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PRESIDENT BUSH: Thank you for coming. The Chancellor and I had a series of discussions on important subjects, starting with a dinner we had last night. And then we got up this morning and had the wonderful opportunity to walk across some of the ranch. It was a glorious morning. The sun was beginning to rise, the birds were beginning to chirp. And we were able to have a meaningful discussion on a lot of issues. And then we completed our discussions here in what is my office.

Madam Chancellor, I’m really glad you gave me an excuse to come down to Texas. And I’m really glad you and Professor Sauer came. You can imagine how conducive it is to have meaningful, strategic discussions in an environment outside of our respective capitals. And that’s what we did.

We discussed Afghanistan. I do want to thank the German people for their strong support of this young democracy. And I appreciate the German troops who are far from home who are helping people realize the blessings of liberty.

We discussed Iran and our deep desire to solve this important issue diplomatically. And I believe we can solve it diplomatically, and it is more likely we do so when the United States, Germany, and other nations work collaboratively to send a common and firm message to the Iranians that it is — the free world does not think you should have the capacity to be able to make a nuclear weapon. And we will work according — together accordingly.

We talked about Iraq. I want to thank Chancellor Merkel for understanding that success in Iraq is important for Middle Eastern peace. I fully understand that our nations have had difference of opinion on this issue, but now that this Iraqi democracy is emerging, I really appreciate the fact that Germany has been a constructive partner in the Compact — constructive partner with Iraq in the Compact. And I appreciate very much the fact that the German government is committed to help train police in the UAE.

I want to thank the Chancellor for her clear vision on issues such as Kosovo and Burma and Lebanon. We discussed the Middle Eastern peace. The upcoming Annapolis conference is an important moment as we head toward two states living side by side in peace.

We had a very good discussion on Doha, and the need for Germany and Europe and the United States to work closely together with developing nations such as Brazil and India to advance the Doha Round. I appreciated very much the Chancellor’s briefing on her trip to India. It helps a lot for those of us who are engaged in international politics to get advice from people who have seen firsthand the attitudes and — of important players such as India.

And finally, we had a meaningful and long discussion on climate change. And once again I assured Angela that I care deeply about the issue; that the United States is willing to be an active participant and try to come up with solutions that bring comfort to people around the world; that it is possible to have the technologies necessary to deal with this issue without ruining our economies. It’s hard to deal with the climate change issue if you’re broke. It’s easier to deal with the climate change issue if you’ve got the revenues and finances that enable you to invest in new technologies that will change how we live, and at the same time enable us to grow our economies, and at the same time enable us to be good stewards of the environment.

And so, Madam Chancellor, the mic is yours.

CHANCELLOR MERKEL: (As translated.) Well, yes, thank you very much, Mr. President, dear George. First of all, allow me to thank you very warmly for the possibility to meet with you here in Texas and to have this exchange of views. I would also like to extend this word of gratitude to you on behalf of my husband, who accompanies me here to this, what we also in Germany would call a very beautiful spot, a very beautiful part of this planet, of this world. It enables us to appreciate a little bit the vastness of the territory here, and also the beauty and the sheer variety of species that you have here.

So we again were able to see this for ourselves this morning. Thank you again for making this possible to have this stroll with you and to appreciate the beauty of this part, and to have again an exchange of views on a number of subjects.

PRESIDENT BUSH: Jawohl. (Laughter.)

CHANCELLOR MERKEL: (Translation continues.) Let me say, first of all, that we did make the best possible use of our time to exchange our views on a number of issues. We did talk about Afghanistan, as the President already said, where we just recently were, and where we say that together with the Afghan government, we need to do more in order to help them continue to build up the police and to continue to also build up the army there, improve that, and go on with the training that we have already embarked on.

We addressed the issue of Iran. We were at one in saying that the threat posed through the nuclear program of Iran is indeed a serious one. We both share this view, but that we also were of the opinion that we think that this issue can be solved through diplomatic means; that the next step, then, obviously, would be a resolution. There is already work underway to prepare for this next step.

We have also been very clear in saying that if the talks with the representatives of Iran and Mr. Solana, as the representative on the European Union side, do not yield any results, then further steps will have to be made. Also, if the reports remain unsatisfactory that the International Atomic Energy Organization puts on the table, unsatisfactory, we need to think about further possible sanctions. And we do not only need to think about them, but we also have to then talk and agree on further possible sanctions, if all of these conditions are [not] met.

