PRESIDENT BUSH:  Mr. Prime Minister, thanks for coming.  I’ve been looking forward to this visit.  Last time we were together we had a long and serious discussion about what we can do together to keep the peace.

This visit comes, obviously, during a period of great concern for the world about what’s taking place in Gaza, and so it’s a timely visit.  I’m looking forward to our discussions about how we can promote a common vision, a vision that speaks to hopes and aspirations of the Palestinian people, and a vision that speaks to the security of Israel.

I’m looking forward to sharing with the Prime Minister the results of a phone call I had yesterday with President Abbas.  He is the President of all the Palestinians.  He has spoken out for moderation.  He is a voice that is a reasonable voice amongst the extremists in your neighborhood.

You also come at an important moment, because there is yet again another moment for the world to see the great challenges we face in the 21st century.  We face extremists and radicals who use violence and murder as a tool to achieve objectives.  And it’s a chance, Mr. Prime Minister, for us to work on our bilateral relations, but also work on a common strategy to fight off those extremists, and to promote a alternative ideology, based upon human liberty and the human condition.

And it’s a great challenge.  It’s exciting to be in office during this period.  It can be difficult for those of us who have been given the great honor of serving our country, but it’s an exciting moment.  And I’m looking forward to working with a strong leader, a man committed to the security and prosperity of his country, and at the same time, committed to try to work the conditions necessary for peace.

And so I’m glad to welcome a friend back to the Oval Office, and proud you’re back.

PRIME MINISTER OLMERT:  Thank you very much, President.  I am honored and delighted, after half a year almost, to be again a guest of yours, Mr. President, in the White House, and to discuss with you some of the kind of issues.

As you have said already, this is a very special time.  Things happen lately very dramatically.  I’m sure that many people in the world were astounded by the brutality and the cruelty and the viciousness of the Hamas murderers that killed so many Palestinians in such a way.  We who live in the Middle East, some of us surprised, but not less outraged by these events.

And I gladly share with you, Mr. President, the vision that, even under such circumstances, what we ought to do is to try and find opportunities for the future that align this situation.  And I’m absolutely determined that there is an opportunity.  And like you, I want to strengthen the moderates, and cooperate with President Abu Mazen, who is President of all Palestinians; is the only person who was widely elected in a democratic manner by all of the Palestinian people.  And I am going to make every possible effort to cooperate with him and to move forward to see how to — can work jointly in order to provide the Palestinians with a real, genuine chance for a state of their own, fulfilling your vision, Mr. President, which I share, of a two-state solution, and at the same time, making sure that there is security for the people of Israel, and the people of Israel deserve security both in the south and in the north and in the east side of our country.

I’m sure that we will find some time, also, to discuss other measures, such as the danger of Iran and the threats that come from the President of Iran, who talks time and again about the liquidation of the state of Israel, something that is totally intolerable and unacceptable.  And we have to continue the measures taken in order to stop the Iranian efforts to establish unconventional weapons.

And again, I thank you for your friendship and for the power that you manifest and your dedication to the principles that you believe in.  And I am proud to follow the same route to fight for the principles and to carry on.  Thank you.

PRESIDENT BUSH: We’ll answer a couple of questions, starting with Jennifer.

Q    Thank you, sir.  Will you try to persuade, during the session with the Prime Minister, to reenter peace talks with Mr. Abbas? And to the Prime Minister, what do you think of the offer, and do you think it’s possible to have peace with just half the Palestinian people?

PRIME MINISTER OLMERT:  I didn’t hear the first part of the question.

PRESIDENT BUSH:  Will I try to persuade you to enter talks.

First of all, we share a common vision of two states living side-by-side in peace.  And the reason why at least I think that’s important — one, I think it’s important for the moderate people, the ordinary Palestinians to have something to be for.  I also think it’s in Israel’s interest to have a state.  It’s a demographic pressure that ultimately is going to make it very difficult for Israel to maintain its Jewishness as a state.

So there’s a practical reason, as well as a moral reason for there to be discussions about a way forward to achieve a two-state solution.  And the Prime Minister has said that he wants — you can ask him if he’s going to talk to Abbas.  I’m not going to put words in his mouth.

But what I’m trying to say, Jennifer, is that we share a common way forward. And our hope is, is that others in the region understand that this way forward leads to peace.  People other than President Abbas and the Palestinians — we would hope that the Arab world supports such a concept.  Inherent in that is Israel’s right to exist.  There needs to be solid recognition of this state’s right to live in peace.

At the same time, we want to have a vision for the Palestinians to see that there’s a better tomorrow for them.  These folks have been denied for a long period of time the right to a normal life, starting with leadership that failed them.  And our hope is that President Abbas and that Prime Minister Fayyad, who is a good fellow, will be strengthened to the point where they can lead the Palestinians in a different direction, with a different hope.

The Prime Minister has spoken to me, and I have spoken to him about our desire to help suffering Palestinians.  Nobody likes suffering on their border, nobody likes to see suffering in the world.  So we’ll talk about that. We’ll also talk about the broader war against extremists and radicals.

