Secretary Clinton, I'd like to start with you.  This has been a big week for talking about deterrence, especially deterrence against Iran.  There was the Nuclear Posture Review, President Obama and President Medvedev talking about sanctions in Prague.  And yet we learned that Iran is announcing the third generation of centrifuges, six times faster than the previous generation.  Is Iran not saying to the United States, "We are not deterred"?

                SEC. CLINTON:  Well Jake, it has been a very positive week for American foreign policy, and particularly with respect to our nuclear posture.  When it comes to Iran, we take everything they say with more than a grain of salt, because we know that they have a tendency to say things that may or may not be carried out, may or may not be accurate. 

                But in fact, their belligerence is helping to make our case every single day.  Countries that might have had doubts about Iranian intentions, who might have even questioned whether Iran was seeking nuclear weapons, are having those doubts dispelled as much by the evidence we present as by what comes out of the leadership of Iran. 

                Q     Secretary Gates, just a year-and-a-half ago, you had a different boss but you had the same job.  And you were expressing support for the idea that nuclear weapons can be an effective deterrent against chemical and biological weapons. 

                You said that that's how it worked during the first Gulf War.  It's a refrain that a lot of Republicans have talked about, that the United States is taking things off the table that would deter other countries. 

                Did you change your mind? 

                SEC. GATES:  Well, I think what's happened is, the situation has changed.  We have more robust deterrence today because we've added, to the nuclear deterrent, missile defense. 

                And with the phased adaptive approach that the president has approved, we will have significantly greater capability to deter the Iranians, because we will have a significantly greater missile defense. 

                We're also developing this Conventional Prompt Global Strike, which really hadn't gone anywhere in the Bush administration but has been embraced by the new administration, that allows us to use long-range missiles with conventional warheads. 

                So we have -- we have more tools, if you will, in the deterrence kit bag than we used to. 

                Q     Secretary Clinton, the United States, according to the Nuclear Posture Review, the United States will not be developing new nuclear weapons. 

                China will.  Russia will.  You said, when you were running for president in 2007, presidents should be very careful at all times in discussing the use or non-use of nuclear weapons.  I don't believe that any president should make any blanket statements with respect to the use or non-use of nuclear weapons.

                Did you change your mind?

                SEC. CLINTON:  No, Jake, because I think if you actually read the Nuclear Posture Review, you'd make three conclusions.  First, we intend to maintain a robust nuclear deterrent.  Let no one be mistaken, the United States will defend ourselves and defend our partners and allies.

                We intend to sustain that nuclear deterrent by modernizing the existing stockpile.  In fact, we have $5 billion in this year's budget going into that very purpose.

                We believe -- and this is a collective judgment from this government, that is certainly shared by the secretary of Defense, the chairman of the Joint Chiefs, the secretary of Energy and the others, along with the State Department, who worked on this Nuclear Posture Review -- that we can have the kind of deterrent we need by modernizing our stockpile but not necessarily having to replace and build new nuclear weapons. 

                But in the posture review, we very clearly say that we're going to our experts, we're going to use this $5 billion, and if the experts conclude that refurbishing, reusing nuclear weapons -- because part of what they're going to be looking at is how you upgrade the innards of the nuclear weapon to make sure that it is going to be safe, secure and effective.  But if there is a conclusion down the road that there does have to be consideration for some kind of replacement, that decision will go to the president. 

                We don't think that we'll get there.  We think that we have more than an adequate nuclear deterrent, and, with this emphasis on our nuclear stockpile and the stewardship program that we are engaged in, that we'll be, you know, stronger than anybody in the world -- as we always have been -- with more nuclear weapons than are needed many times over.  And so we do not see this as in any way a diminishment of what we're able to do.

                SEC. GATES:  Let me -- let me just chime in, in this respect.  The Reliable Replacement Warhead program that existed in the past was really a means to an end; it was a means to modernizing the nuclear stockpile, as Secretary Clinton says, making it more reliable, safer and more secure. 

                It -- that -- the policy of the Bush administration was also not to -- not to add new nuclear capabilities.  This was about how do you make the stockpile safer and more reliable. 

                The approach that we now have is intended to do exactly that.  It offers us a path forward, as Secretary Clinton says, in terms of reuse, refurbishment, and, if necessary, replacement of components, not an entire warhead necessarily.  So the chiefs and I and the directors of the nuclear labs are all very comfortable that this puts us in a position to modernize the stockpile. 