We then also said that Germany needs to look somewhat closer at the existing business ties with Iran. There are certain companies that have business with Iran. We have already done that. And we need to look, as the situation unfolds, whether we have to have a closer look again at that, and possibly need to work together with our German business community. I will talk with them again on further possible reductions of those commercial ties, as we have already launched that in that tendency already now.

We then addressed the issue of the Middle East. And I said that it is in the interest of the German government, and we will indeed do everything we can to support all of the efforts that the American administration is making in order to turn the upcoming conference in Anapolis into a success. We want the peace process to make progress, and we think that the conference, the upcoming conference in Anapolis is indeed a possibility to bring this success about.

We then had an exchange of views on the current situation in Lebanon. Germany having a contingent there, serving with the UNIFIL mission, obviously has a very great interest in seeing the situation there stabilizing and progress being made in that country. And also we assured the government of Mr. Siniora of our continued support. We would like to — for his government to be a strong one, and we think it is in our interests, in both of our interests that this situation remains stable.

On Kosovo, we did discuss this issue, as well. There are currently talks going on, and indeed those talks are heading into a crucial phase. We call at this point in time on both the Kosovo side and the Serbian side to try their utmost to bring about a sensible solution to the problem there — and what we can do to foster that, we will do.

We did discuss also — the President raised this issue also with me of the world trade round. We then discussed also the issue of the United Nations reform of the Security Council, and there we do think that it will be necessary to have further exchanges on that particular issue, and we do hope that — some progress has been made already in this respect, and we hope further progress will be underway. We’re going to continue to talk about that.

We then obviously also discussed the issue of the upcoming climate conference in Bali. And I think that this is a very good chance of turning this conference into a success. There are a lot of things where the U.S. and the European Union share views, where we are at one, and where I think that possibilities for cooperation may unfold. There are still — there are also areas where we do not completely agree yet, where there are differences of opinion, but I think that this is a very crucial time to really set the agenda for a post-Kyoto regime. And we do hope and we will do everything we can in order to turn this conference in Indonesia into a success.

PRESIDENT BUSH: Two questions a side. John Yang.

Q Mr. President, this morning, Benazir Bhutto said that the Pakistani people’s passion for liberty is threatening to explode. First, have you had any more further discussions with General Musharraf? And are you concerned that the continuing unrest within Pakistan is distracting that country’s leadership and military from the struggle against the Taliban and al Qaeda?

PRESIDENT BUSH: First on al Qaeda, we do share a common goal, and that is to eradicate al Qaeda. That goal obviously became paramount to the American people when al Qaeda killed 3,000 innocent souls on our soil. And since then, the United States of America, along with strong allies and friends, has been in pursuit of al Qaeda.

I vowed to the American people we’d keep the pressure on them. I fully understand we need cooperation to do so, and one country that we need cooperation from is Pakistan. That cooperation has been made easier by the fact that al Qaeda has tried to kill leaders in Pakistan several times. And so we share a common goal.

Secondly, we share a goal with the Pakistani people, and that is to live in a free society. I haven’t spoken to President Musharraf since I did earlier this week, but he knows my position, and he knows the position of the U.S. government. I do want to remind you that he has declared that he’ll take off his uniform, and he has declared there will be elections, which are positive steps.

We also believe that suspension of the emergency decree will make it easier for the democracy to flourish. And so our message is consistent and clear. Our message is also clear to al Qaeda: We will find you and we’ll bring you to justice before you can hurt innocent people.

Q Mr. President —

PRESIDENT BUSH: It’s good to see you again.

Q Thank you very much.

PRESIDENT BUSH: You’re looking like a cowboy.

Q Yes, well, I try. The boots are missing.

PRESIDENT BUSH: Yes, okay. (Laughter.)

Q But, Mr. President, is it right to say that you have much more a multilateral approach towards the solutions of the problems of the world than you had maybe two years ago?

And the question to both of you: How much patience do you have with Iran? When is the time when diplomacy doesn’t work anymore? And do you think that the Chinese and Russian government is doing enough in the Iran crisis?

