Today the Committee on Foreign Relations meets to continue our ongoing oversight of American policy toward Iraq.

The coalition intends to hand over sovereignty to an Iraqi government six weeks from tomorrow.

We're pleased to welcome Mr. Richard Armitage, deputy secretary of state; Mr. Paul Wolfowitz, deputy secretary of defense; Lieutenant General Walter Sharp, director of strategic plans and policy for the Joint Chiefs of Staff.

We look forward to a wide-ranging discussion that further clarifies the United States plans for the Iraq transition.

This is the 19th hearing on Iraq the Foreign Relations Committee has held since January 2003, and the fifth in this past month. Tomorrow we will hold another hearing on Iraq that will feature several expert witnesses from outside our government.

Within the substantial bounds of Congress' oversight capacity, we are attempting to illuminate United States plans, actions and options with regard to Iraq, both for the benefit of the American people and to inform our own policy-making role.

I am convinced that the confidence and commitment demonstrated by the pronouncement of a flexible but detailed plan for Iraq is necessary for our success.

With lives being lost, billions of dollars being spent in Iraq, the American people must be confident that we have carefully thought through an Iraq policy that will optimize our prospects for success.

And moreover, a detailed plan is necessary to prove to our allies and to Iraqis that we have a strategy and that we are committed to making it work. If we cannot provide this clarity, we risk the loss of support of the American people, loss of potential contributions from our allies, and the disillusionment of Iraqis.

As the June 30 transfer of sovereignty draws closer, violent attacks on coalition forces have increased and power struggles between Iraqi factions have intensified. The lack of security has hampered political and economic development in key parts of Iraq, and many nongovernmental aid organizations have pulled out of Iraq.

Adding to the difficulties, the appalling revelations about prisoner abuse in Iraq have repulsed Americans and hurt our reputation in the international community.

In dealing with the scandal, we need to establish absolute accountability and stay true to our values without reducing our efforts to overcome terrorism.

At this critical juncture, the committee and the American people need to hear directly from the administration. Are U.S. plans for building Iraq shifting to address the new realities on the ground? And have sufficient resources been identified to carry through with our plan?

The Senate confirmed Ambassador John Negroponte to be ambassador to Iraq on an expedited basis to ensure that he and his team would be in place quickly. We're interesting in knowing how the State Department plans to staff, house and secure what will be one of the largest embassies in the world.

Undersecretary Marc Grossman has testified that the embassy could cost more than a billion dollars, but these funds were not included in the fiscal year 2005 budget request.

The administration recently requested an additional $25 billion in contingency funds for Iraq and Afghanistan, but this amount does not apparently include any funding for the new embassy.

LUGAR: Our diplomatic forces, as well as our military forces, must have what they need to succeed.

I'm especially interested in details surrounding the use of the $18.4 billion provided for Iraq by the emergency supplemental signed last November 6th, 2003.

In this bill, Congress gave broad authority to the president to control these funds through the Office of Management and Budget. The OMB report submitted last month showed that only $2.3 billion of the $18.4 billion has been obligated by March 24, 2004.

Given the urgency of reconstruction efforts in Iraq and the role that they play in a successful outcome for the United States, it's perplexing that only about 12 percent of the money has been obligated. Committee inquiries indicate that reconstruction projects have been slowed by a long bureaucratic contracting process overseen by OMB and the Department of Defense.

In addition, OMB reports lack specificity. In many cases, the reports failed to identify the agency responsible for carrying out reconstruction projects.

Our committee needs to be reassured that Congress' intent is being fulfilled, that there is no unnecessary delay in reconstruction efforts.

Now, in Iraq we are perceived more as an occupation force by some than as a friend in helping to nurture a new nation. Delays in reconstruction undercut United States credibility and increase suspicions among Iraqis who are impatient for improvements. Without tangible progress in reconstruction, Iraqis will perceive little benefit in our presence.

Achieving the transfer of sovereignty on June 30, 2004, was always going to stretch our capabilities, but since we are firmly committed to that date, we should be attempting to accelerate stabilization and reconstruction in every possible way.