                And the $5 billion that Hillary's referred to is actually just what's in our budget to -- for this program.  There's another big chunk of money in the Department of Energy budget for this infrastructure and modernization program as well.  So we think this is a pretty robust approach to sustaining and modernizing the stockpile.

                Q     Let's turn to the nuclear security summit that's about to start.  Prime Minister Netanyahu of Israel has said he's not going to come amidst concerns that some of the Arab and Muslim countries, Egypt and Turkey in particular, were going to raise the worst kept secret in the world, that Israel has nuclear weapons, and the fact that Israel is not a signatory to the Non-Proliferation Treaty, even as the United States tries to cajole North Korea and Iran to abide by that treaty.

                Don't they have a point?  Doesn't this ally of ours have nuclear weapons?  And why aren't they -- or India or Pakistan, for that matter -- signatories?

                SEC. CLINTON:  Well, part of the goal of the nuclear security summit is to focus on the threat from nuclear terrorism.  And we don't believe the threat from nuclear terrorism comes from states; our biggest concern is that terrorists will get nuclear material. 

                We fear North Korea and Iran because their behavior, as -- in the first case, North Korea being already having nuclear weapons, and Iran seeking them, is that they are unpredictable.  They have an attitude toward countries like Israel, like their other neighbors in the Gulf, that makes them a danger.

                So we are focusing on the two states, but we're also very concerned about nuclear material falling into terrorist hands.  And that's a concern that we all share.  So part of the challenge is to bring the world together, as President Obama's doing in the nuclear security summit, to have everyone sign off on an agreed-upon work plan that will enable us to begin to try to tie up these loose nukes and these loose nuclear materials to make sure they don't fall into the wrong hands. 

                And Israel will be represented by the deputy prime minister and will be at the table as we begin to try to figure out how to deal with this particular problem.

                Q     Is it a good thing that Netanyahu's coming [sic], because it would have made the summit into a sideshow?

                SEC. CLINTON:  Well, that's a decision for every government to make as to who comes and who doesn't come.  I mean, Prime Minister Brown's not able to come; Prime Minister Rudd's not able to come.  You know, there are things that happen in countries that make it difficult for heads of government or heads of state to travel, as we saw with President Obama having to cancel his trip to Indonesia and Australia, to be rescheduled later.

                So the point is, the countries will be represented.  And the overall goal of this nuclear security summit is to make progress.  I have to say, Jake, you know, this is something that Secretary Gates and I have said repeatedly.  

                You know, the threat of nuclear war, nuclear attack as we grew up with in the Cold War, has diminished.  The threat of nuclear terrorism has increased.  And we want to get the world's attention focused where we think it needs to be, with these continuing efforts by al Qaeda and others to get just enough nuclear material to cause terrible havoc, destruction and loss of life somewhere in the world. 

                Q     President Obama, officials say, is contemplating presenting a peace plan to help jumpstart the process, between the Israelis and the Palestinians, which arguably is worse off now than it was a year and a half ago.  Although at a certain point, there's just bad and you can't go any lower than that. 

                But what advice do you give President Obama, when it comes to whether or not he should offer a peace plan? 

                SEC. CLINTON:  Well, I never share advice that I give directly to any president. 

                Q     Well, then hypothetically? 

                SEC. CLINTON:  Well, and I don't answer hypotheticals. 

                But I will say this, that this administration from the very first day has made it clear.  We are committed to pursuing a path of peace in the Middle East, and to get the two parties to get to a point where they can engage in negotiations again, to deal with these very difficult final status issues. 

                Our goal remains the resumption, the relaunch of negotiations -- both indirect, eventually leading to direct -- and that's our focus. 

                Q     Secretary Gates, turning to Afghanistan, when you hear President Karzai refer to the 87,000 troops under your command as occupiers and suggest that he could envision joining the Taliban, how does that affect you? 

                Does it make your blood boil? 

                SEC. GATES:  Well, I think, you know, this is a man who's, first of all, a political leader.  He has domestic audiences as well as foreign audiences.  What I can tell you is that General McChrystal continues to meet with him regularly.  They have a very positive relationship.  He gets very good cooperation out of President Karzai.

                I think that the Afghans are very concerned about their sovereignty.  And they are very concerned that it be clear who is the president of Afghanistan, and that he be treated with respect because he is the representative of the people of Afghanistan and their sovereignty.  And I think that -- I think that that kind of cooperative relationship, certainly that he has with -- and I can only speak for General McChrystal's side of it, but I think General McChrystal feels that this is a man he can work easily with.  And he has taken him to Kandahar.  He has indicated he's willing to go to Kandahar repeatedly for these shuras, as the Kandahar campaign gets under way.