PRESIDENT BUSH: I felt I was pretty multilateral the first four years of my administration. After all, I went to the United Nations on the Iraq issue and on the Afghanistan issue, and said, we got a problem; let’s work together to solve it. I would like to remind you that U.N. Security Council Resolution 1441 was unanimously approved by 15 nations, and the declaration was, disclose, disarm, or face serious consequences. And in the case of — in that case, the tyrant didn’t disclose and so he faced serious consequences.

I happen to be the kind of person that when somebody says something they better mean what they say. And although some nations didn’t agree with that, there was a multilateral effort in Iraq from the get-go, and there’s been a multilateral effort since the fall of Saddam Hussein. And it’s important for the multilateral effort to continue because democracies are the great alternative to the tyrannies espoused by cold-blooded killers, such as al Qaeda.

Now, on Iran, what the Iranian regime must understand is that we will continue to work together to solve this problem diplomatically, which means they will continue to be isolated. And what the Iranian people must understand is that we respect their heritage and respect their traditions, respect their potential, but it’s their government that has made the decisions that are denying them a bright future. And so we’ll continue to work very closely together.

And finally, I don’t feel comfortable answering your hypothetical question as to —

Q China and Russia?

PRESIDENT BUSH: Oh, excuse me, that’s not hypothetical. I thought you were saying, how long. Yes, well, that falls in the hypothetical category.

China and Russia, we working hard with them. My last visit with the Chinese President was in Sydney, Australia, and I told him the top of my agenda is Iran. And I fully understand that China has got energy needs, but a sure way to disrupt energy supply not only in Iran and the Middle East, if the Iranians were to develop a nuclear weapon and decided to do something with it. And so, therefore, now is the time to solve the problem.

And I had a good talk with Vladimir Putin on the very same subject. He understands that a nuclear-armed Iran will be dangerous to his security and the security of the world. And no responsible leader wants the Iranians to be able to threaten world peace.

CHANCELLOR MERKEL: (As translated.) Well, the next diplomatic step, after all, has already been devised, has already been envisaged, and is there to be taken, as it were. But for this next diplomatic step to work we obviously then again will need the engagement, we will need the support of both China and Russia. And let me say that I am deeply convinced that if the Security — if the United Nations Security Council were then to announce sanctions, that this would be the clearest message that you can get, that you can send, and the clearest message that you can convey to Iran, irrespective of the possibilities, obviously, of inpidual countries also sending that clear message, European countries, as well. But I think at least that is true for me, at the center of all of our efforts has to be sanctions that will then be called by the United Nations Security Council.

Let me say also that I’m deeply convinced that the diplomatic possibilities have not yet been exhausted, diplomatic possibilities are there; that we can solve this by using diplomatic means, and also we want to solve this by diplomatic means.

PRESIDENT BUSH: Steven Lee Myers. Would that be you?

Q Thank you.

PRESIDENT BUSH: Step forth, Steven Lee.

Q I wanted to follow up a bit on Pakistan, if I may.

PRESIDENT BUSH: Sure.

Q Are you at all concerned that General Musharraf may not live up to the promises that you said he’s made to you? And are you concerned, as Secretary Gates suggested yesterday, that the distraction, the internal turmoil in Pakistan is actually — or could have an effect on the effort in Afghanistan? Thank you.

PRESIDENT BUSH: Thank you, Steven Lee. I take a person for his word until otherwise. I think that’s what you have to do. When somebody says this is what they’re going to do, then you give them a chance to do it. I can tell you this, that President Musharraf, right after the attacks on September the 11th, made a decision, and the decision was to stand with the United States against the extremists inside Pakistan. In other words, he was given an option: Are you with us, or are you not with us? And he made a clear decision to be with us, and he’s acted on that advice.

I want to remind you that if you’re the chief operating officer of al Qaeda, you haven’t had a good experience. There has been four or five number threes that have been brought to justice one way or the other. And many of those folks thought they could find safe haven in Pakistan. And that would not have happened without President Musharraf honoring his word.

He fully understands the dangers of al Qaeda. Benazir Bhutto fully understands the dangers of al Qaeda. By far, the vast majority of people in Pakistan want to live in a free and peaceful society, and they understand the dangers of al Qaeda, because al Qaeda is a group of ideologues who murder innocent people to achieve their political objectives.