We are hopeful that Ambassador Lakhdar Brahimi will be successful in his work to construct an interim Iraqi government.

The Iraqis themselves must reach internal political consensus and balance, competing Sunni, Shia and Kurdish factions and their thoughts.

LUGAR: Once the new government is named, the transition to sovereignty should begin immediately.

If possible, in my judgment, we should establish the United States embassy before the June 30 transfer and bring Ambassador Negroponte in earlier. Ambassador Bremer has provided extraordinary service, but at this stage he will begin to take on lame-duck status.

Undersecretary Grossman testified on April 22 about the importance of engaging the interim Iraqi government as soon as it's selected. We cannot simply turn on the lights in the embassy on June 30 and expect everything to go well. We must be rehearsing with Iraqi authorities and our coalition partners how decision-making and administrative power will be distributed and exercised.

It is critical therefore that Ambassador Negroponte and his team be put in place at the earliest moment.

And we should also be accelerating negotiations to complete a United Nations Security Council resolution to give international legitimacy to the new Iraqi government and to define new security arrangements.

In addition, the United Nations and the new interim government should consider accelerating elections scheduled for January 2005 or December 2004 for the transitional and maybe the permanent Iraqi government.

We are especially appreciative to have our witnesses with us today.

Now, let me just say, as a point of personal privilege and likewise history, that about 19 years ago in 1985, when I was newly anointed chairman of the Foreign Relations Committee on the first occasion, Paul Wolfowitz and Rich Armitage came before the committee on that occasion to talk about the Philippines. Their testimony was far-sighted and courageous.

In a chapter of a book that I wrote about the situation, I have stated that, for whatever it is worth, because it was remarkably prescient with regard to events that occurred throughout 1985 and the elections in February of 1986 and subsequently.

And my admiration for these two gentlemen has remained unabated ever since.

LUGAR: I appreciate especially your coming today at this important time for both our committee and for our colleagues and for the American people who will witness this hearing.

Senator Biden has been delayed by train difficulties, pure and simply. He will be here. And when he arrives, I will call upon him, of course, for his opening statement and comment at that transition.

And at some stage we will have, as the committee knows, a roll call vote; approximately at 11:15. We will try to continue the hearing throughout that time. I will step over to the floor and vote as rapidly as possible and call upon one of my colleagues to chair the meeting so we may continue with our deliberations.

We thank the witnesses for coming, and we look forward to hearing from them, first of all, in the order that they're listed in our agenda, which would be Secretary Wolfowitz and then Secretary Armitage.

ARMITAGE: I want to echo Paul's comments about your kind comments regarding us. It's been a pleasure to serve with you and in front of you, many times -- through the Philippines and other different foreign policy activities. And we're proud again to be here today.

You mentioned that you want to see things move to autonomy as rapidly as possible. Eleven of the Iraqi ministries right now are autonomous, and two more this week will become autonomous.

So that means their ministers make all the decisions, prepare the budgets, are responsible for all the programs, et cetera. And the CPA folks who have been in those ministries revert to the position of senior adviser. And we'll atrit these away when the ministers themselves tell us that they feel that they no longer need senior advisers.

That's a story, I think, that has been untold: 13 of the 25 ministries this week are autonomous.

You talked about John Negroponte. Thank you very much -- and you other Senate colleagues -- for being so rapid in his -- both the nomination, the hearing and the confirmation.

Now, I understand the desire to have John out in Iraq as soon as possible. But let me explain our reasoning. We want to make sure that there's a clean break between Ambassador Bremer and Ambassador Negroponte.

Ambassador Negroponte is not Mr. Bremer's successor. He is the first U.S. ambassador to a sovereign Iraq, and we're trying to make that point dramatically.

We also want John's expertise as we move forward to another U.N. Security Council resolution, which I'll get to.

But we tried to meet you half way, sir. We chose as the DCM an ambassador from Albania who is a decorated Vietnam combat officer. We chose him for that reason as well as his overall leadership skills because we wanted to send him out early; he's there now. He's arranging the embassy. He's putting together the different political shops, governance shops, et cetera, right now.

