QUESTION: You are a Russia expert, and it looked like about ten years ago --

SECRETARY RICE: I used to be. (Laughter.)

QUESTION: Well, it looked like about ten years ago that that was an obsolete profession, but now it's come -- Russia has come roaring back with Putin and the price of oil. Can you sketch out for us what you foresee over the next few years, the challenges that Russia is going to pose to U.S. foreign policy, with particular emphasis on Russia's growing closeness to China and other oil -- and oil-producing states that aren't democracies.

SECRETARY RICE: I actually probably I see less potential for some kind of China-Russia axis than sometimes is (inaudible). China and Russia have a number of their own problems among them -- between them. And so -- but there's no doubt that Russia poses certain challenges.

And I would make three points. The first is on global issues. We actually do relatively well with Russia, whether it's global terrorism or the work we've done on global nuclear threats, or whether it is the work that we've done on North Korea, and even Iran frankly where, with Iran you've got -- we and the Russians may disagree from time to time about tactically how fast or how deep sanctions ought to be, but the Russians have signed on to the two-track, negotiate and still keep the UN track open -- and that's why we've had two unanimous resolutions. And so I think even on something like that where there may be some differences tactically, I think we and the Russians are essentially in the same place.

Now, where it becomes more difficult is when you're dealing with issues that are associated somehow with the territory that used to be part of the Soviet Union, so -- or part of the Warsaw Pact, where I think there is still Russian sensitivity that tends to see things more in a zero-sum way with NATO enlargement or with our efforts in Central Asia. There, I think we do tend to get into some conflicts that have to do with Russia in a sense re- -- or determining again what its interests are in that region. There was a period of kind of freefall in terms of Russian interests back in the '90s where it wasn't really clear how Russia thought of itself.

Then you've got questions of Russian internal politics and some of the aspects of the state control of oil and gas resources that is linked up with the concentration of power in the Kremlin in a way that I think is troubling. And there, it's not just the United States. It's Europe that has really significant concerns about how that is playing out.

And that probably is going to be the biggest challenge. I think you can work issues of where missile defense capabilities are deployed or we can work issues of how fast you get a -- you know, an Iran resolution this time or -- because I don't have any doubts about Russian concern about the Iranian behavior at this point. I have no doubts about their concerns about it and their desire to do something about it.

But when it comes to the domestic landscape and the use of oil and gas for political purposes, that's going to be very hard. And in many ways, it's harder for Europe, which is increasing -- more dependent on those sources of energy than we will ever be.

I was recently -- when I was recently in Russia, I met with a lot of young people and it was really quite interesting. I mentioned how television -- I was a graduate student in Russia in '79 and I mentioned how the television looked a little bit familiar to me from another time. And their reaction was, who watches television?

They're on the internet. And so the ability to control information and resources I think is somewhat more limited than the Russian Government may realize. The hottest thing that they have in Moscow is a 30-year mortgage. (Laughter.) And that's a group of people that are going to have certain political interests with this growing entrepreneurial and business class and so forth. Right now, I think Russians are just grateful for economic and greater political stability given that the '90s were pretty rough.

But I don't rule out significant pressures from below on a political system that I think is going in the opposite direction of where the population will ultimately end up. But yeah, it's going to be a challenge.