure you that we have made that point until today at every opportunity with the North Korean Government officials.

Q Were there any hints of flexibility on any of these issues on the part of the North Koreans?

MR. BURNS: I just can't say. I just can't say.

Q Nick, was there any discussion of the Secretary's comments in his speech today relating to that point where he says the U.S. won't hesitate to respond militarily to any aggression from North Korea?

MR. BURNS: Without reading the specific words -- you all can read specific words. You weren't quoting directly. You were just paraphrasing.

Q "Respond militarily" is a direct quote.

MR. BURNS: But there's a fuller context, obviously. The Secretary was reaffirming well-known, clear American policy. We have an ally in the Korean Peninsula -- the Republic of Korea. We, of course, have thousands of American troops there to defend the Republic of Korea, and we will do so should that be necessary.

We don't believe there's any imminent threat against the Republic of Korea -- any imminent threat that would cause any kind of large-scale military confrontation.

As you know -- and as Tony Lake, our National Security Advisor, said in a major speech the other night -- North Korea is one of the major priorities for U.S. foreign policy. We watch what's happening on the Agreed Framework. It has not been violated. There's still a nuclear freeze in place.

We watch the disposition -- the United Nations does -- of North Korea's military forces. We will defend South Korea, if necessary. There's no question about that. It's a solemn obligation made by the United States for many decades.

Q Is it necessary in a meeting such as the one yesterday to give them the flavor of that thought?

MR. BURNS: Since I can't discuss the contents of the meeting, I really can't address that question. But I can assure you, Sid, the North Koreans are very well aware privately, as well as through our public statements, of the deep concern we have with the many provocative actions taken in the last six or seven weeks against South Korea.

The United States has been full-square behind South Korea since day one, when these events started.

Q Nick, given these recent incidents, matters of concern, can you characterize at least the tone of the meeting compared to previous meetings?

MR. BURNS: I really can't, as you know. I was here; I wasn't in the meeting. I don't have a detailed readout of the meeting. It's been our practice to keep these meetings largely private.

Still on this. Bill.

Q No. Changing.

MR. BURNS: Bill's got one. Bill.

Q Excuse me, Charlie. Just one more. Is KEDO still -- are the North Koreans still in conformity on the KEDO treaty, especially with regard to their reprocessing and some of the noises they've made in the last couple of weeks? Was that addressed? And have you any comment?

MR. BURNS: Yes. I just said that North Korea is meeting its obligations, as are the KEDO partners. The nuclear freeze is in place. The Agreed Framework is in place. There are no problems.

Q Can you tell us when you'll have the next meeting with North Korea?

MR. BURNS: No. It's been our policy not to do that, but we'll be glad to confirm the meetings once they've taken place.

Q Speaking of modest diplomats and stories that don't have second paragraphs, is there any news from the Special Middle East Coordinator?

MR. BURNS: He's only modest in one respect. He's brilliant in almost all others.

I spoke with Ambassador Ross about two hours ago. He was heading into a meeting with Chairman Arafat. He is continuing to work 20 hours a day with the Israelis and Palestinians to move their talks towards completion. He's taking it one day at a time.

He's had a very high level of contacts in the last couple of days. He's meeting with the leaders. He's meeting with the top officials. As long as that's the case, it's certainly useful for him to be there.

We are heading into the Sabbath. Today is a Muslim holy day. Tomorrow is the Jewish Sabbath. The Jewish Sabbath has already begun, actually. I expect that Dennis would stay there through at least the weekend. He'll continue to plug away. Ultimately, these talks will conclude successfully.

Q Any sign of an Arafat-Netanyahu meeting?

MR. BURNS: Excuse me?

Q Any sign?

MR. BURNS: I'm not aware of one.

Q In your least favorite Washington newspaper, there's a story quoting Secretary Pelletreau in Dubai saying that the United States wants to open a dialogue with the Government of Iran. Is that now stated U.S. policy?

MR. BURNS: I think it's important when papers report on issues like this that they provide some context. Ambassador Pelletreau was in Dubai speaking to an American business group there.

He essentially just reaffirmed long-held U.S. policy, which is that -- and there's been no change in U.S. policy, and he was not enunciating a change -- which has been that the United States is prepared to engage in a diplomatic dialogue with the Government of Iran. Should we engage in such a dialogue -- start one; should we have talks -- we would raise Iran's support for Middle East terrorist groups; Iran's intentions to acquire a nuclear weapons capability; all the other objectionable Iranian behavior, including opposition to the Middle East peace process.

