QUESTION: Madame Secretary, given the circumstances I should be talking foreign policy, but let's start with domestic policies of this country. This has been a week of a substantial price rise in this country -- breads and milk primarily. Now, world deficit of wheat is blamed for this thing and this deficit in turn is explained by the U.S. initiatives, the U.S. fuel (inaudible) to produce biological fuel. Now, it certainly does sound superficial, but how do respond to critics that say that these U.S. initiatives lead to food deficits in developing countries?

SECRETARY RICE: Yes, well, clearly we are going to need alternative fuels because of the need for a clean energy supply. But ethanol is made from a number of different products. Corn is only one product, and in the United States it is made from corn. But it is really not as widespread a use in the United States. In Brazil, it's from sugarcane. And the future really in ethanol production is going to be in the use of switchgrasses and cellulosic -- as it's called -- ethanol. So the price of food, the need for food, I think is not going to be harmed by the need for alternative fuels.

QUESTION: Well, we'll come back to this issue 20 years later. Back to what you had to discuss in this country today.

Now, President Putin this morning urged you to not to force a planned deployment of the radar in Czech Republic and (inaudible). Will you not?

SECRETARY RICE: Well, we are working with our Russian colleagues. We believe that there is room for a cooperative arrangement on missile defense. Of course, from our point of view, we must continue our discussions with the Czechs and the Poles. But we are determined, and we really do believe that we can, to convince Russia that there's nothing about this system that is anti-Russian. It is aimed at other threats, particularly the kind of increasing or emerging long-range missile threat from countries like Iran.

We need to get started on missile defense deployments because these are threats that are not too far in the future. But we want to work cooperatively, and we're looking very favorably at a number of ideas that President Putin has put on the table about where other missile defense sites might be located.

QUESTION: Now, President Putin, when he refers to such countries developing intermediate-range missiles, I think what he had in mind was North Korea and Iran which are on the borders of Russia, so for Russia it's obviously a threat today. At the same time, this Wednesday was his (inaudible). It was this Wednesday, at the joint press conference with President Sarkozy, he has said that Moscow has no evidence that Iran is trying to build a nuclear bomb. Russian (inaudible) experts, interviewed by (inaudible) programs (inaudible) Iran has -- is not capable of producing missiles which would be reaching the States or Europe. Why is America so concerned then? Is it sort of a preemptive awareness?

SECRETARY RICE: Our threat assessment is simply a bit different on Iran. Now, we do agree that Iran is trying to increase its missile range. So we agreed that they are in the act of doing so.

QUESTION: But you said it's (inaudible).

SECRETARY RICE: We and Russia agree that they are enhancing their range or attempting to enhance it. At what point they reach a specific range, there is some disagreement. But our point is that we need to get started now on the ability to defend against what is an emerging threat.

As to Iran's capability of building a nuclear weapon itself, we're at a stage with Iran where our principal concern is that they will acquire the technology that can easily then be used to develop a nuclear weapon. It's not a question of whether Iran has a nuclear weapon today. It is a question of enrichment and reprocessing capability, the so-called fuel cycle, which can be turned to the use of nuclear weapons just as it can be used for civil nuclear power.

I think we and Russia have cooperated very well together within the context of the six parties and we have a way forward that we agreed at New York. That way forward is to give every chance and support to the efforts of Mohamed ElBaradei to resolve outstanding issues on Iran's programs. It is to give support to Javier Solana to have further discussions with their National Security Advisor, Mr. Larijani. And it is to, should Iran not take advantage of those efforts to negotiate, to have a finalized Security Council resolution that can be passed in New York to show Iran that there is no other choice but to come to the negotiating table, suspend their program and to get about the business of getting civil nuclear power, if that's indeed what they want.

QUESTION: But you sound patient. Are you?

SECRETARY RICE: Well, we have to be. We have to some urgency about this because Iran is continuing its activities. But the President -- President Bush has made very clear that he is dedicated to a diplomatic course. We have to know that the diplomatic course has to have real substance. It has to have, in a sense, teeth. Iran has to know that if it does not adhere to the international demand, then there are going to be consequences for that.

