A Discussion Panel with Secretary of Defense Robert Gates and Secretary of State Hillary Rodham Clinton at the George Washington University School of Media and Public Affairs, Washington, D.C.

FRANK SESNO, CNN ANCHOR: Well, let me welcome you both to the George Washington University. Thank you for being here. There will be no quizzes or exams after this, but we'll try to have this as intriguing a conversation as we can.

And I - as I mentioned, Christiane - excuse me - Christiane's got her program, and we're very much looking forward to seeing it there and around the world. I should also mention that America Abroad Media is turning this into an hour-long special. It will be distributed both domestically and international - internationally as an hour-long special on public radio and available to all other media, many of whom are here. So, welcome.

HILLARY CLINTON, US SECRETARY OF STATE: Thank you.

SESNO: Christiane?

CHRISTIANE AMANPOUR, HOST OF CNN'S 'AMANPOUR': Welcome.

Welcome to you both.

We've been sort of searching back in the annals of recent history and we can't really find an example such as this, where two sitting Secretaries of State, in charge of some of the most important briefs at the moment, sitting on stage in an interview such as this. So, we just wanted to start by asking you, how often do you speak together? What is it like working together? Do you pick up the phone and call each other whenever you like? How does it work?

CLINTON: Well, we actually spend a lot of time together, and it is mostly at the White House, in the Situation Room, which is this room that is especially set up for secure conversations, a windowless domain that we spend a lot of time in, and we also talk outside of those formal meetings.

But it's been a real pleasure for me to work with Bob over the last nine months. And a lot of the decisions and the reasons we end up in the Situation Room are, you know, pretty serious and challenging ones to tackle and try to come up with our best advice to the president. But, you know, Bob has a - a lot of experience, which I certainly appreciate, and also a good sense of humor, which makes everything a little bit better.

ROBERT GATES, US SECRETARY OF DEFENSE : You know, most of my career, the Secretaries of State and Defense weren't speaking to one another (crosstalk) and - and it could get pretty ugly, actually. And so -

I mean, it's terrific to - to have the kind of relationship where we can talk together, because the truth of the matter is if the bureaucracies realize that the principal get along and work together and are on the same page, it radiates downward. And when people discover it's not career-enhancing to try and set your principal's hair on fire because the other person is doing something horrible, it makes a huge difference and not just at this level, but all through the bureaucracy and the interagency.

SESNO: So what is it that -- by doing this and by sending the signal from the top -- that you are trying to change? You've both talked a lot about taking the country in new directions and -- for the 21st century. But what are you trying to prove by this in terms of actual implementation?

GATES: Well, I don't -- I don't think we're trying to prove anything. It's just we get along. We work together well. I think it starts with, frankly based on my experience as secretary of defense, being willing to acknowledge that the secretary of state is the principal spokesperson for United States foreign policy. And once you get over that hurdle, the rest of it kind of falls into place.

And I think it's really just a matter of "this is the way we work together". As I say, we're not trying to prove anything. It's just this is what works. And this is how government ought to work.

CLINTON: You know, Frank, I think that, you know, when Secretary Gates was given this responsibility in the last administration, he immediately began making clear that we had to have a coherent and unified foreign policy. The instruments of American power in defense, diplomacy and development needed to be working together.

And before he was a part of the Obama administration, he had gone on record several times talking about the need for us to work more closely together between our civilian capacity and our military force. So when President Obama asked Bob to stay on, I knew that he understood the kind of "whole of government" approach and was really dedicated to try to make sure that we were doing the best we could for our country.

His years -- his decades of service to America give him a perspective that is very useful. And I mentioned this before, but Henry Kissinger, following up on what Bob had said, said that it was the first time that he found that the, you know, State Department, the White House, and the Defense Department mostly through Bob and me and -- and General Jones, were all saying the same thing.

Now that doesn't mean we don't have differences of opinion or see issues from slightly different perspectives, but we have an enormous amount of respect for each other, we listen to each other, and we work through, give our best advice to the president and then support the president's decision.

AMANPOUR: So given that you're involved in a very difficult situation right now, the war in Afghanistan, the place where I've spent a long time -- I want to start by asking you, do you think you can win there? Both of you -- I'd like to know whether you think you can win?

CLINTON: Well, I think, Christiane, what we're looking at, as we meet to advise the president, is what do we need to do in Afghanistan and Pakistan, because we see the region as the area of concern that will, you know, promote American interests and values, protect our country as well as the allies and other interests that we have around the world.

So I think it's a -- it's a -- a very thoughtful analysis about what is it we need to do. And -- and we're, you know, we're trying to look at it from ground up and make sure that we're examining every assumption, because what's important is that at the end of the day, the president makes a decision that he believes in, that he thinks is going to further our core objectives of, you know, protecting our country, preventing attacks on us, trying to protect our interests and our allies. And that's what we're -- we're attempting to do.

AMANPOUR: Secretary Gates, the majority of the American people believe that America can win in Afghanistan.

Do you think America can win in Afghanistan?

GATES: Well, from the time I've took this job, I have tried, both in Iraq and Afghanistan, to avoid terms like "winning" and "losing," because they become very loaded in our domestic debate, but they also become loaded around the world.

I think the key thing is to establish what our objectives are and can we achieve our objectives?

And the answer to that question is absolutely.