It’s interesting that extremists attack democracies around the Middle East, whether it be the Iraq democracy, the Lebanese democracy, or a potential Palestinian democracy.  And what that should say clearly to people all around the world is that we are involved with an ideological conflict that is a monumental conflict.  And those of us that believe in liberty and human rights and human decency need to be bound together in common cause to fight off these extremists, and to defeat them.

You can only defeat them so much militarily.  We have to also defeat them with a better idea.  It’s a better idea that’s being practiced by our friend, Israel.  It’s called democracy.  And that’s the fundamental challenge facing this century:  Will we have the courage and the resolve necessary to help democracy defeat this ideology.  And I will tell the Prime Minister, once again, I’m deeply committed to this cause, whether it be in Iraq, or Lebanon, or the Palestinian Territory, or anywhere else in the Middle East, and around the world.

Q    Will you enter into talks with Mr. Abbas?

PRIME MINISTER OLMERT:  Well, naturally, I think at this particular point, I’m sure the President will not have hard work to convince me, because I proposed to meet with President Abbas  — in fact, I initiated the idea that we will meet on a regular basis, bi-weekly, to discuss the matters.  And I proposed that I even come to Jericho, something that no Prime Minister before me did.

The President was having serious difficulties, some of which we have witnessed lately.  And that’s perhaps the reason why he had to cancel some of the meetings.  But there’s no question that I want to talk to the President of the Palestinian community, Mr. Abbas.  I will be talking to him.  The teams of both sides meet regularly every week and discuss on the matters.

And the idea that I have is to talk with him of the current issues that can help upgrade the quality of life of the people and provide them better security in the West Bank, and to share with him the efforts to calm the terror — this is something that he is absolutely committed to doing, we have to do it, and this is not something that the Palestinians can escape.  They will help fight terror in a most effective way — something that they haven’t done, unfortunately, up until now.  But this is something that I am sure he understands is a prerequisite for any major development in the future.

Of course, we also have to talk about a groundwork that needs to be done in order to allow us rapidly to talk about the creation of a Palestinian state. This is the main vision of my friend, President Bush.  This is the vision that we share.  This is the ultimate goal, to create the Palestinian state.  We have to prepare the groundwork that will allow — soon, I hope — to be able to start serious negotiations about the creation of a Palestinian state.

In order to achieve peace, we have to fight terror, we have to increase security, we have to upgrade the quality of life for the Palestinians.  And, of course, the Palestinians have to establish a much more credible and serious administration that will be able to take care of daily needs in an appropriate manner.

Q    Thank you.  (Speaking Hebrew.)

And, Mr. President, the Prime Minister —

PRESIDENT BUSH:  What did you just ask him?

Q    I asked him what —

PRESIDENT BUSH:  — that’s unfair.  (Laughter.)

Q    I asked him what he will do with the refugees coming from Gaza?  Will you deliver to the murderers guns, or will they be taken to a refuge in the West Bank?

And I would like to ask you, the Prime Minister of Israel calls for negotiation with no precondition with Syria; so does President Assad of Syria, and he asks for U.S. mediation.  Will you do it?

PRESIDENT BUSH:  They can handle their own negotiations with Syria.  If the Prime Minister wants to negotiate with Syria, he doesn’t need me to mediate.

Q    Do you think it’s a good idea?

PRESIDENT BUSH:  It’s up to the Prime Minister.  I haven’t had a chance to talk to him about that.  I don’t know if you’re putting words in his mouth, or not.  But I’m looking forward to having a discussion about Iran and Syria and the neighborhood.  But this man is plenty capable of conducting his own negotiations without mediation.

PRIME MINISTER OLMERT:  I will answer your question, right?  We have been very, very attentive to the needs of the — humanitarian needs of Gaza and we will continue to provide everything that is necessary in order to meet these humanitarian needs.  Israel will not be indifferent to the human suffering in Gaza.  Israel will be different from the Palestinians, themselves, because the reality is that all this suffering is caused by Palestinians against their own people.  What the Hamas was doing in Gaza is absolutely atrocious and intolerable.  And I’m sure that many who had some hopes that maybe Hamas can be more reasonable and more restrained I think lost these hopes because of what they have been doing to their own people — killing innocent civilians, pulling out from hospital beds Fatah people that were wounded and dropped them off fifth story building to kill them in the street, and terrible other things.

We will not be indifferent.  We already are taking care of many of the Palestinians in Gaza during the last few days, and we will continue to deal with it as it comes.  Of course, they are not interested in staying in Israel, they want to be amongst Palestinians, and they will be treated in this manner.

Q    So you will let them go?

PRIME MINISTER OLMERT:  So as I said, we will check every single case and we’ll see how we can help them and I’m sure that we will help them.

As for Syria, I’m afraid that you may have not have understood correctly what the Syrian leader said.  The Syrian leader said that he is against any preconditions from the Israeli side, but he’s certainly for preconditions from the Syrian side.  One of the preconditions is that he wants President Bush to work more than he does already in regional issues and to be the mediator.  And the President said correctly, this is not the — I think — the job for the President of the United States.  He’s got many other things to do.  And I don’t think, if someone wants to speak directly, he needs the involvement of America in order to allow these negotiations to take place.