If the Iranians would like a dialogue, we'll be glad to have one. It would be on those issues. That's what we would raise. That's what our agenda would be, and that's all Ambassador Pelletreau was saying.

Q How does this willingness to open a dialogue with Iran fit into the so-called dual containment policy announced by this Administration?

MR. BURNS: As you know, the Clinton Administration has had a policy of trying to isolate Iran. We've cut off economic relations -- American business contacts with Iran -- because we're concerned that Iran is trying to develop nuclear weapons and other weapons of mass destruction.

We're concerned for its direct support of Middle East terrorist groups. We've taken the lead. Some of our European friends, most of them, have not followed. We hope that they'll wake up to the fact that Iran is a major danger.

This is perfectly complimentary with that policy. Sometimes you do need to talk to your adversaries. You do need to talk to governments with which you have little in common because it's a way to communicate, if those communications can be useful.

We don't right now have these diplomatic conversations because the Iranians haven't taken us up on this long-standing, multi-year U.S. policy. But that's all Ambassador Pelletreau was doing.

Q How does this policy of being willing to open an dialogue differ from the European Union policy of "crucial dialogue with them?"

MR. BURNS: Oh, it's very different. The United States doesn't have diplomatic representation in Tehran. We have another country, Switzerland, representing our interests. We don't have any kind of normal talks at all with their senior diplomats.

The Secretary has not met Foreign Minister Velayati and will not meet him, I'm sure. But we're willing to talk to them should they want to talk about their objectionable behavior.

The Europeans have a very different policy. Most of them have diplomatic representation in Tehran. They have a normal diplomatic relationship. They have a very active commercial relationship.

Iran gets the benefits from Europe of European trade, investment. Yet, we, in the West, don't get anything back. Iran continues to be the major state supporter of terrorism in the Middle East. It continues to try to develop nuclear weapons, chemical weapons, biological weapons, which will pose a threat to all countries in the future.

We don't think that there has been a shred of evidence produced that the critical dialogue has succeeded in any respect. That's why we maintain our difference in our policy and our resolute opposition to the current practices of the Iranian Government.

Q Russia?

Q At what level -- you said the Secretary wouldn't meet with Foreign Minister Velayati. At what level would you expect such contacts to take place? In the past, when that formulation has been used, it's always been said, as long as these people were legitimate representatives of the Iranian Government -- I note you didn't use that. Was that intentional?

MR. BURNS: I'll just make my answer more complete by saying, authoritative representatives of the Iranian Government. It's hard to say, Sid. It wouldn't be at the most senior level. But, again, this is quite theoretical and hypothetical. We don't have any contacts right now.

Should the Iranians want to sit down and talk about terrorism and their nuclear weapons development program, we would be ready to do that.

Q That's it. Nothing else?

MR. BURNS: That would be the top of our agenda, because these are the issues that concern the American people.

Q Who would be at the bottom?

MR. BURNS: I can't give you an exhaustive list. I'm not on the Iran Desk.

Q The Middle East peace process, maybe, or support for Hezbollah in South Lebanon?

MR. BURNS: Yes, I've talked about that. That would be one of the issues -- their support for Hezbollah and Hamas and the other terrorist groups in the Middle East. That would definitely be on the list.

Q The Middle East, still?

Q I'm sorry. Iran?

MR. BURNS: Iran.

Q What about the oil pipeline -- the big oil pipeline project that could go through Iran, would that be something you would talk about?

MR. BURNS: Which one is that?

Q I think there's only two. One going from Kazakstan and one going -- all going from the Caspian Sea.

MR. BURNS: As you know, it's been the position of the United States Government since 1993 that we think the oil that's developed in the Caspian Sea by the Azeris and by the Kazaks in that area, by the others -- by the Russians -- should obviously be transported for use in the West and in Europe but not in a way that the oil pipelines go through Iran.

Q Is that something you would be willing to discuss with the Iranians?

MR. BURNS: We certainly do not want to help the Iranians exploit the Caspian Sea oil and gas reserves. There are many American oil companies working with the Kazaks, the Russians, the Azeris, and others.