SESNO: Well, let me ask you about our objectives, because back in March, President Obama said several things. He said "our clear and focused goal" -- that was his term -- was to disrupt, dismantle and defeat al Qaeda. He said, for the American people, the Afghanistan-Pakistan border was the most dangerous place in the world; that Afghanistan was an international security issue of the highest order; and that if the Afghan government were to fall to the Taliban, the country will -- and I'm quoting him here -- "be again be a base for terrorists who want to kill as many of our people as they possibly can."

Has any of that changed from them until now and this review?

CLINTON: No.

GATES: I don't think so.

CLINTON: No.

SESNO: So staying the course and -- and having this government survive and not fall to the Taliban and disrupting and dismantling al Qaeda is the objective -- is the goal of this review that you're going through?

CLINTON: Well, Frank, the -- the goal remains, as the president said last spring -- what we are -- I think rightfully -- doing is examining the strategies and tactics to achieve our goal. And I happen to think that's a good thing. You know, it -- it is difficult enough to deal with the challenges emanating from Afghanistan and Pakistan and the continuing threats from al Qaeda. But to do it when there is so much pressure to make a snap decision, never to ask the hard questions, is really counter-productive.

And I admire the president for saying, as he did last spring, you know, we're going to reassess this. He appointed a new commander. That new commander was asked to assess it. He has a special representative based in the State Department with a whole government team constantly being asked, are we making progress?

So I think what we're going through in asking ourselves OK, we know what the goal is, is what we're doing most likely to achieve that goal, is what a very decisive and intelligent, you know, commander-in-chief would do.

So we're going to come up with what we think is the best approach, but the goal remains the same.

GATES: I think it's important to remember that, as Secretary Clinton said, that the president indicated very explicitly in -- at the end of March that we would revisit the strategy after the election in Afghanistan. Now, at least a couple of things have happened. One is the new commander has done an assessment and found the situation that -- in Afghanistan, that is more serious than we anticipated when the decisions were made on March. So that's one thing to take into account.

The other is clearly a flawed election in Afghanistan that has complicated the picture for us.

And so, it seems to me, under these circumstances, and particularly -- I mean let's be honest, the president is being asked to make a very significant decision. And the notion of being willing to pause, reassess basic assumptions, reassess the analysis and then make those decisions seems to me, given the importance of these decisions, which I've said are probably among the most important he will make in his entire presidency, seems entirely appropriate.

AMANPOUR: So you've both spoken just now very highly of General McChrystal. You've talked about the new commander, his important reassessment and changes on the ground.

There are obviously two basic choices that you have, either to go all in or to scale back. Some who are talking about scaling back talk about less nation-building, talk about more Predator strikes, perhaps more focus on -- on Pakistan rather than in Afghanistan.

In a public speech in London to military personnel, General McChrystal, when asked about that, flatly stated that it wouldn't work. Can we just show you what he said?

(BEGIN VIDEO CLIP)

GEN. STANLEY MCCHRYSTAL, COMMANDER, INTERNATIONAL SECURITY ASSISTANCE FORCE, AFGHANISTAN: No. And the first -- the first reason is, I believe, you have to navigate from where you are, not from where you wish you were. We are in Afghanistan. We've established relationships, expectations both with the Afghan people, the Afghan government, in the region, and I believe Afghanistan has its own value. It's stability now.

(END VIDEO CLIP)

AMANPOUR: So do you believe that by scaling back over the next 12 to 18 months you can win in Afghanistan?

GATES: Well, first of all, I think, as you know, we are not going to talk about where the president ought to go or the options in front of him. I mean, I think I just gave a speech this morning in which I said that the president deserves the candid advice of his senior advisers, both civilian and military, but that advice should be private.

All I will say is, first of all, I think Stan McChrystal is exactly the right person to be the commander in Afghanistan right now. He was my recommendation to the president to lead this effort. And I have every confidence that no matter what decision the president makes, Stan McChrystal will implement it as effectively as possible.

AMANPOUR: Could I ask you about the nature of private advice? You have said it; others have said it; General Jones said it this weekend. You know that, during the lead-up to the gulf -- to the second Iraq war in 2003, many of the one-star, two-star, other generals and military officials didn't stand up and challenge the premise that only a certain amount of troops were necessary, and that was deemed to have been a big mistake and deemed to have wasted a lot of time, for instance, in Iraq. Do you not think that General McChrystal must give his honest assessment in public, because of what happens when that honest assessment was not given?

GATES: I think the important thing is for the president to hear the advice of his commanders and to have the advantage of hearing that advice in private. In all the decisions that were made during the surge in Iraq, the president -- I structured a process where the commander in the field, General Petraeus, the then-commander of Central Command, and the Joint Chiefs of Staff each had an opportunity to present their views privately to the president on what ought to be done.

I think that's the way the process ought to work. I think the president -- this president has made it clear he is prepared to spend whatever time is needed in person, not only with the Joint Chiefs and the chairmen of the Joint Chiefs of Staff, but with General McChrystal, to make sure they have had plenty of time to present their views directly to him. That's a commitment he has made to me directly, and I intend to make sure that it's exercised.

AMANPOUR: Could I just ask, Secretary Clinton, what you think about the nature of the debate over the advice? Is -- are not the American people entitled -- is this not the premise of American democracy, that the American people are entitled to hear the same advice and that members of the U.S. Congress, who are going to have to weigh in on this, as well, should hear this advice?

CLINTON: Well, I think that there's a timing to all of this. And I agree completely with Bob that, in the process of trying to tee up these decisions for the president, it is very important that he get the most thoughtful, candid advice from everyone. And, remember, he's getting advice about what will work not just from the military, but from the civilian side, as well. And I think that that is the way to begin any kind of decision-making process.