And so I believe that we will continue to have good collaboration with the leadership in Pakistan. My concern is for the Pakistani democracy, for the sake of the Pakistani people, proceed as — back on track as quickly as possible. President Musharraf said that he would take off his uniform; he said there will be elections after the new year. And our hope is that he would suspend this emergency decree to allow this society, which is on the path to democracy, to get back on the path to democracy.

And I think about this issue a lot. One of the things that I pledged to the American people is that we will continue the hunt for al Qaeda leadership. They’re still plotting and planning attacks on the United States of America. And our most important responsibility is to protect the American people from attack. I will also remind people that the great alternative to their vision — their dark, dim vision for humanity — is freedom. Freedom has got the capacity to turn enemies into allies. Freedom has got the capacity to bring peace. And that’s why the work to help these young democracies is vital work for the peace for our children and grandchildren.

And that’s why I applaud the Chancellor’s efforts in Afghanistan, and her concerns about the democracy in Lebanon, and her desire for there to be a Palestinian democracy, and to help — the willingness to begin to help this young democracy in Iraq. It’s all part of this global struggle against extremists and radicals who murder people, who will kill people to achieve their objective. And the fundamental question is, will free societies have the will, the courage and the determination to stand up to them? And one of the things I have found in this leader is she does have that vision. And I appreciate it a lot.

Q It’s on reforming the United Nations. Could you tell us please, both, what kind of progress that you made in your talks on this issue. And more specific to you, Mr. President, the German government in the past frequently declared to be ready to take more responsibilities within the United Nations, including a permanent seat in the Security Council. So far you haven’t been very positive on that. Tell us why.

PRESIDENT BUSH: (Laughter.) You’re right, I’ve been studiously noncommital. I have taken a position, which is the long-held position of U.S. governments, and that is, Japan should have a seat. Beyond that, I’ve made no commitment, except this: that we’re for U.N. Security Council reforms, and that I’m willing to listen to good ideas. And Angela brought up some good ideas today. And so —

Q — (inaudible) —

PRESIDENT BUSH: It’s up to her to tell you. I don’t like to put words in leaders’ mouths. I don’t particularly like it when people put words in my mouth, either, by the way, unless I say it. But she can tell you what she came up with.

But I will tell you that it intrigued me, and my — as I said — listen, I stood up in front of the U.N. and said precisely what I’m telling you now, that we’re open-minded. There’s a good non-answer for you. (Laughter.)

CHANCELLOR MERKEL: (As translated.) Well, from my side, the people who know me know me as a person who is sort of success-oriented, in the sense that I don’t think one ought to comment each step on the way towards a success. But the message that I received today, and that was a very heartening message, was that the President and the administration of the United States are interested in the reform of the U.N. Security Council. And in this overall complex of issues that relates to that, they will also, obviously, be of interest who will then be the members of that reformed Security Council.

I, for me personally, see this issue of a Security Council reform to be a very important one. But what is also important, obviously, is to try to enlist the support of the other very important countries who are members of the Security Council, and particularly those countries that have veto powers in the Security Council, to see to it that they have also a great interest in seeing the Security Council reformed.

So in this overall context, it has certainly been a good message that I heard today, that there is also an interest in that. Here I found this with the President today. And now we will have to keep an eye on further steps to be taken along the way in order to achieve that goal. We will try and find allies for this cause. And again, it is in Germany’s interest, as I said previously in public, to have a permanent seat on the Security Council. We will not call on each and every country that we talk to, to comment on each and every step along the way. We’re going to continue to work towards reform. And I think it is of the essence that we have heard here today, and this is why this was such an important message. That is not only in the interests of Germany, but is also an interest that was explained to us here and clearly stated by the U.S. administration.

PRESIDENT BUSH: I’m now going to go feed the Chancellor a hamburger. (Laughter.) Right here, Crawford, Texas. No, well, I mean back over there. Thank you all.

CHANCELLOR MERKEL: Obviously, for me, as a person who originally came from Hamburg —

PRESIDENT BUSH: Yes.

CHANCELLOR MERKEL: — it’s even more important.

PRESIDENT BUSH: Hamburger.

Thank you.

Chancellor Merkel: Thank you.

END 12:16 P.M. CST