Q Why do you say that we don't have any contact with the Iranians? Under "we," do you mean the employees in this building or just Americans or --

MR. BURNS: The United States Government. We don't have any normal diplomatic contacts.

Q Do you have any further reflections on the efforts of President Chirac to have an enhanced French role in the Middle East peace process?

MR. BURNS: The United States has a regular series of conversations with the French Government. I told you that Secretary Christopher wrote Foreign Minister de Charette in advance of President Chirac's trip to give the French Government the benefit of the continued, sustained, high-level involvement that the United States has had in the Middle East peace negotiations.

We're, of course, in a position, since we're the only country involved as mediator in the Israeli-Palestinian talks, we're in a position to give the French Government our analysis of the progress made in those talks.

President Chirac is a friend of our government, and France is a friend of the United States. We don't always agree on all issues. I think all of you know that. We and the French regularly would admit that, but we're NATO allies. France is our longest, oldest ally.

We think that President Chirac's presence in the Middle East and interest in having France play a role in the Middle East peace process continues to be positive. We would say the same thing about the United Kingdom. Secretary Rifkind has planned a trip, and we would be very supportive of any efforts made by the United Kingdom.

As you know, our position on the Israel-Palestinian talks is that the two negotiating teams -- the Israelis and Palestinians -- decided they wanted one intermediary. They decided that a long time ago, and that would be the United States.

I think if you look at the track record of the United States you'll see that we have been balanced and objective. We are friends with both the Israelis and Palestinians. We have, I think, the confidence -- Secretary Christopher, certainly, and Dennis Ross have the confidence of Prime Minister Netanyahu as well as Chairman Arafat.

When you're a mediator, you need to have the ability to speak to both sides. You also need -- and we've tried very hard to be discreet here. The United States, of course, is not spilling out into public all of the details of the negotiations because we want to have credibility.

This is how the United States has been successful in the Middle East. We're confident about our own role. We certainly welcome President Chirac's trip. We welcome the involvement of the French and British Governments, and the EU, in general. The EU has been a major contributor to the Palestinians.

I do want to correct the record, though. I have seen some consistent comments from officials in Paris downgrading the economic contributions of the United States to the Palestinians. You know that we are extending $500 million in American assistance to the Palestinian Authority over five years. This is highly significant, and it's much valued by the Palestinians.

I've just been concerned by some of the estimates of our assistance coming out of Europe that have our assistance down at the $20 million figure. It's $500 million. That's quite substantial.

Q How much has actually arrived, though?

MR. BURNS: I believe more than half of that money has arrived and has been spent. We can get, within 10 minutes after the briefing, from John Hamilton in NEA, the exact figures. I believe it's over 50 percent.

One of the things that Secretary Christopher has been very keen about, since we are so closely involved, is that we meet our commitments, we follow very carefully the implementation of the assistance programs. Because we have found that if you don't do that, if you don't have someone like Dennis Ross actually overseeing the implementation of these projects, sometimes they don't go so quickly.

As you know, Dennis always -- he travels to Gaza. He has visited the sewage projects there. He's traveled to the West Bank and visited a lot of our economic development projects because we want to meet our commitments. We want to be helpful to the Palestinian Authority.

Q Concerning the Chirac visit again. You mentioned at the beginning of the visit that the region is not exclusively for the U.S. The second day or the third day, you said we don't want a U.N.-type diplomacy.

Now, at the end of the visit, do you have this dual statement concerning your point of view?

MR. BURNS: I'm sorry if there's been any misunderstanding because, you know, France and Britain have had influence in the Middle East for centuries. No one -- no one -- would want to see France and Britain foresake the Middle East, and they're not.

All we said the other day was that in the Israel-Palestinian track, and the specific negotiations on-going now to make the final decisions on implementing the Oslo II agreements on Hebron, the Palestinians and Israelis wanted one partner -- the United States. No one wants a mini- United Nations in those negotiations. But there's more than enough room in the entire Middle East for more than the United States.

We want the French, the British, and the EU to be involved -- Italians.

Q You don't have any comment on Chirac's statements about Jerusalem, about Hebron, about all these issues?

MR. BURNS: No, I don't. I think he has expressed himself, he has expressed the views of the French Government, we have our own views, and I have no comment on that.