We thought it was very helpful to have someone who, frankly, spoke the same language as our military colleagues and one who has walked the walk, as well as talking the talk.

Jim Jeffrey is there now. He's getting the job done for us.

You mentioned funding. We're going to need about $483 million for the fourth quarter of the fiscal year, that is from July through September.

Right now I can lay my hands on $477 million. The $6 million that I don't quite have I plan to get by charging other agencies for their building, et cetera. With the State Department we have these cross-servicing agreements, so that's not a particular problem.

We do estimate, as Marc Grossman told you, that it will be about a little over a $1 billion to run an embassy for fiscal year '05.

ARMITAGE: And this money, I'm pleased to say, will be coming forward -- requesting at the beginning of the year, in a supplemental -- an administration-wide supplemental, or at least in a State and foreign ops supplemental.

I do want to be clear, however. The president has very kindly requested, and DOD has acceded, to continue to supply to the U.S. Embassy what we call the LOGCAP, the Logistics Civilian Augmentation Program, and security. And this over a year amounts to about $800 million.

So, when I finally come forward to you with a supplemental, then it will be, I think, somewhat less than a billion dollars to operate the embassy.

We've got three properties that are in the process of renovation. They will be completed by the 15th of June. One is a residence which will serve as a chancery. It's inside the Green Zone. The palace which Ambassador Bremer is in now will be an annex. And Ambassador Negroponte will move into the residence, which Ambassador Bremer now occupies.

A little bit about the UNSCR: We desire to move ahead as rapidly as possible. And we've had informal consultations in New York and most recently with the G-8 foreign ministers here in Washington on Friday.

There's not a piece of paper that we've put forward. We've gleaned and garnered all the ideas of those who are most interested. We do want to await the outcome of the Brahimi consultations. Then we'd have an actual government which we would want to support in the resolution.

But we want to accomplish several other things as well. We want to make it very clear that occupation is over, sovereignty is Iraqis', the assets gained from the sale of oil belong to Iraqis now; those types of things.

We also want to talk about the security arrangements moving forward. We do feel, under Security Council 1511 and other associated memoranda, we have sufficient basis to continue to operate in Iraq. However, we would want, and many of our partners are desirous, of having a further U.N. Security Council resolution which makes this fact well known.

ARMITAGE: So I've tried to respond to several of your items. One, if I may, about funding. I said I've got about $477 million. $196 million of that will come from the OMB 4th quarter apportionment, $97 million of it comes from '03 and '04 monies which have already been appropriated, and the $184 million remaining would be out of the so-called 1 percent funds which, following the law, the Iraq Reconstruction and Redevelopment Fund, up to 1 percent of the money was allowed to be used for administrative costs. So I think we've got a pretty good handle on that and I hope you'll agree with me by the end of the hearing.

So I'll stop there, sir, and move forward to the questions.

LUGAR: Thank you very much, Secretary Armitage.

We'll try to have a 10-minute question round. At this point we have good attendance, and I'll proceed with the questions. I appreciate your response to some that I have raised in the opening statements.

I'm going to ask that you respond, both of you, to questions that will be submitted for the record. We have gotten into a detailed list of questions regarding the $18.4 billion, and these are too voluminous for a 10-minute question-and-answer period. But it is important that you have an opportunity to detail, really, what is being done with the $18.4 billion or what will be done, and what problems have occurred in terms of our bidding, contracting and so forth.

I want to ask, in a more general sense -- Ambassador Brahimi will soon name Iraqi leaders. What is our plan, or what should be our plan, for Mr. Jeffrey, if he is on board in Baghdad, or for General Abizaid, for General Sanchez, to visit with these people?

My thought, as I've expressed in other hearings, is that it would be very helpful to have some rehearsal off-stage before the curtain opens on the 1st of July specifically about these issues, of putting an Iraqi face on both governance and security, and what that means.

What I suspect it may mean in terms of many Iraqis is that they will want to take more responsibility. And we may wish that that was the case.