Now, there's no doubt that, as decisions get made, they will be, you know, fully available for the public and for the Hill. Consultations are going on with the Hill all the time.

But I -- I think it's important to put this into perhaps some historic perspective. You know, it is unusual for all advice about military matters to be in public for a president. Now, there is a lot of second-guessing that might go on and historical perspective, but this process that President Obama has put together is, I think, one of the most open, most thorough that I've read about. And it is very much an invitation for everybody to come to the table, and that's what we're doing.

AMANPOUR: We'll be right back with more on this subject right after a break.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: To advance security, opportunity and justice, not just in Kabul, but from the bottom up in the provinces. We need agricultural specialists and educators, engineers and lawyers. That's how we can help the Afghan government serve its people and develop an economy that isn't dominated by illicit drugs.

And that's why I'm ordering a substantial increase in our civilians on the ground. That's also why we must seek civilian support from our partners and allies.

(END VIDEO CLIP)

SESNO: Secretary Clinton, you've heard that, President Obama speaking in March about the need to increase the number of civilians – the civilian surge it's called -- but the civilian task has been -- or the civilian personnel has been way under-tasked. When you came into office, 300-some-odd civilians. You're trying to move to 1,000 by the end of the year or just under it.

CLINTON: Right.

SESNO: That's a big increase.

CLINTON: Right.

SESNO: But compared to the tens of thousands of the military, it's just a drop in the bucket. Is that really going to change the dynamic? What should the balance be in a conflict zone like Afghanistan if you're going to accomplish the goals that you're out to accomplish?

CLINTON: Well, Frank, I think what we are attempting to achieve is remarkable in a short period of time. As you say, back when the president made those remarks in March, we had about 300 civilians, Americans, in Afghanistan. We will have close to 1,000 by the end of this year.

But it is a kind of a chicken-and-an-egg issue. We want to focus on development, particularly agriculture, rule of law, good governance, economic development, women's empowerment , those kinds of issues. But in order to operate in many of the places in Afghanistan, you have to have a level of security.

So there has to be a commitment to make an area as secure as possible. Because remember, when an American goes in, that person will always be accompanied by, you know, NGOs, Afghans. So the numbers are much bigger than just the direct American hires, because there are a lot of Americans working in Afghanistan who work for charities or nongovernmental organizations.

But our assessment was that, you know, we needed to focus on how to help the people of Afghanistan lift themselves up, have their own opportunities, and it goes hand in hand with our military effort.

SESNO: Secretary Gates, you in many ways launched this conversation a couple of years ago with a speech where you talk -- and you said that we will not kill or capture our way to victory in these places. What should our civilian diplomats be doing that the military is now doing?

GATES: Well, they are -- there are a lot of civilians out there and doing things...

SESNO: But not enough, right?

GATES: Well, let's -- let's step back, first of all, to that point two years ago when I said -- when I sort of gave my "man bites dog" speech of the secretary of defense, saying there wasn't enough money going to the Department of State.

The reality is, the Department of State and the Agency for International Development were starved for resources for decades. Now, just -- just let me give you an example. Working for me are 2 million men and women in uniform. Secretary Clinton has I think somewhere south of 7,000 foreign service officers. If you took all the foreign service officers in the world, they would barely crew one aircraft carrier. So, you know, just to keep things in perspective.

(Cross talk)

Well, and we have partnered. And the reality is that – that the civilians who do end up in Iraq and Afghanistan in the provincial reconstruction teams and in the other activities, rule of law, agriculture and so on have a disproportionate impact to their numbers. And I talked to brigade commanders and -- and one or two civilians, working with them, have an enormous impact. And these are the colonels who are the brigade commanders who talk about this.

So, you know, do we want more civilians? Absolutely. We will take all the civilians that we can get out there.

SESNO: But -- but my -- my question was, what are the things that the military is now doing that should be handled and are better handled by our diplomats?

CLINTON: Well, Frank, let -- let me just answer that, because a lot of what happens when our military -- and they've been doing an incredible job against a really ferocious enemy in Afghanistan, particularly along the south and along the border -- without civilians, it's very hard to make the transition from, you know, the soldier or the Marine holding the automatic weapon who has been trying to rout out the Taliban to going and trying to help a farmer get enough yield out of his wheat crop so that he doesn't want to grow poppies.

I mean, that's -- that's, you know, an issue that is very difficult for the military to take on a sustained basis. But in the last several years, in both Iraq and Afghanistan, it was young lieutenants, captains, majors, they were doing that.

They were trying to do both jobs. And at a certain point, we need to support them. And I appreciate what Bob said about how it affects -- trained civilians are force multipliers. They can begin to do the civilian interaction with, you know, tribal elders and others that will help to make the environment more secure that our Marines and soldiers have helped to create.

AMANPOUR: And -- and part of what's happening is that the Afghan people are not getting as much economic development, therefore, not as much help and hope as -- as one might have brought forward when this started.

So the question I have for you, sir -- both of you, actually -- is that there had been some talk over the weekend about how the United States believes that perhaps al Qaeda has been diminished, the threat from the Taliban is not as great as one might have thought.

So I want to know what you think about the momentum of the Taliban, their long-term prospects, given the fact that today, 80 percent of Afghanistan has a permanent Taliban presence, compared to 72 percent a year ago and 54 percent the year before that. They seem to be winning territory rather than losing.