I'm encouraged by the fact that we've had two Chapter 7 Security Council resolutions that were unanimous. That clearly got Iran's attention. We need to prepare and vote a third resolution if Iran is not prepared to carry out its obligations.

QUESTION: Now, may I confess that I am one of those dreamers who think that the time has come for Russia and the States to overcome forced compromise and to become true allies, given the common threats we face, these two countries.

Now, isn't this -- isn't the very proposal by President Putin to jointly operate Gabala in Azerbaijan a first step toward this (inaudible) cooperation, which would, you know -- we could put different, you know, items on this global agenda -- energy security, you name it. But this is a real chance. Why not use it?

SECRETARY RICE: Well, this is our vision, too. And it's certainly the vision of President Bush. And I felt that the presidents had a joint vision when they were together at Kennebunkport of exactly the kind of cooperation that you're talking about. And yes, we believe that the potential for the use of site radar in Azerbaijan ought to be fully explored. It could be a very important step. It probably is a very important step in a range of cooperation. But we need more. We need to look at the full range of capabilities that we would need with missile defense to deal with the joint threats that we do face from North Korea and from Iran.

QUESTION: If capitalized, modernized and updated, could it substitute your plans for Poland and the Czech Republic?

SECRETARY RICE: Well, we don't believe that it would be a substitute, but we do believe that we ought to work on a regional architecture that would be a joint cooperative architecture. It could include, for instance, as we talked to our colleagues today, people, Russians, stationed at American and European sites, American specialists stationed at Russian sites.

QUESTION: Including the new ones in the Czech Republic and Poland?

SECRETARY RICE: Including -- obviously, we would be willing to consider such. It ought to include more shared data analysis and technical monitoring. Other proposals of this kind should be able to move us forward. But the key is the point that you made. We share great global threats. We share common threats. I was a student of the old relationship between the Soviet Union and the United States. We really didn't have much --

QUESTION: How do you call yourself these days -- a Sovietologist?

SECRETARY RICE: Well, we've dropped that term, clearly. I'm very pleased that I also had firm grounding in the study of Russia. And I think for all of us, we see a tremendous evolution from the time when really about the only thing we had in common with the Soviet Union was we didn't want to annihilate each other. And so all of our interactions, our military interactions, had that character to them. We had to be suspicious of each other. We were each other's great enemy. We were each other's great threat. That isn't the case today. And so the architecture that we develop should reflect the fact that we're no longer adversaries and that we're facing common threats.

QUESTION: Lastly, imagine that there's no compromise between Russia and the States this time around. Duma's foreign affairs committee has already said that there's a chance for a late -- actually, recommended that Russia withdrew from the Conventional Armed Forces Treaty in Europe. President Putin has indicated that Poland and Czech Republic risk being targeted by Russian missiles, should they agree to host the U.S. defense system. Are you -- aren't you afraid of such a response?

SECRETARY RICE: Well, I think we don't have to be in that situation. I don't think we have to get into a situation in which we go back to threats against one another. There is, I am quite certain, a cooperative path that can be pursued, if we wish to do so. And the Russian Federation has nothing to worry about in terms of degrading its strategic deterrent somehow. Nine interceptors in Poland, a few radars in the Czech Republic -- this isn't going to degrade the Russian strategic deterrent.

We fully accept that if Russia chose to overwhelm such a system, it could do so any -- in no time. That's the point. This system isn't aimed at Russia. It is aimed at threats like Iran. I will tell you a little story. When North Korea tested its missile and then later on tested a nuclear weapon, we were all searching around to see what capabilities we might be able to use if, in fact, North Korea fired a live missile at one of us.

I don't want to be in the position of searching around to try to find a way to deal with that situation with Iraq or with North Korea. What we can do is we can work on a cooperative architecture that allows us to use technology to deal with those threats. We can do what we are doing together to try to get Iran to take a different course with its nuclear program. We can do what we're doing with North Korea in the six-party talks to get North Korea to denuclearize. And together, I believe that we can -- as we have been doing on threats of global nuclear terrorism, for instance, we can build a much safer world together. That should be the vision for Russia and the United States today.

QUESTION: Madame Secretary, thank you so much, indeed.

SECRETARY RICE: Thank you.