Clearly, in Fallujah we have had a step forward that was very substantial, in both the vetting of the general and the troops. And Mr. Bremer has pointed out this should not serve as a model of how things may go elsewhere, but it certainly is interesting as an instructive, pragmatic example currently in the security area.

In the governance area, it's never been quite clear what sovereignty meant. And, as you pointed out, Secretary Armitage, 11 of the 25 ministries -- as I understand that there are -- are presently passed over and they're moving but, Mr. Bremer points out, probably won't get to the end of the 25 list before June 30.

LUGAR: Can either of you describe in the security area or in the governance area how these new leaders are coming together so that there is, at least, if not a smooth transition, some modus vivendi for people to talk as opposed to a public row as to who does what and push back by the Iraqis?

Would you have a go at this to begin with?

ARMITAGE: Be glad to, Mr. Chairman.

First of all, what Mr. Brahimi or Ambassador Brahimi is doing is finally coming up with a list, and it will be winnowed down to 30 names. And it is his suggestions for a president, two vice presidents, a prime minister and 26 ministries because it'll include the ministry of defense, as well.

And he is going around the country. He was in Irbil two days ago, with the late Ezzedine Salim, as a matter of fact, talking with Iraqis about various lists of names and winnowing them down.

We've seen some of them. We haven't seen them all. I don't think it does any good to talk about them publicly because what matters is not so much what I think or Paul thinks, it's what Iraqis think about those names.

Once they are named -- and we hope to have that done by the end of the month of May, perhaps the first week of June. And then the TAL annex, which we have spoken about in the past, will be the -- the pen is held by Mr. Pachachi, and he and his colleagues will write the TAL annex, which will document the responsibilities of the Iraqi interim government.

I don't expect that document to be extraordinarily voluminous because as this is not an elected government, Mr. Brahimi and Ayatollah Sistani and others have spoken about the need to run the day-to-day business of government and not to be involved in a long- term negotiations between the long-term agreements internationally or et cetera.

So I would see that we have a month or so roughly to work with the Iraqi interim government to make it very clear what sovereignty means. And it's not limited. They are sovereign. And this will be encompassed or spoken to in the U.N. Security Council resolution.

LUGAR: Secretary Wolfowitz?

WOLFOWITZ: I don't have a lot to add to that; agree with all of it.

We view moving forward in security area as definitely something that's going to be a partnership. So as soon as we know who our counterparts are, I think the kind of dialogue that you describe is something that should take place, and hopefully before the actual date that the government takes over.

You correctly said Iraqis look forward to taking more responsibility. I think you suggested we look forward to them taking more responsibility. That's part of this whole process.

One of the limitations, of course, is that this will not be an elected government. There will be an elected government at the end of this year. And I think Iraqis probably want this government to take more responsibility, but not too much.

To be helpful, Mr. Chairman, we have an easel chart that lists some of the specific powers and responsibilities that would flow to this interim government, according, at least, to the Transitional Administrative Law, and I think it bears out what Rich Armitage said: They are very extensive administrative responsibilities, but the most important task they have is to help organize and run elections for an elected transitional government at the end of this year.

LUGAR: On the point of elections, and this may once again have to be a pragmatic set of decisions, but there would be some virtue, I would think, in having elections for somebody even prior to December. By that I mean, it might be persons that are going to a constitutional assembly, it might be persons with some regional powers.

But it appears to me at this point the legitimizing of Iraqis through people voting for them, have some votes on the board here, may be very important, despite the formality that we've been talking about of December and January and then the following December and what have you, so that, in fact, there is the sense of sharing. If there are insurgents, if there are terrorists who don't like the situation, they're going to be shooting at Iraqis, as well as Americans. There are going to be some Iraqi people up front, with a supporting cast of Americans, in the security and in the governance situations, as opposed to the other way around.

LUGAR: And it seems to me without knowing precisely who the new leaders are going to be, what kind of responsibilities they have it be. We contemplated how we could have such a thing, whether you use the U.N. food rolls or whatever happens to be there -- maybe more rough and ready than the fastidious work that we would like to see later on. But have either of you thought about that? And what comment do you have?

