The President's News Conference

SITUATION IN IRAN

THE PRESIDENT. Since last November, 53 Americans have been held captive in Tehran, contrary to every principle of international law and human decency. The United States began to implement a series of nonviolent but punitive steps, designed to bring about the release of our hostages.

In January, we received information and signals from the Iranian authorities that they were prepared to enter into serious discussions to bring about the release of the hostages. At that time the United States decided to defer additional sanctions, and then these discussions resulted in commitments from the top authorities in Iran, including a transfer of the hostages to Government control, to be followed by their release.

These commitments were not fulfilled. Earlier this month, April the 7th, I announced a series of economic and political actions designed to impose additional burdens on Iran because their Government was now directly involved in continuing this act of international terrorism.

This process is moving forward. We've imposed economic sanctions, and we have broken diplomatic relations with Iran. Recently a number of other nations have recalled their ambassadors, and these countries are now considering sanctions they may be prepared to invoke in the near future.

Even while these deliberations continue, officials in Iran talk about not resolving the hostage issue until July or even later. We are beyond the time for gestures. We want our people to be set free. Accordingly, I am today ordering an additional set of actions.

First, I am prohibiting all financial transfers by persons subject to the jurisdiction of the United States to any person or entity in Iran, except those directly related to the gathering of news and family remittances to the hostages. ^* As of today, any such transaction will become a criminal act.

Second, all imports from Iran to the United States will be barred.

^*The sentence should end with the word "remittances." [White House correction.]

Third, I intend to exercise my statutory authority to protect American citizens abroad by prohibiting travel to Iran, and by prohibiting any transactions between Americans and foreign persons relating to such travel or the presence of Americans in Iran. Again, this authority will not now be used to interfere with the right of the press to gather news. However, it is my responsibility and my obligation, given the situation in Iran, to call on American journalists and news-gathering organizations to minimize, as severely as possible, their presence and their activities in Iran.

Fourth, I am ordering that all military equipment previously purchased by the Government of Iran, which I had previously impounded, be made available for use by the United States military forces or for sale to other countries.

And finally, I will ask Congress for discretionary authority to pay reparations to the hostages and to their families out of the more than $8 billion in frozen Iranian assets in the United States. These assets will be available to satisfy contract and other commercial claims of American firms against Iranian Government entities and to reimburse claims of the United States for the heavy military and other costs we have incurred because of Iran's illegal actions.

If a constructive Iranian response is not forthcoming soon, the United States should and will proceed with other measures. We will legally forbid shipments of food and medicine, and the United Nations Charter, as you know, stipulates interruption of communications as a legitimate sanction. Accordingly, I am prepared to initiate consultations with the member nations of Intelsat [International Telecommunications Satellite Consortium] to bar Iran's use of international communications facilities.

The measures which I am announcing today are still nonbelligerent in nature. They are a continuation of our efforts to resolve this crisis by peaceful means. The authorities in Iran should realize, however, that the availability of peaceful measures, like the patience of the American people, is running out. I am compelled to repeat what I have said on previous occasions: Other actions are available to the United States and may become necessary if the Government of Iran refuses to fulfill its solemn international responsibility. The American hostages must be freed.

Let me say just a few words about our economy before I answer questions.

THE NATIONAL ECONOMY

We have been going through difficult times with high inflation and with extremely high interest rates. We are taking steps to bring these under control, and we are beginning, after only a month of the anti-inflation programs being announced, to make some progress.

However, we are now entering a very difficult transition period when recent economic statistics suggest that our economy has slowed down and has probably entered a period of recession. I believe that any recession will be mild and short, but I'm deeply concerned about how it affects the people of our country.

When I see automobile plant closings or a sharp drop in housing construction or very high interest rates for farmers during the planting season, I know the pain and I know the disruption and the heartache that lie below the cold statistics. But I also know that we cannot substantially reduce interest rates and we cannot make jobs secure until we get the inflation rate down.

A month ago, I set a series of tough anti-inflation measures. The Congress has been doing an excellent job in carrying out its part by cutting down the prospects for Federal spending, leading toward a balanced budget for next year. If we maintain self-discipline, all of us, this program will work to cut inflation, to reduce interest rates, and to restore the conditions for healthy growth, both in jobs and in economic output.

Certain sectors of our economy, of the American people, are particularly hard hit, and within our budget constraints, we are taking steps available to meet those hard times for them.