Q Nick, can I ask a question on the same thing. Yesterday, on radio in Israel and in Palestine, Saeb Erekat, the Chief Negotiator, made comments about Ross, indicating that Ross was taking Israel's side every time. I'm just wondering what the relationship is there?

MR. BURNS: I'd be surprised if that was really what Mr. Erekat meant because, you know, Dennis Ross has -- I think he's proven over the last several years, he has the complete confidence of Chairman Arafat. The United States has been a very good friend to the Palestinians. We've supported them very effectively economically. We've been an objective facilitator of their talks with the Israelis.

I think it goes to show you, the Palestinians insisted that the United States be at the table, and that Dennis Ross personally stay. The Palestinians and Israelis asked him to stay the other day when he tried to come back to the United States after 16 days in the region.

We have the confidence of the Palestinians and the Israelis.

Q Nick, to go back to your previous comment. I just want to be clear on it. The United States is ruling out France having a role in the final status negotiations. Is that what you're saying?

MR. BURNS: Sid, we haven't talked about the final status negotiations, and --

Q I believe you said --

MR. BURNS: No, I was talking about the current negotiations over Hebron, which is not final status. It's Hebron; it's Oslo II. The final status talks are between the Israelis and the Palestinians. They will decide if any other country sits at the table with them. I don't believe they've made that decision yet. The United States is not in a position to rule out anybody's participation. I never said that.

For those reading this on www.state.gov, let the record show that the United States will not make a decision as to which countries are at the table, if any. That's up to the Israelis and the Palestinians.

Q Would the United States welcome whatever decision the Israelis and the Palestinians come up with --

MR. BURNS: It's up to them to make this decision, and we would certainly stand by any decision they make.

Q And as far as the French participating in the final status negotiations?

MR. BURNS: I don't believe that that's been raised as a possibility. I've never seen it raised as a possibility, and I don't believe they've decided how they're going to conduct those talks, once the Hebron talks are completed. It's completely up to them.

See, the great thing is that they're in charge of the negotiations -- the Israelis and the Palestinians. They make the decisions. We don't. The French don't, and the British don't, and that's the way it should be.

Q Nick --

MR. BURNS: Yes, Andre.

Q Another question about Jacques Chirac's statement. Do you agree that the next Secretary General of the U.N. should speak French? (Laughter)

MR. BURNS: Is this a trick question, Andre? (Laughter) Actually, there were --

Q As a Francophile.

MR. BURNS: I am a Francophile. That's right, I am a Francophile. Thank you. I think the United States has long recognized that French is a very important world language; that it is one of the official languages of the United Nations. We certainly respect the interests that the French Government has in promulgating the use of French worldwide. A lot of people here in the United States take French. I insisted my daughter take French in the 8th grade and not Spanish, because I think it's a very important world language. So we certainly respect the right of the French to put this view forward.

It has been the practice, of course -- certainly, Mr. Boutros-Ghali speaks beautiful French -- that the Secretary General speak French. I don't know if we have an official position on that, but that's certainly -- I would say this out of respect for the French Government.

Q The New York Times today came out squarely against NATO expansion any time soon, making a series of arguments I'd like you to respond to, if you care to. They said that admitting new members would rashly commit America to the armed, and potentially nuclear, defense of newcomers; that the cost could run as high as $125 billion over a 15- year period, and they wonder who's going to pay that; and that NATO expansion would divide rather than unite Europe, feeding defensive nationalism in Russia and making it harder for Russian leaders to negotiate any further strategic arms reduction agreements, besides the ones they've already negotiated. Any answer to those arguments?

MR. BURNS: Certainly. First, I think the editorial was well written and well reasoned, but we disagree with it. We have a fundamental disagreement with the editorial.

I think, David, I would take you back to President Clinton's speeches, on his January 1994 trip to Europe and Brussels, Prague and in Moscow. The President has been very consistent about this, consistent for two-and-a-half years.

The objective is to create a Europe in the 21st century that is united, peaceful and stable -- everything that Europe has not been in the 20th century -- through the wars, through the two world wars on the European continent.

We believe, all of us in NATO, that the best way to attain that overall supreme objective -- probably one of the most important foreign policy objectives that the United States has for the next 50 to 100 years -- is this: To modernize, renovate and renew NATO.