GATES: I -- I can't improve on -- on General McChrystal's assessment that the situation in Afghanistan is serious and deteriorating. And, you know, there are a lot of reasons for it. You have to go back to 2003, 2004, in terms of the Taliban beginning to reconstitute themselves in Pakistan and so on. I mean that's a historian's debate. We are where we are.

And -- and this -- it kind of goes back to General McChrystal's quote that you aired. You -- you have to start with where you are, not where you wish you were. And -- and the reality is that because of our inability and the inability, frankly, of our allies, to put enough troops into Afghanistan, the Taliban do have the momentum right now, it seems.

AMANPOUR: And do you believe that should -- not next week or next month -- but should Afghanistan fall to the Taliban again, that it would again become a base for al Qaeda to have its operations there?

GATES: I think -- I think the thing to remember about Afghanistan is that that -- that country, and particularly the Afghan-Pakistan border, is -- is the modern epicenter of jihad. It is where the Mujahedeen defeated the other superpower. And their view is, in my opinion, that they now have the opportunity to defeat a second superpower, which, more than anything, would empower their message and the opportunity to recruit, to fundraise and to plan operations.

So I think you have to see this area in a historical context in terms of what happened in the 1980s and the meaning of the victory over the Soviet Union in order to understand the importance of this symbiotic relationship between al Qaeda and the Taliban and -- and the other extremists, frankly.

AMANPOUR: So you think they would come back if Afghanistan fell?

GATES: I don't know whether the -- whether al Qaeda would sort of move their headquarters from the Fatah to -- back into Afghanistan, but there's no question in my mind that if the Taliban took large – took control of significant portions of Afghanistan, that that would be added space for al Qaeda to strengthen itself and -- and more recruitment and more fundraising.

But what's more important than that, in my view, is the message that it sends that empowers al Qaeda. Al Qaeda, in many respects, is an ideology. And the notion that they have come back from this defeat -- come back from 2002, to challenge not only the United States, but NATO -- 42 nations and so on -- is a hugely empowering message, should they be successful.

AMANPOUR: Welcome back. We're going to continue our conversation with Secretary of State Hillary Clinton and Secretary of Defense Robert Gates.

We were just talking about Afghanistan and the Pakistan area -- part of your joint solution, hopefully, to this regional -- regional problems that exist there.

The prime minister, the president, the foreign minister of Pakistan have all said and have all been very worried about short-termism, from the United States. They're concerned that if you pull back, then they will have to bank not on the U.S. Again, but on, perhaps, the Taliban, like they did before 9/11.

What do you say to -- to the Pakistani leaders, who are now doing precisely what you asked them to do -- going after the Taliban, after various militants and terrorists in their own -- in their own country?

CLINTON: Well, what we say is that we want to be supportive and provide assistance. And we want to ramp that up. Just this – this last week, a very important piece of legislation, the Kerry-Lugar-Berman bill, that made a commitment to additional aid for Pakistan's civilian government and to deliver services to the people of Pakistan was passed unanimously, on its way to the president to be signed.

And you're right, when we started this review, one of the innovative conclusions we reached was we had to look at both Afghanistan and Pakistan together. Obviously, we had a great commitment in Afghanistan and there had been military assistance and counter-terrorism training provided to Pakistan, but there hadn't yet been a commitment by the Pakistani military and the civilian government, like we're seeing now, to go after the extremists that are threatening them, as well as beyond their borders.

So we are telling them that we think that this is an important commitment that they've made. But, again, I would just ask you to put this in some historic perspective. You know, we -- we live, in the United States, on such a fast pace, that sometimes, you know, a month ago seems like a really long time ago. In lots of the rest of the world, people remember.

And as Bob said, when we partnered with Pakistan to supply the Mujahedeen with the weapons and training that they needed to defeat the Soviet Union in Afghanistan, once that was accomplished, we left. And Pakistan feels like we left them holding the bag, because all of a sudden they were awash in weapons, they were awash in drugs. They had all of these, you know, jihadists who had been trained up in conjunction with us. And, you know, we know what happened. We saw that occurring in Afghanistan.

So I think it's rightful of the Pakistanis to say, "Well, how long will your commitment be? How much will you be by our side as we take on these threats to us and, by the way, also to you?"

SESNO: Well, how long is the commitment? Are you prepared to say this evening that the commitment of this country and two of you here to Pakistan is an open-ended commitment, that despite this policy review that's ongoing, that the commitment to the Afghanistan-Pakistan region is not going to be thwarted by short-timerism, or whatever you want to call it, and we're there to say -- the United States of America is there to stay?

CLINTON: Well, what we're doing is defining our objectives, and we're then trying to set forth the strategy and the tactics to achieve those objectives.

SESNO: I mean, the foreign -- if I may -- the foreign minister of Pakistan said the fact that this is being debated -- meaning this whole policy review -- whether to stay or not to stay, what sort of signal is that sending, he said. Isn't this undermining the very Pakistanis whom

you have pressured to lean on their own extremists in the Taliban and fight this fight?

GATES: Well, first of all, I think that there is absolutely no reason for the president not to consider very carefully the next steps in Afghanistan. I had lunch with the Pakistani ambassador last week, and I made absolutely clear to him: We are not leaving Afghanistan.

This discussion is about next steps forward. And the president has some momentous decisions to make. And while there may be some short-term uncertainty on the part of our allies, in terms of those next steps, there should be no uncertainty in terms of our determination to remain in Afghanistan and to continue to build a relationship of partnership and trust with the Pakistanis. That's long term. That's a strategic objective of the United States for -- for a number of reasons that Pakistan is a strategically important country.