For farmers—a new emergency credit bill, higher target prices for wheat and corn, and opening up of farm reserves to those previously unable to participate in the storage of grain. This will provide some relief for them.

For housing, I will support an effort to expand the section 235 program, which will build an additional 100,000 units, again within our budget spending limits.

To sustain employment for autoworkers, we are working to encourage more overseas automakers to invest here in the United States. Honda has already announced a large plant. Just today, the makers of Datsun announced their plans to construct a very large plant in the United States. And I hope to sign a bill soon that will enable Volkswagen to open a plant in Michigan. Between this fiscal year and next, we .are budgeting over a billion dollars extra to provide trade adjustment assistance to tide the autoworkers over until new jobs can be provided for them, as American automobile manufacturers produce more of the energy efficient automobiles which are now in such great demand by the American consumer.

We've been working with the Nation's food and drug chains and we now have more than 6,500 food stores and more than 2,500 drug sales outlets who have committed themselves to voluntary freezing of prices on literally thousands of basic items.

In the last several weeks, interest rates have begun edging down, and yesterday they fell more steeply, but they are still very high. And there will be no substantial nor sustained reduction in interest rates until the growing demand for credit is assuaged and until we get inflation under control.

But—and this is very important—the next couple of months, in spite of the good news recently, we will continue to see bad news on inflation. There are some cost increases still in the pipeline that have not yet been reflected in prices to the consumer. After that, starting early this summer, the chances are very good for a sizable drop in the inflation rate. We should have much smaller increases in energy prices this year compared to last year, and mortgage interest rates should no longer be rising—indeed, I hope to see them fall.

There are no quick and easy answers, but there is no reason for fear or despair. Our programs are good, our American economy is strong and sound, and our people are united and determined to meet these challenges together.

QUESTIONS

IRAN: SANCTIONS, DEADLINES, AND ALLIED SUPPORT

Q. Mr. President, what have you accomplished with these sanctions so far? And have you set a deadline before summer for a new belligerent stand? And also, do you have any reason to believe that the allies are going to back up our actions, or are they fair weather friends?

THE PRESIDENT. From the very beginning of the crisis in Iran, brought about by the seizure of our hostages, I have had two goals in mind from which we have never deviated: first of all, to protect the interests of our country and its principles and standards; and secondly, and along with it on an equal basis, to protect the lives of the hostages and to work as best I could under the most difficult possible circumstances to secure the release of our hostages safely and to freedom.

We have had three options available to us: economic, political, and military. So far, we have only exercised the economic and the political measures—in the Court of Justice, in-the United Nations, in our own economic actions which are now inflicting punishment on Iran's economy, and in the marshaling of support among other countries.

I can't predict to you exactly what other nations will do. In recent days, I have communicated with almost all of the major nations' leaders, asking them to take peaceful action, economic and political, to join with us in convincing Iran that they are becoming increasingly isolated from the rest of the civilized world and increasingly vulnerable to dissension and fragmentation within and to danger from without, particularly the Soviet Union-the north of Iran.

Recently, our allies and friends have withdrawn their ambassadors to decide what they should do in the future. I understand from some of the leaders that next week they will have another meeting to decide what further steps to take, now that Bani-Sadr, the President of Iran, and others have refused to take action to release the hostages after our allies had demanded directly that Iran take this action.

If this additional set of sanctions that I've described to you today and the concerted action of our allies is not successful, then the only next step available that I can see would be some sort of military action, which is the prerogative and the right of the United States under these circumstances.

IRAN: POSSIBILITY OF FOOD EMBARGO

Q. Mr. President, why didn't you embargo food right now, as some of us had been led to believe you had already decided to do?

THE PRESIDENT. We have considered extending the embargo to food and drugs, which is obviously an item that we could include. We, first of all, are complying with the United Nations Security Council definition of sanctions, and we are encouraging, now, our allies to take similar action.

Secondly, because of decisions made by us, the attitude of the American people, the attitude of shippers of food and drugs, this trade is practically nonexistent. As I pointed out to you today, unless there is immediate action on the part of Iran, these items and the interruption of communications are still available to us for a decision by me.

MOBIL OIL COMPANY

Q. Mr. President, after Mobil was cited as out of compliance with voluntary wage and price guidelines, they still received two multimillion dollar Federal contracts. This seems to indicate that sanctions against noncompliance, especially with regard to the oil companies, can be waived. My question, sir, is: Are further sanctions being considered against the Mobil Oil Company and other companies, and if so, when will that announcement come?