I am not certain that the understanding of the President of Syria can lay the foundations for immediate discussions between Syria and Israel.

PRESIDENT BUSH:  Matt.

Q    Mr. President, with Hamas’s takeover of Gaza, aren’t you effectively accepting a split between the two main Palestinian territories? And how big of a blow is this to your vision of achieving agreement before the end of your term for a Palestinian state and Israel living side-by-side in peace?

PRESIDENT BUSH:  First of all, we recognize the President of all the Palestinian people, and that’s President Abu Mazen.  He was elected; he’s the President.  Secondly, we recognize that it was Hamas that attacked the unity government.  They made a choice of violence.  It was their decision that has caused there to be this current situation in the Middle East, about which we’ll be spending some time discussing.

Matt, what you’re seeing now in this part of the 21st century is going to be played out over time.  This is an ideological struggle.  We’re looking at the difference between a group of people that want to represent the Palestinians who believe in peace, that want a better way for their people, that believe in democracy — they need help to build the institutions necessary for democracy to flourish, and they need help to build security forces so that they can end up enforcing what most of the people want, which is to live in peace — and that’s versus a group of radicals and extremists who are willing to use violence, unspeakable violence sometimes, to achieve a political objective.

And the challenge is, for those of us who believe there’s a — democracy can help yield the peace is to continue to move forward.  And that’s what we’ll be discussing about today, how to do so.  The Prime Minister said he’s willing to have discussions with the forces of moderation in the Palestinian   Territory, laying the groundwork for serious discussions.  That’s — that is a statement that shows that the Prime Minister is willing to move with a — to promote an alternative vision.

You know, the world is going to be confronted with these choices:  Are you willing to accept the fact that extremism is around and is willing to promote violence, or should we resist that?  Should we not combine forces and efforts to promote alternatives to this vision?  That’s precisely what we’re doing in Iraq.  We strongly believe it’s in the world’s interest to support this young democracy.  Al Qaeda, the people that killed nearly 3,000 of our people here in the United States, are conducting major car bombs and acts of unspeakable violence in Iraq, trying to drive us out, because they want to impose their vision on the Iraqi people.

And so, Mr. Prime Minister, I’m committed to helping the Iraqis succeed with a democracy.  It’s in the interest of the Middle East that this democracy succeed, as an alternative, because if we were to fail, then all of a sudden, these extremists would have safe haven.  Extremists in the Middle East would be emboldened by the failure of those of us who live nice, comfortable existences not help those who are struggling for freedom.

So it’s the great challenge of our time, Matt.  And there will be forward movement and there will be setbacks.  The fundamental question facing those of us who have offices, is do we have the determination and the will and the vision to present an alternative to these people, and I believe we do.  And I believe that’s the calling of our time.

And so that’s why I’m excited to be talking about it with a man who shares the vision that there is a better way than to accommodate and accept extremism and radicalism.

Q    Mr. President, question.  Regarding the ongoing attempts by Iran to acquire nuclear capability of atom bomb, would you — are you willing to say at this time that a military action against Iran is no longer an option in light of the situation?

PRESIDENT BUSH:  I will tell you this, that my position hasn’t changed, and that is all options are on the table.  I would hope that we could solve this diplomatically.  And that’s why the United States — first of all, we take the threat very seriously.  And I fully understand the concerns of any Israeli when they hear the voice of the man in Iran saying, on the one hand, we want to acquire the technologies and know-how to build a — enrich uranium, which could then be converted into a nuclear weapon, and on the other hand, we want to destroy Israel.  Look, if I were an Israeli citizen I would view that as a serious threat to my security.  And as a strong ally of Israel, I view that as a serious threat to its security — not only the security of Israel, but the security of the Middle East.

That’s why we are constantly working to remind our European friends, as well as Russia and other members of the U.N., we have an obligation to see if we can’t work together to solve this issue diplomatically.  That means to provide consequences to the Iranian government if they continue to pursue a nuclear weapon, such as financial sanctions, or economic sanctions.  We want there to be a choice.  We want people to see there’s — in isolation there’s got a consequence to it, that there’s a price that’s paid for this kind of intransigence and these threatening tones.

And it’s difficult work to keep the nations bound together to help deal with this issue diplomatically, but we have done a pretty good job so far.  Now, whether or not they abandon their nuclear weapons program, we’ll see.  But at least we got unanimity so far, speaking — at the U.N. Security Council — speaking pretty clearly that there will be consequences.  And there are being consequences, economic consequences beginning to affect the economy.

Look, the Iranian people don’t need to live under this kind of conditions.  These are proud people with a great tradition.  Their government can do better for them.  And threatening the world has caused there to be isolation.  And these good folks could have leadership that enables them to have a better economy and a better way of life, an economy and a way of life that enriches their families, that gives them a better chance to succeed.  But, no, this group of people have made a different alternative, and now our job is to make sure that we continue to keep the pressure on.

Listen, thank you all very much.