So I -- you know, if -- if it makes them nervous that we're talking about this for a couple of weeks, frankly, I think that's a transitory problem.

SESNO: I just want to button one thing up. You were talking earlier about your advice and your comments, your public comments, to keep the advice to the president private and candid. Are you trying to muzzle McChrystal?

GATES: Absolutely not. I will tell...

SESNO: Will we be hearing -- will -- will we be hearing him speak publicly again?

GATES: You know, I was going to -- I was actually -- I was actually going to pile on to Hillary's comments earlier before we went to the break. Look, when we did the surge in Iraq, there was no public discussion during that surge by the people involved in that debate. The president made his decisions. The chairman of the Joint Chiefs of Staff and I then went to the Hill to testify. And General Petraeus then followed us.

That is exactly what is going to happen in this instance. There will -- I -- I have told people on Capitol Hill, the minute the president makes his decisions, we will get General McChrystal back here as quickly as possible and up onto the Hill, because I will tell you, there is no one more knowledgeable and more persuasive on these issues than Stan McChrystal.

But it would put -- I believe it would put General McChrystal in an impossible situation to go up in a hyper-partisan environment to the Hill before the president made his decisions and put the general on the spot. I just think that's wrong. I think it's wrong for General McChrystal, and I think it's wrong for the president. And as far as I'm concerned, in this job, I'll do everything in my power to prevent that until the president has made his decisions.

(commercial break)

AMANPOUR: I want to know if you can tell us, what precisely was agreed between the U.S., Iran, and the other powers sitting at that table in Geneva? Did they actually agree to ship out their low-enriched uranium?

CLINTON: Well, there were -- there were three agreements: one, that there would be inspections, and those inspections are going forward, and they're going forward quickly of the undisclosed sites that the president and Prime Minister Brown and President Sarkozy announced a little over a week ago in Pittsburgh.

They agreed that, in principle, the Iranians would ship out their LEU for reprocessing to be returned for their research reactor. There will be a team of experts meeting to determine exactly how that will be carried out within 10 days.

And they agreed that there will be another meeting, which means that this process doesn't just drag on without any, you know, continuity.

So we think that, on those three big issues, this was a worthwhile meeting. But as the president has said and I and others have also made clear, this is not by any means a stopping point. There is much more to be done. We expect much more.

We know that the Iranians need to understand that they have run a nuclear program that has violated international rules and Security Council resolutions, which they have to bring, you know, into compliance, making it more transparent and accountable. So we have -- we have work ahead of us, but I think that, on balance, what came out of the meeting in Geneva was positive.

AMANPOUR: Just to follow up on the low-enriched uranium, you know, one Iranian diplomat told the press that actually, no, there wasn't that agreement, and I'm asking you whether there is some miscommunication. Are they just agreeing to buy enriched -- further enriched uranium and not ship theirs out? Or do you understand that they are going to ship the bulk of theirs out?

CLINTON: Well, nothing is finished until it's finished. And there's a meeting of technical experts -- I believe it's October 18th -- to see how to put into action what we certainly believed was an agreement in principle. But there's a lot to be done before that actually happens.

SESNO: Do you think the Iranians actually want to resolve this?

CLINTON: We don't know yet. We don't know.

SESNO: Think this is credible?

GATES: I agree with Hillary. I think -- I think the jury's out. And -- and what we have to do is keep them to tight enough deadlines and specific enough requirements that we have some indication of whether they're serious or not.

SESNO: I mean, there's already -- there's already some substantial criticism of this, that -- that from -- from -- from some who are saying that this is another way for the Iranians to play for time and that, in effect, they're being rewarded for having flouted U.N. resolutions all these years if they can take the uranium that they shouldn't have enriched to begin with, get it sent out, and have it brought back, enhanced, and be able to use in a power plant?

CLINTON: Well, but -- but think about what we're -- what we're seeing here, and that is that the uranium that they have enriched would be used for a research reactor, which everybody knows they've been running, which they are entitled to run, but it would not be used for other purposes.

So, yes, does it buy time? It buys time. It buys time for us to consider carefully their response, the sincerity of their actions, and, you know, we're moving simultaneously on the dual track. I mean, we always said we had a track of engagement, and we have begun that with this process, but we also said we would be working with likeminded nations and convincing others to stand ready with tougher sanctions were we not successful.

AMANPOUR: Can I ask you, Secretary Gates, has your opinion, your intelligence, has anything changed regarding your assessment of whether they're trying to make a nuclear weapon?

GATES: My personal belief all along has been that they have the intention of -- of developing nuclear weapons. Whether they have actually begun that program or not is -- is hard to say, whether they're begun a weaponization program.

But I think, you know, the question is, can we over time or can we in a limited period of time bring the Iranians to a conclusion that – that Iran is better off without nuclear weapons than with them, and not just in the security sense, but economically and in terms of their isolation in the international community, and so on.

(not on tape And because -- I mean, my view is, the only long-term solution to this problem, at the end of the day, is the Iranians themselves deciding having nuclear weapons is not in their interest. And if we can't convince them of that, then an array of other options are open.

But our hope, my hope for ever since I took this job has been that -- that we could, through -- through both carrots and sticks, persuade them of a smarter direction for Iran.