THE PRESIDENT. The previous contracts given to Mobil were decided before Mobil was cited by the Council on Wage and Price Stability. Sanctions against Mobil are being considered. We are negotiating now with Mobil on a daily basis to try to force them, through persuasion and because of the pressure of public opinion on Mobil, to refund to the American people the overcharges that resulted from their pricing policies in 1979.

We have not yet been successful in convincing Mobil to comply with these voluntary price standards so important to the American people and, in my judgment, so important to the stature and the reputation of Mobil Oil as a responsible

member of the American economic community.

I cannot predict to you what Mobil will do. If they do not act, we will continue to let the American people know about the irresponsibility of Mobil, and we will also take actions, as necessary, to restrain Mobil, within the bounds of the law, from benefiting from Government contracts.

IRAN: AMERICAN MILITARY OPTIONS

Q. Mr. President, there's been some ambiguity, perhaps partly deliberate, about the circumstances and timing of military measures, if they are to be taken, against Iran. One element of that ambiguity was a remark you made in an interview with the European television last week that suggested that if our allies support us sufficiently in taking sanctions, then it might be less necessary for you to take unilateral military measures. My question is, to what extent does the timing of military measures depend on what our allies do, and to what extent does it depend simply .on the Iranian response?

THE PRESIDENT. It depends on three factors. One is the effectiveness of the accumulation of economic and political sanctions that we have taken against Iran. Secondly, it depends upon the effectiveness of the sanctions to be imposed upon Iran by other nations in the world, including some of our key allies. And thirdly and most importantly, of course, it depends upon the response of Iran to these actions and the condemnation of the rest of the world.

I do not feel it appropriate for me to set a specific time schedule for the imposition of further actions, which may include military action, but it's an option available to me.

I think our key allied leaders understand the time frame under which we are acting and making our plans, and their decisions next week, I think, will be colored, perhaps, by the messages that I have exchanged with them, both by cable and by direct telephone conversations, which continue.

HAMILTON JORDAN

Q. Mr. President, there have been reports that you have designated Hamilton Jordan as your special envoy on Iran to negotiate on the hostages and that, generally, he has become one of your top foreign policy advisers. Could you explain to us some of these new functions of his and his qualifications for them, and also confirm a report that on one or more of his secret missions he wore a wig and other disguises?

THE PRESIDENT. I've never known about any disguises or wigs. Hamilton is not one of my major foreign policy advisers. He does not claim to be an expert on foreign policy. Hamilton is very valuable to me in the proper interrelation of foreign policy decisions with domestic decisions. He does attend most of our high-level discussions on both domestic matters and foreign policy matters.

Almost every member of the White House staff who is involved directly or indirectly in international affairs and, also, those in the State Department and, perhaps, even those in the Justice Department have been involved at various times in the attempt that we have made to convince the Iranian Government and their officials to release the hostages. This does include Hamilton, but he's not designated exclusively at all to play this role.

IRAN; TIMING FOR RELEASE OF HOSTAGES

Q. Mr. President, you mentioned that there's a statement from Iranian officials that they may not consider the hostage question until July. Without talking about a deadline, is that acceptable? Could it go on that long?

THE PRESIDENT. I would think that would be an excessive time for us to wait.

IRAN: EFFECTS OF BLOCKADE ON ALLIED OIL SUPPLIES

Q. Mr. President, despite the compelling objective of obtaining the release of the hostages, what is the possibility that a future military action by the United States, even including a blockade, might be too high a price to pay in terms of the damage to the Allied oil supplies and the further risk of war?

THE PRESIDENT. That's a balance that I will have to assess and on which make the ultimate decision. I have not discussed specific military steps with our allies that I might take. I think they are familiar, through news reports and through just commonsense analysis of those available to us, that the interruption of commerce with Iran is a kind of step that would be available. We announced in November, I think November the 20th, that this was one of those steps that we would reserve for ourselves to take in the future. I think we used the phrase, "interruption of commerce with Iran."

It would be severe in its consequences for Iran and much less severe for any particular customer of Iran. Because of sanctions against Iran and because of the fragmented nature of their own economic system and because of their inability to buy adequate spare parts and continue their exploratory operations of the production of oil, their shipments of oil in the international markets have dropped precipitously.

So, a total interruption of Iranian oil shipments to other countries would not be a devastating blow to those countries. It would certainly be an inconvenience; it would certainly be serious. And we have been trying to avoid that kind .of action, and we are still attempting to avoid that kind of action. But I cannot preclude that option for the future if it becomes necessary.