                So I think that the -- that the day-to-day working relationship, certainly on the military side, and between General McChrystal and President Karzai, is working well.  And I think -- I think we, frankly, have to be sensitive in our own comments about President Karzai in terms of being mindful that he is the embodiment of sovereignty for Afghanistan; also, in the way we treat him.

                Q     We only have a couple more minutes, but, Secretary Gates, WikiLeaks recently released a video that showed U.S. troops killing some civilians in Iraq.  I understand the fog of war, and I understand that this was a very difficult situation.  Does the release of that video and the fact that that happened damage the image of the U.S. in the world?

                SEC. GATES:  I don't think so.  They're in a combat situation.  The video doesn't show the broader picture of the firing that was going on at American troops.  It's obviously a hard thing to see and it's painful to see, especially when you learn after the fact what was going on.

                But you talked about the fog of war.  These people were operating in split-second situations.  And, you know, we've investigated it very thoroughly.  And it's unfortunate.  It's clearly not helpful.  But by the same token, I think -- think it should not have any lasting consequences.

                Q    Okay.  I only have a couple more minutes.  Secretary Clinton, I do want to ask you a couple of domestic questions, because obviously your history is not just that of an expert on international affairs.

                First of all, there is a Supreme Court opening.  What advice would you give President Obama?  Your husband had two fairly smooth confirmation battles -- not battles, confirmation of nominees, Breyer and Ginbsurg.  Sotomayor ultimately was confirmed overwhelmingly, but it was a little contentious.  What advice would you give President Obama?

                SEC. CLINTON:  Well, I think President Obama is fully aware of this great responsibility and opportunity that Justice Stevens' retirement presents him.  And as a former law professor, I know he is devoted to the Constitution and understands the critical role that the court plays in so many areas of our lives as Americans.  And I'm confident that he's going to nominate a highly qualified person. 

                And I hope that there will be a smooth confirmation, because whoever the president nominates will be qualified to sit on the court.  And I think it would be really reassuring for the country to see Republicans and Democrats working together to confirm a nominee as soon as possible.

                Q     And lastly, health-care reform.  When you look at President Obama's success, that he was able to get this done, do you think, oh, that's how you do it?  Or do you think that the only way he was able to do it was because you and your husband stormed the castle first, and even if it didn't work, you laid the groundwork for President Obama to succeed?

                SEC. CLINTON:  Jake, I don't think either of those things.  I think, thank goodness,  finally the United States is going to have a system that will begin to meet the needs of all of our people, reform our insurance industry, which is long overdue, begin to control costs, which is absolutely critical.  And, you know, it's been a long time coming.  It goes back many decades.  And I think it's an extraordinary historical achievement, and I'm delighted to, you know, have seen it come to pass.

                Q     Secretary Clinton, Secretary Gates, thanks so much for joining us.

                SEC. GATES:  Pleasure.

                SEC. CLINTON:  Thank you.

                (C) COPYRIGHT 2010, FEDERAL NEWS SERVICE, INC., 1000 VERMONT AVE., NW; 5TH FLOOR; WASHINGTON, DC - 20005, USA.  ALL RIGHTS RESERVED.  ANY REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION IS EXPRESSLY PROHIBITED.

                UNAUTHORIZED REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION CONSTITUTES A MISAPPROPRIATION UNDER APPLICABLE UNFAIR COMPETITION LAW, AND FEDERAL NEWS SERVICE, INC. RESERVES THE RIGHT TO PURSUE ALL REMEDIES AVAILABLE TO IT IN RESPECT TO SUCH MISAPPROPRIATION.

                FEDERAL NEWS SERVICE, INC. IS A PRIVATE FIRM AND IS NOT AFFILIATED WITH THE FEDERAL GOVERNMENT.  NO COPYRIGHT IS CLAIMED AS TO ANY PART OF THE ORIGINAL WORK PREPARED BY A UNITED STATES GOVERNMENT OFFICER OR EMPLOYEE AS PART OF THAT PERSON'S OFFICIAL DUTIES.

                FOR INFORMATION ON SUBSCRIBING TO FNS, PLEASE CALL CARINA NYBERG AT 202-347-1400.