AMANPOUR: Isn't the -- the -- I mean, there are basically, I think, three policy options, Iran with some kind of nuclear capability, a nuclear program, END NOT ON TAPE) RESUME but with very strict verification, sanctions to try to get them not to enrich, which so far has not -- have not worked, plenty of holes, plenty of black market, or the military option, which you yourself have cast doubts upon its efficacy. Isn't the -- the real nub of the debate right no w to figure out some kind of way of verifying and inspecting and being able to know if they plan to do something else with their uranium, other than for peaceful purposes, as they claim?

CLINTON: Well, that is, of course, part of the change in calculation that Bob was referring to. We have a very clear objective of trying to persuade the Iranians that their calculation of their security interest and their economic interest should take into account the consequences of sanctions, for example, of increased defensive measures taken in Europe and in the gulf region. You know, we just worked through this missile defense decision, and, you know, clearly, our new adaptive approach toward missile defense is aimed at protecting our NATO allies and most of Europe from a short- or medium-range Iranian missile.

We have begun to talk with a lot of our other friends and allies about, you know, what they need to feel that they would be adequately protected.

Now, this is not in any way to concede what Iran should do going forward, because some people say when we talk defensive, that means that we're conceding that they are going to end up with a weapon.

No, not at all. We are trying to influence the calculation and the decision as to whether or not they should move toward weaponization.

GATES: Some people have said, in so many words, that I'm kind of wooly-headed in believing that the -- that the Iranians would see not having nuclear weapons as more in their security interests than not.

But the question is, would the Iranians look at that that way if there were proliferation of nuclear weapons in the Middle East, if some of their neighbors in the Middle East, beyond those that now have them would develop nuclear weapons?

Is that in their interests?

Do they think that enhances their national security?

I -- I think that's an argument to be made.

AMANPOUR: We were going to continue this line of questions after a break

We're talking about Iran and some way of figuring out the way forward about Iran's nuclear program.

So just a quick one before Frank wants to ask you about smart power.

I just want to know, is it good enough to have a strict verification protocol -- for instance, the additional protocol under the NPT, or, indeed, you know, to have shipping out of the NEU?

Is that good enough, even if it's not perfect?

CLINTON: Well, this is -- this is a question we're not ready to answer because we don't know what the options in front of us are. We don't know what Iran would agree to. We don't know what kind of pressure could be brought to bear in case they don't agree.

So, you know, our goal is, as it always has been, to try to prevent Iran from obtaining nuclear weapons, which we think would be very destabilizing in the region and beyond. And that's what we're aimed at achieving through this engagement.

GATES: And I want to (INAUDIBLE) what nuclear sites might they be prepared to be transparent about that have not been declared at this point.

SESNO: I want to ask you about -- both -- one last question about Iran. And that relates to what the message is to the people of Iran who have been in the streets; who have opposed Ahmadinejad; who spoke out; in some cases, have been arrested, wounded or worse, standing up to what they see as a stolen election.

The United States has a long history of standing on the side of human rights and democratic reforms and it speaks up for those who have been oppressed.

Are you concerned -- because some are -- if there's so much effort to negotiate with the government in Iran right now and resolve, or at least make progress on this -- progress on this nuclear issue, that those in Iran who want real political change are going to be somehow forgotten or abandoned or will not be the focus of American comment and -- and action?

CLINTON: No, because I think we've been very clear in supporting the legitimate aspirations of the Iranian people and in speaking out forcefully against the irregularities of their electoral process.

But what we've concluded is if you look at our dealings with the former Soviet Union, for example, during the cold war, we always pressed them on human rights and we always talked with them about reducing our nuclear arsenals or trying to have some arms control.

These are not either/or. Human rights is at the core of who we are as Americans. We, you know, hope for all people the rights that we enjoy here. But at the same time, you know, just as no American president walked away from summits with the Russian presidents, working to try to achieve the goals that you could possibly find common ground on, that's what we're doing with the Iranians.

AMANPOUR: So that's just what I was trying to press with you, in terms of the verification, just as with the USSR, when there was a verification system in place where you could know whether there was any dirty dealing or cheating going on in time to respond...

CLINTON: But they (INAUDIBLE)...

AMANPOUR: You seem to be going that way.

CLINTON: But they -- they got a weapon. I mean they got a weapon and then they were a nuclear...

AMANPOUR: You're talking about...

CLINTON: The Soviet Union, yes. They got a weapon. They were a nuclear weapons power. And then we did deterrence and containment and a lot of negotiation.

What we're trying to do in today's world, where the information about nuclear technology is much more widely known, certainly than it was in the late '40s and early '50s, we're trying to convince Iran that this is not in their interests to do. And that is -- you know, that is – that is a different perspective than finding out -- waking up and finding out the Soviet Union, you know, had the A bomb and we had to deal with it.

SESNO: Let's talk about 21st century diplomacy and how it's changed and -- and what you're doing, because you both addressed this, different terminology that's often used.

In one particular area, information, I want to talk a little bit for a moment here. You call it strategic communication, you call it public diplomacy, but it's connecting with the rest of the world. It's learning back from what others are saying. It's influencing leaders and persuading publics and knocking down myths or propaganda and maybe, in some cases, propagandizing ourselves.

A lot of this is now done by the military. There is no one person in

charge of this.

How should this very important information battle be waged and who

should be in command?

CLINTON: Well, let me give you two quick examples.

SESNO: The State Department?

CLINTON: Yes. You know, a -- a battlefield conflict zone requires the military to respond to, you know, rumors, attacks. They have to have a strategic communications effort. But it must be part of a broader national public diplomacy outreach effort.

I'll give you two quick examples. We were just talking about Iran. We learned that during the height of the demonstrations about the election that Twitter was a major source of information for people who were protesting.