NATO, as President Clinton said the other day, saved Western Europe after the second world war, and it cemented democracy in Western Europe and capitalism in Western Europe. We can now expand NATO eastward and have NATO, in its 50th year and it's second 50 years, serve the same purpose in Central and Eastern Europe. It can help those countries consolidate their democratic, political and economic revolutions.

At the same time, the United States believes very strongly, as do all of our NATO partners, that in addition to expanding NATO, we need to create a new relationship with Russia. Everyone agrees with The New York Times in this respect. We do not want to see NATO expansion lead to a downturn in the West's relations with Russia. The way to do that, we believe, is to agree with the Russians on some kind of arrangement -- it can be a treaty, it can be a charter, it can be a set of political understandings -- whereby the Russians have a way to work with NATO militarily. They understand what the rules of the road are, and that the Russians and NATO have a relationship dedicated to reducing the risk of nuclear war, the level of nuclear armaments in Western and Central Europe. That's very, very important.

We think if we do both of these things and the fundamental decisions about them will be made, of course, in 1997, as President Clinton has said, then Europe can be free, peaceful and stable and united in the next century.

We disagree with The New York Times. We don't believe that it is going to be the case that expanding NATO leads to a downturn in our relations with Russia. We fundamentally disagree with that.

Q Are you getting any further with figuring out how to deal with the concerns of Baltic countries and others that are afraid that there might be one NATO expansion and no further expansions thereafter?

MR. BURNS: I think the best answer to that is President Clinton's statement in September when he met with the Baltic Presidents in Washington, and that is that the first wave -- the first set of countries to come in will not be the last. I'm paraphrasing. But we would expect this to happen in stages.

By no means are we saying that those countries admitted in the first wave will be the only countries admitted into NATO. The Baltic countries are a special concern of the United States. President Clinton worked very hard with President Yeltsin in '93 and '94 to convince the Russians to withdraw the Russian troops from Estonia and Latvia. That happened.

These countries are modernizing their economies faster than just about anybody in Central Europe. They are a part of the West, historically, culturally, and that's their future. They'll be part of the West.

Their military future, we think, rests right now in Partnership for Peace. The Balts are with us in Bosnia. The Baltic battalion is working with the United States and the Russians in the American sector in Bosnia.

Q Russia question. The Russian Defense Minister, Rodionov, today is quoted as pleading with the Russian Government for more money for the military and saying that the shortage of funds could be catastrophic. He said it could have extremely undesirable and uncontrollable consequences. He didn't specify, and I know you can't comment directly on the state of the Russian military.

But is there concern in the United States that the lack of funds for the Russian military is a potentially destabilizing situation that could threaten the Russian Government?

MR. BURNS: I think we have to let Russian Government representatives characterize the state of the Russian military. I cannot do that. I can just say that the United States believes that the Russians appear to have control over their nuclear forces -- the Russian Government does; that the Russian military, of course, has fallen on some hard times. It's undergone some transition, but we know that the Russian leadership is sensitive to this from President Yeltsin on down, and Minister Rodionov's speech is an example of that -- the one that he gave today.

But it's up to the Russian Government to characterize that. We continue to have very good relations with the Russian military. In fact, they have never been better in the history of the relationship between the Russian and the American people, going back 250 years. Our military relations have never been closer than they are today. We're together on Bosnia, patrolling together.

Secretary Perry has made it a priority of his tenure in office to improve those relations, and that is happening.

Q On that note, if Russia applies for NATO membership, what would the U.S. reaction be?

MR. BURNS: That's one of those academic, hypothetical questions, because the Russian Government has said that not only won't they apply, they don't agree with NATO expansion itself. So I just don't think that's something that's going to happen.

Q But it's one of the reasons why they don't apply.

MR. BURNS: We believe that Russia and the United States can cooperate together in the Partnership for Peace, as we are now, very effectively, and through this new Russia-NATO relationship, when we solidify it, that will be very effective, we think, in cementing Russia inside the new Europe.

By the way, the United Europe that President Clinton has as a vision includes Russia, of course. That's fundamental to this. Russia has -- is part of the work that needs to be done -- fundamentally part of it -- of uniting Europe and keeping it peaceful.

Q There seems to be two parts of today's discourse that are not fully in harmony. One, this NATO expansion --

MR. BURNS: My discourse?