IRAN: TIMING OF U.S. ACTIONS WITH PRESIDENTIAL PRIMARIES

Q. Mr. President, some of your critics, especially those who work for Senator Kennedy, have suggested that your announcements and actions on Iran, many of them seem timed to influence the Presidential primaries. They cite the announcement the morning of the Wisconsin primary and I'm sure will point out that today's announcements and this press conference come just a few days before the Pennsylvania primary. What's your response to that?

THE PRESIDENT. I would like for you to look at the calendar since the first of January and find a time that wasn't immediately before or immediately after primaries. As you know, we have 35 primaries this year in a period of about 5 months, which is an average of 7 primaries per month. And I have never designed the announcement of an action to try to color or modify the actions of voters in a primary. These occurrences are too serious for our Nation.

And the particular instance to which you refer in Wisconsin was a time when we had negotiated for many weeks in anticipation of such an announcement that the hostages would be transferred to control of the Government and subsequently released. That decision came through official action by the Iranian Government, the Revolutionary Council. President Bani-Sadr made the announcement himself early in the morning our time, about noontime Iranian time. It was a completely appropriate time for it to be announced.

But I do not make, and have not made, and will not make decisions nor announcements concerning the lives and safety of our hostages simply to derive some political benefit from them.

RESPONSIBILITIES OF THE PRESIDENCY

Q. Mr. President, it seems a lot of people we've seen don't find your effectiveness too great these days. We find this in the polls and elsewhere. And at least, it's not as high as they'd like, as good as they'd like. My question is this: Is the job today of being President too big, too complex for a President, any President? Are there too many factors outside of your control to be effective?

THE PRESIDENT. The job is a big one; there's no doubt about that. Under any normal circumstances, being President is not an easy task. The greatness and strength of our country, the support of the American people, the derivation, through democratic processes, of authority and responsibility and the ability to act is a reassuring thing to me and all my predecessors who've served in this office and lived in this house.

This year, almost in a unique way, we've had additional responsibilities. I think it's been 25 or 30 years, for instance, since an incumbent Democratic President had to run a political campaign while he was in office. I don't deplore that. The right of my opponents to run is theirs. But that's an additional complicating factor. It was obviously an additional burden for our entire Nation, not just for me, to have American hostages captured in Iran and to have the Soviet Union invade Afghanistan, which was a departure from 25 years of policy on their part not to use their own military forces to cross the borders into a previously undominated country.

The combination of these three factors, in addition to very high interest rates and inflation rates, brought about primarily by worldwide escalation in oil prices, has made this an extremely difficult job even compared to normal times. I don't deplore it; I'm not trying to avoid the responsibilities.

And I believe that the action of the American people so far during the electoral process has not been a complete endorsement of what I have done or what I have accomplished. But I think the results so far, compared to what was anticipated 6 months ago, in spite of these unpredictable kinds of crises that have afflicted our Nation, have been very gratifying to me and an indication that the American people are fairly well satisfied. We've got problems, yes. But I am not despairing, and I am not fearful; I don't think the American people should be either.

IRAN: PROHIBITION ON TRAVEL

Q. Mr. President, do the sanctions that you announced today, sir, bar the families of hostages and other humanitarian-minded Americans from traveling, assuming of course that the terrorists will allow them into the Embassy?

THE PRESIDENT. Yes, it would unless they had received a specific permit either from the State Department or the Attorney General [Treasury Department]. ^*

^* White House correction.

AUTOMOBILE INDUSTRY

Q. Mr. President, you have just recently encouraged foreign automakers to invest in plants in this country, presumably to hold more jobs here. But in recent days the autoworkers are complaining they've lost a significant number of jobs. They are suggesting putting restrictions on foreign imports, at least as a short-term remedy, and they're planning to be here and lobby for this. I wonder how you feel about restrictions on imports.

THE PRESIDENT. I'd like to respond to your question without it being characterized as a criticism of anyone. I remember the first few months that I was President, sitting in the Cabinet Room, over just adjacent to the Oval Office, talking to the leaders of the American automobile manufacturers, manufacturing firms, all of the leaders there, all the firms represented, encouraging them to comply with the impending legislation in the Congress to require the production of small and efficient automobiles for the American market.

Their unanimous reply was that this was an inappropriate thing for them to do, that the market was not there for the small and efficient automobiles. Subsequent events, which could not be completely predictable, have shown that the American people are now demanding, in order to conserve energy, the small and efficient automobiles, precisely the kind of car that we were encouraging them to make 3 years ago or more.