CLINTON: And we -- and we thought that was a good vehicle, but we were told that Twitter was going to have to shut down for 48 hours to do some upgrades to the software. So we called and said, Please don't shut down, because this is a major communications loop for people on the streets.

In Afghanistan, what we've learned since we got in there -- and these great young civilians who work for me in the State Department working with these great young military leaders working in the -- in our armed forces, they realized that we didn't have a secure environment for cell phones to operate.

So we began looking for places we could put up cell towers. We began looking for how we would incentivize businesses in Afghanistan to spread their cell phone coverage. Why? Because the Taliban and their allies use cell phones to intimidate people. We found out that they were running FM -- illegal FM stations literally off the back of motorcycles. And they were telling people, "We're going to behead this person, we're going to do that."

So we are competing in that space. And, you know, obviously, we have to work together, but we have the lead on it, because it needs to stand for more than just our military might. It needs to represent all of our national interests and values.

AMANPOUR: We're going to take another break and well be back in just a moment.

SESNO: One of the concerns in the strategic communications field is that, in the conflict situation, in too many cases, it's the man or the woman in the uniform with the gun who is the -- in a sense, the frontline communicator and also the diplomat at times. So though you say you want her and State and the diplomats, the civilians to be in command of that, of necessity, our military, our men and women in uniform, are placed in -- in that -- in that role. What should change?

GATES: Well, I think, in the battlefield -- on the battlefield, not much can change. And I think one of the most extraordinary things that we have seen both in Iraq and Afghanistan is the extraordinary innovativeness and sophistication of NCOs and junior officers in terms of interacting with the populations and in terms of trying to build trust. I don't think it can be any other way on the battlefield.

Once -- once security is established, then I think that's the place where the civilians come in and -- and -- and take the lead in this. But -- but I think one of the things Americans can be incredibly proud of is -- is how well young men and women who are not professionals in the communications world and -- and, frankly, who in many cases don't have the language and -- and haven't studied the culture and so on established personal relationships in these -- in these countries that matter a lot and that create a tremendous foundation on which we can build.

We're doing a lot in the department in terms of language training, in terms of cultural education and so on, for troops that are going out, so that they're sensitive to the different cultures that they're dealing with, but in terms of the first-line operators, they're quite extraordinary.

SESNO: You've both talked -- yes, in a few. I just want to -- I just want to button this up, because we are going to move to your questions in a moment, to the audience questions in a moment, but you've talked a lot, as well, about the under-resourcing of our nation's diplomats. We heard you talk about that a moment ago, but also the need to re-tool how these -- how this toolbox of -- of diplomacy and information and military and economics are all brought to bear to have power and persuasion and influence in the world.

You've taken that on, sometimes unpopularly and controversially in your own institution, which you believe needs to change in fundamental ways, whether it's weapon systems, the F-22. You've spoken about how you have to take on retired generals and the military contractors and

congressional members.

So what advice would you have to her if -- if -- if the tools of diplomacy and another bureaucracy called the State Department is to move to the 21st century? So go ahead and have a little moment here.

GATES: Well, first of all, my -- my view is the American toolbox should contain something other than hammers, OK? (applause)

And -- and I -- my view is that the challenge that Secretary Clinton faces is not so much within the Department of State, but rather the willingness of the Congress to give her the resources that are needed to conduct these activities. And -- and the truth of the matter is – and I'm really on thin ice here...

SESNO: Oh, but keep going.

GATES: ... the Congress is structured in such a way that our committees of jurisdiction tend to look at things in stovepipes. So Hillary's committees look at foreign policy in terms of diplomacy and so on and AID. Ours look at it in terms of the military. The intelligence folks have their committees.

And -- and so, except maybe at the very top level of the Congress, I think there are not people who have the same integrated view of the challenges facing our country and the opportunities we have to deal with them that we do sitting in the Situation Room.

And the question is, how do you -- how do you build a constituency in the Congress over a period of time not only to grow the civilian national security part of our government, meaning the non-DOD part, but to provide the tools that are necessary and that take years to build, in terms of talent and -- and capacity, to be able to conduct America's relationships abroad? And I -- I think that's a challenge.

SESNO: Do you have an answer to that?

CLINTON: No, go ahead.

SESNO: OK.

AMANPOUR: Well, I was just struck by what the Secretary said about I think there should be parts left of the hammer. And I want to go back to Afghanistan, because...

GATES: Well, I'm all for hammers. I just want something other than

hammers...

AMANPOUR: In a...

GATES: ..or in addition to.

AMANPOUR: In Afghanistan, the notion of bombing from the air and going after militants from the air has caused a lot of civilian casualties and a huge drop-off for American public support amongst the people there.

Do you think that it's possible to continue using that as a primary weapon against -- against militants, just in terms of its effectiveness?

And do you think that it's moral to use that as a primary attack against the militants?

GATES: Well, I think one of the principle changes that General McChrystal has -- has brought -- and I will give General McKiernan credit, his predecessor, for beginning to move away from the use of airpower, and particularly in offensive operations. And I think General McChrystal has underscored this. And a central element of his strategy in Afghanistan is to get away from the use of air power and the potential for mistakes that create civilian casualties and that every civilian casualty is a strategic defeat for -- for the countries trying to help the Afghan government and people.

And I would just say this. We will continue to use air power to defend our own troops. If they are in trouble, we will use air power to defend them.

Where -- where I think General McChrystal has drawn a line is in using air power in offensive operations.