Q The whole dialogue here. One is Secretary Christopher's continuing concern about the lack of funds available for American diplomacy and NATO expansion. I haven't heard what you said today that would address, certainly my concerns and others, about the expense of actually trying to integrate Eastern Europe into NATO on not just the military but also the civil/political side?

MR. BURNS: When you're a great power, you have to have a sufficient amount of resources to be a great power, and you have to be willing to spend money on things that are worthwhile.

When NATO expands, the countries that become new members will have not only the rights but the obligations, including the financial obligations, of NATO membership. Everyone will share those equally. It's not going to be a burden that the United States shoulders alone. I can assure you of that.

I don't know where these figures come from in The New York Times' editorial. I've not seen them before, and those aren't U.S. Government figures.

Q Just to follow up, if you look at the expenditures that have been given to that part of the world -- not just by the United States but by the Common Market -- they don't add up to a very substantial amount over the last few years, and I think it really questions the ability to integrate these countries as well.

MR. BURNS: The United States has transferred several billion dollars worth of financial assistance to the Russian Federation alone over the last four years. That money has helped to privatize the Russian economy. It's very well spent. The IMF and World Bank are shouldering the great responsibility, which is in the tens of billions of dollars, and that's the appropriate vehicle for fiscal and monetary change in Russia.

I think the West has done quite a lot. If you look at what the United States and Germany have done together -- the United States and Germany, plus the IMF and the World Bank -- there's been a substantial Western effort to meet the challenges of reform in Russia.

Q We're not talking about Russia. I mean, Russia's not going to be integrated into NATO in the near future. I'm talking about Eastern Europe -- Eastern and Central Europe.

MR. BURNS: And we've also made a commitment to those countries. But the Congress sets the limit on what the United States can do in Central Europe, and we've been unhappy about some of the funding decisions made by the Congress.

Q Nick, new subject. Okay, go ahead.

Q Is it your understanding that the IMF is preparing to suspend its credit -- $10 billion credit package to Russia?

MR. BURNS: I do want to correct the record from some of the articles this morning. As we understand it from the IMF, there's been no decision made by the IMF to suspend the program. We understand that the IMF team in Moscow for the September review of the program left Moscow, has returned to Washington, and there will be meetings next week at the IMF to make this decision.

They could take the decision next week, but they haven't yet taken it. We feel that the Russian Government is very sensitive to the problem of insufficient collection of tax revenues. Prime Minister Chernomyrdin and Chief of Staff Chubais have formed a special commission to look into this problem. They've talked about it publicly just this week.

The Russians have had ups and downs with the IMF before. We do believe that conditionality should continue to be applied, and we think in general the Russian Government understands that it needs to take some measures to meet the concerns of the IMF, and we support that.

Q What is your position on the suspension of the loan, the credit?

MR. BURNS: It hasn't happened yet. As I said, it hasn't happened. There's been no suspension of the loan. If it happens, we can talk about that next week, but it hasn't happened yet. I gave you our position in the second part of what I just said.

Q It's not as if you think Russia's doing all it can at the current time?

MR. BURNS: We believe in conditionality, meaning the IMF and World Bank have a right and it's logical to ask that certain targets be met in return for the substantial funds that Russia is receiving. If the IMF has concerns, I'm sure the IMF will express them.

This is not new. It's happened many times in the past couple of years, but in general the prognosis for the Russian economy is far better that it was a couple of years back. We think that this relationship with the IMF will certainly continue. If the IMF wants corrections to be made, I'm sure the Russians will be sensitive to that.

Q Nick, how do you respond to the allegations that Mr. Jorge Cabrera of Miami, a now convicted cocaine felon and drug kingpin, has had connections to the Cuban Government, especially Mr. Castro? And, secondly, is the State Department concerned that some of these drug lords from the south are getting access to the highest offices in this country?

MR. BURNS: Bill, the second question, I have absolutely no idea what you're referring to, so I can't possibly answer that question. The first question --

Q (Inaudible)

MR. BURNS: The first question -- I'll take the question, because I just don't have any information on it.

Q Okay, but the allegation basically, Nick, is that Mr. Cabrera had access to the Vice President. He wasn't screened out, even though he was a felon and convicted criminal.

MR. BURNS: Bill, Bill. I don't know where you're getting this information. I can't possibly address that question.

Q This is in The Washington Times.

MR. BURNS: It's not appropriate. Thank you.

(The briefing concluded at 2:08 p.m.)

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