At this moment every single small, efficient automobile that can be produced by American manufacturers have a ready market. Because they are now in a transition period from the large gas-guzzling automobiles to the manufacture of the small and efficient cars, there is a very difficult time for employment and American production, because the market is not there for the big, heavy, inefficient automobiles.

So, to replace the number of cars that Americans could be producing that are small and efficient that are not being produced, foreign imports are coming in at a very high level. There are several things that we could do: prevent those foreign cars from coming in, deprive the American consumer from buying them, which would drive up the price of domestically produced small cars enormously or would result in Americans having to buy the large and inefficient gas-guzzlers which they do not want. I think that would be ill advised.

So, we are trying to carry over, as best we can, during this transition phase minimal damage to the American automobile worker, as I described in my statement, encouraging the American manufacturers to shift toward the small and efficient cars as rapidly as possible and, as an additional thing, encouraging Volkswagen and other foreign manufacturers to come into the United States, to employ American automobile workers, highly trained, to produce the foreign-designed cars during that period.

Later, I have no doubt that the American manufacturers, who are highly competent and who make superb vehicles, will rapidly shift to the small and efficient cars. When they do, I think the foreign imports, even those manufactured here, will have a much more competitive market. But I cannot freeze, now, imports of the small foreign cars that American consumers want, just to protect an industry that is now transferring its attention to the small cars to be manufactured here.

IRAN: SOVIET ACTIONS TO COUNTER BLOCKADE

Q. Mr. President, I would like to get back to the subject of Iran, if we might. There have been published reports that the Soviet Union has already taken some steps to counter the effects of a boycott or a blockade, should you decide to take that route as the days go on. There are reports that truckloads of various food supplies and other commodities are already coming across the Soviet border into Iran. Do you have any independent confirmation of this, Mr. President, and don't you think, if it is true, this would undermine any future type of a naval blockade?

THE PRESIDENT. The fact is that, I guess, historically there has been a fairly substantial level of trade between the Soviet Union and Iran. Before the recent revolution, there were plans afoot for substantial increased shipments of natural gas from Iran into the Soviet Union in exchange for the barter of goods and perhaps hard cash.

The rail lines and the road system which interconnects Iran and the Soviet Union are quite limited in their capacity. They may be used now at capacity; I don't really know the specifics about that. But I think that the quantity of goods that would be interrupted by a possible blockade, which I'm not predicting now specifically will take place, could not possibly be filled or replaced by the limited transportation routes by land, either from Turkey or Iraq or the Soviet Union, certainly not from Afghanistan, at this time.

THE NATO ALLIANCE

Q. Mr. President, I was wondering, sir: Is it your belief the American people will continue indefinitely to provide the main defense of Western Europe, when there's a story in the papers this morning that showed pluralities in both West Germany and Britain now oppose backing the United States in a future dispute with the Soviet Union?

THE PRESIDENT. The United States has never provided the majority of or the overwhelming portion of troops or fighting equipment in Europe for the defense of Western Europe against the Warsaw Pact. The number of troops that America has, in all, in the European theater is about 300,000. We and our NATO Allies combined have, I think, more than 2 million. I don't remember the exact figure. We have always provided the strategic nuclear umbrella for the protection of Europe, and we've had direct control, as you know, over most of the tactical nuclear weapons.

I saw results of a poll today from Germany that showed that over 80 percent of the people in West Germany, Federal Republic of Germany, favor a boycott of the Moscow Olympics by the Federal Republic of Germany.

I think the NATO Alliance is as strong now as it has been in any time, in my memory, since the war. Under very difficult economic circumstances, the major nations in the Alliance have committed themselves to a real growth in defense expenditures. Under heavy pressure, propaganda efforts by the Warsaw Pact nations, the Allies voted last December to go ahead with a modernization of theater nuclear forces—a very difficult decision. And my own personal relationship with the leaders in those countries, both the heads of state and military and diplomatic, show a very strong commitment to the Alliance and a very strong support for us.

I have sometimes been disappointed at the rapidity of action and the substance of the action taken by some of our allies in the Iranian and the Afghanistan question. But we look at things from a different perspective. We are much more invulnerable than they are to any sort of conventional attack. Germany, for instance, is a divided country. Seventeen million Germans live under Communist rule in East Germany, and Berlin is especially exposed. Most European countries have a much higher dependence on foreign trade than do we.