SESNO: So let us go now to your questions from the floor. We're going to ask you to keep your questions as -- to identify yourself. We have two levels of participants (NOT ON TAPE -- students from the School of Media and Public Affairs and from The Elliott School. Give us your name, your school and a brief response -- a brief answer, a brief response. We'll get in as many as we can.

Go ahead.

KATELYN DOWNS: OK. Hi. My name is Katelyn Downs and I'm a senior here in the School of Media and) RESUME TAPE: Public Affairs. I'm from Columbia, Maryland.

My question is for Secretary Clinton.

On your first two foreign trips as secretary of State to the Middle East and Asia, you embedded local bloggers in your traveling press corps from each country that you visited. You also participated in Web casts where you answered viewers' questions. You were cast in Beijing and over 10 million viewers, where you discussed climate change. We were just discussing Twitter.

My question to you is, how do you see new media in the future of public diplomacy?

And what types of strategies do you think would be most effective in the future that use new media?

CLINTON: Well, that's a great question because I think that new media is the reality. And part of what we're trying to do is to bring that into public diplomacy and make it one of those tools in the toolbox, to try to not just have government to government contacts and official sorts of communication, but really try to reach out to the people in countries to have a better idea of who we are and what we stand for.

I think there has been a tremendous opportunity because of President Obama, where people really have opened up to America again. And we're trying to fill that with content. We're trying to make it as interactive as possible, give people around the world the idea that we really care what they think about. I mean we may not always agree, but we're back to listening. We're back to engaging.

Because in today's world, there's too many sources of information coming at people and we need to be part of every possible approach that can be taken.

So I think it's -- it's critical and we've got some great young people at the State Department who are designing this for us. And I feel very good about the -- the start that we've made. But we have a long way to go.

SESNO: And you -- and you're hiring?

CLINTON: We're hiring. That's right. We are actually hiring. We're increasing -- all things hopefully coming through in our budget -- we're increasing the numbers of foreign service and civil service personnel, because the -- the need is so great.

SESNO: We have some very qualified people here.

Next question, please?

QUESTION: Hi, my name is Carlos. I am from Sao Paulo, Brazil, and I'm also in the Elliott School. My question is for Secretary Clinton.

Madam Secretary, what do you think of the political crisis in Honduras at the moment right now and the apparently intensifying battle between left and right politics in Latin America, what does that mean for democracy in general in Latin America and also for U.S. relations with Latin America? And do you think the current situation in Honduras could foreshadow similar events in other countries, specifically those led by leftist presidents in Latin America?

CLINTON: Well, I'm glad you asked that, because very often we don't talk enough about our -- our nearest neighbors in this hemisphere. And we've spent a lot of time with this new administration working with our friends and allies, because you're right. There has been a pulling away from democracy, from human rights, from the kind of partnership that we would want with our -- our neighbors.

So in Honduras, we're standing for the principle of democratic and constitutional order. And we have done that, I think, much to the amazement of many of the very leaders you're talking about who have become increasingly anti-American in their actions and their messages.

So I think it's important that the United States do everything we can to prevent either the hijacking of democracy by people who get elected once and then decide there never should be a real election again or by the return to military coups, where people are elected and, even if you disagree with them, they should finish out their term in an – an orderly way.

So we're -- we're working very hard to reach a conclusion in Honduras that will permit the elections to go forward, that will follow what President Arias of Costa Rica did in the San Jose Accords to try to get Honduras back on the path to a -- a more sustainable democracy.

(NOT ON TAPE The people in Honduras deserve that. They really have struggled hard to get to where they were before there was the disruption and the exiling of President Zelaya. And we hope that we can help them get back on the right path.

SESNO: We have time for one last question. Go ahead.)

RESUME TAPE QUESTION: Good evening. My name is Seth Himan. I am a junior in the Elliott School of International Affairs. I'm from Bay Ridge, Brooklyn.

My question tonight is to you, Secretary Gates. You both mentioned how you were pleased with the Pakistani government and how they were combating the Taliban in Afghanistan. That being said, it is -- it is a known fact that the Pakistanis are always worried about the Indians and their -- their presence, especially being a nuclear power.

I was wondering if you could talk about -- if you believe that the ISI and other members of the Pakistani military apparatus, if they are still supporting the Taliban as a counterweight to India?

GATES: Well, you know, I first started dealing with the ISI when we were partnered working against the Soviets and supporting the Mujahedeen in the early 1980s. And Pakistanis, obviously, established very close relationships with a variety of the Mujahedeen groups, Gulbuddin Hekmatyar and -- and -- and a number of others.

There obviously is the question of whether they have sustained those relationships and -- and what the nature of those relationships might be. We talked to them about this, and I think that the clear – the clear path forward is -- is for us to underscore to the Pakistanis that we -- we are not going to turn our backs on them as we did in 1989 and 1990.

We turned our backs on Afghanistan. We turned our backs on Pakistan. They were left to deal with the situation in Afghanistan on their own.

Their worry is what happens in the future. Will we be there? Will we be a constant presence? Will we be supportive of them over the long term?

I think, in terms of the way they look at Afghanistan, the way they look at the region, it depends on the degree of confidence that they have in us that we will be a reliable partner of theirs going forward. I think that shapes the view of the Pakistani government, and that includes the ISI.

AMANPOUR: There's so much more to talk about, but thank you both very, very much for joining us.

Thank you, Secretary of State Hillary Clinton.

Thank you, Secretary of Defense Robert Gates.

Thank you to Frank Sesno and to all of George Washington University. Good night.