But I think within the bounds of the limitations and difference of perspective, although I have sometimes been disappointed, I think they have performed adequately. And I believe recently, the last few days, and I believe next week, we will see a strong rush of support to join us in the boycott of the Moscow Olympics, which will be a heavy propaganda and psychological blow to the Soviet Union in condemnation of their invasion. And I believe their support for us in Iran will prove that the premise of your question, that we don't have their support and cooperation, is inaccurate.

INFLATION AND A BALANCED BUDGET

Q. Mr. President, a question on inflation: Did you tell a group of Democratic Congressmen a few weeks ago that you realized that your balanced budget would have only a very small impact on the inflation rate, less than one-half of 1 percent? And if you did tell them that, can you really expect, if the inflation rate stays high, the kind of decrease in inflation that you're talking about? If the balanced budget doesn't really do it, can you really expect them, when OPEC looks at that, when the financial markets look at that, could you expect the kind of decrease in interest rates and oil prices that you were talking about earlier today? Isn't it much more likely that we'll have a recession and with continued high inflation, continued high interest rates, and come out of it with a higher basic rate of inflation than we have now, as happened in '74, '75?

THE PRESIDENT. That's a complicated question. I'll try to answer it briefly.

It is true that by itself, in direct effect, a $15 billion reduction in Federal expenditures, compared to more than a $2 trillion economy, would involve less than a half of 1 percent.

But in my judgment, as I told the congressional leaders assembled in this room, without a clear demonstration of self-discipline on the part of the Federal Government brought about by reduced expenditures and a commitment to a balanced budget, any other anti-inflation components would be fruitless, because we have got to convince the American people, the financial community, business community, labor community, individual citizens, that we ourselves here in Washington running the Government are going to be responsible and not overspend and do our share to get the Federal Government out of the borrowing business in 1981, in order to induce them to join us in a common team effort.

I do believe that we are already seeing some results. In my opinion, the recent news on interest rates, not just the prime rate but most other interest rates, have shown an encouraging turn. I can't predict that it's going to be permanent; I don't want to mislead anyone. But if we can have a limit, a fairly substantial limit, say, a 20-percent increase in OPEC [overall] ^* energy costs, and some reduction-say, 2 percent—in mortgage rates on homes, we anticipate a substantial reduction in the inflation rate within the next few months. I'm talking about a reduction of maybe 8 percent or more. Those are two big "ifs," but I don't think they're beyond the realm of expectation.

^*White House correction.

So, I do believe that a concerted commitment on the part of the American people to the program that we have outlined, and some of them have volunteered to assume, will be effective and that we will have a reduction of interest rates and inflation, and at the same time, we will keep our economy strong. I have a very good feeling about the future this year, about controlling inflation and reduced interest rates.

MIDDLE EAST PEACE NEGOTIATIONS

Q. Mr. President, in the last 10 days, Mr. President, you've talked with the leaders of Israel and Egypt at length about their negotiations on Palestinian autonomy, and you've said, today in fact, that the problems look less formidable now. Can you tell us where the give is and where you see the hope that these two parties might reach agreement by May 26 or any other time in the near future?

THE PRESIDENT. I am not able and have never been able to speak for Egypt or to speak for Israel. The negotiation is basically between those two countries. We have faced much more formidable obstacles in the past than we presently face, both prior to the Camp David accords and also prior to the Mideast peace treaty conclusion.

Now we are carrying out the Camp David agreement. When I discuss these matters with President Sadat or Prime Minister Begin, they have never deviated one iota from the exact language and the exact provisions of the Camp David accords. It's looked on almost as a sacred document. There are differences of interpretation about what is actually meant by "a refugee" or what is actually meant by "full autonomy" and so forth.

But we're now in the process of negotiating how much authority and power and influence and responsibility to give to the self-governing authority, how exactly it will be composed—those are the two basic questions—and how that selfgoverning authority is to be chosen. And once that's decided, Israel is completely ready to withdraw their military government, the civilian administration, to withdraw their own forces and to redeploy them in specified security locations, and to let those new duties and responsibilities be assumed by the Palestinian Arabs who live in the West Bank/Gaza.

That will be a major step forward. And if we can accomplish that, then the details of exactly how to administer water rights and exactly how to administer land and how to administer other specific elements of security, like controlling terrorism, which are now the difficult issues being negotiated, I think will be resolved without delay.

FRANK CORMIER [Associated Press]. Thank you, Mr. President.

THE PRESIDENT. Thank you very much.