ARMITAGE: Mr. Chairman, U.N. representative for electoral process Karina Pirelli has been in Iraq since April. And she has been trying to set the atmosphere for these elections. And the first task that she has undertaken is, again, garnering nominations from Iraqis themselves for the post of what we call federal election commission or they call Iraqi election commission -- seven of them. And there will eventually be seven.

She's winnowing down those names. They will be chosen by an international group of experts in electoral law. There will also be three director generals for a total of 10 people.

This is a first step in getting to where you want to be and where we all want to be late December-early January '04-'05. She has noted, as you have noted, that there's something contradictory about the ballot and the bullet.

But she's also noted that the spirit that she sees among the Iraqi people -- that when they see that they actually are going to have a buy-in, and if that means a vote, a say that their desire for this becomes much greater than the ability of enemies to defeat them. And she's noted past U.N. experiences in Timor and other places where elections took place in an atmosphere of some violence.

There are many municipal elections and neighborhood council elections which are being held with stunning regularity. And I've got the number in this book and I can't memorize the whole book. I think it's about 60,000 Iraqis hold some sort of elected position, some sort of position or another, not just in the Kurdish area where you'd expect it but throughout Iraq.

And it's not a position that comes without some danger. I mean, some of them have been assassinated because they look like they might be leaders who could stand on a larger stage.

So some of what you suggest is ongoing.

LUGAR: Let me intrude before my time is up. To what extent will the law that has been promulgated by the governing council now -- the one that suggests 25 percent participation by Iraqi women as a minimum -- or the freedom of speech and the freedom of religion clauses, other things that are very important, we hope, to Iraqis, very important to us -- what's going to happen to that?

LUGAR: Is this the law as we proceed?

ARMITAGE: The so-called TAL, the Transitional Administrative Law, will be the law of the land, and it embodies a stunning array of rights never before held by the Iraqis, and it will last and cannot be amended except by a transitional government, which would be in place with the election of a 275-person national assembly in January. They have the ability to amend laws.

I'm not going to say that it's perfect and I can guarantee you that women's rights and religious rights will be respected as we'd want them, but we faced this in Afghanistan, we faced it earlier this year and we prevailed. And I believe we prevailed, not because of the wisdom and the strength of our arguments, but because Iraqis hold their religion very dear, but they also hold the idea of secular government to be something very worthy.

So I have some optimism we'll prevail.

WOLFOWITZ: Mr. Chairman, if I might emphasize a point you made at the end of your question, that this is a key part of winning the military battle as well. And, in fact, page seven of my statement, I've got this quote from that notorious letter from that notorious terrorist Mr. Zarqawi where he says, "The problem is you end up having an army and police connected to the people. How can we kill their cousins and sons after the Americans start withdrawing? This is the democracy we will have no pretext in."

And also he refers to that as suffocation. It's winning for us; it's losing for them.

And if I might add, too, the points Secretary Armitage made about elections, there was a very interesting report recently in the Guardian of London that in some, I believe, it was 15 local elections in southern Iraq, in most of those the Islamists lost the election, and I think that tells you something also about what Rich said; that these are very religious people, but that doesn't mean they want a religious tyranny imposed on them.

LUGAR: Good point.

Senator Feingold?

FEINGOLD: Thank you, Mr. Chairman.

FEINGOLD: Let me first thank all of you and especially Secretary Armitage and Secretary Wolfowitz for being before us today.

It has always been important for you to appear before this committee as often as possible, but let me suggest that -- I hope this is the beginning of a pattern.

The American people, as you know, are extremely worried and concerned about what is happening in Iraq. And I think I can honestly say it goes all the way across the political spectrum.

There has never been a time when we need your answers and your guidance more, and I'm hoping this is the beginning of a very regular opportunity to have contact with you and ask these kinds of questions.

Secretary Wolfowitz, I want to ask you again how long we can reasonably anticipate needing a substantial troop presence in Iraq. I know that you can't give me an exact time frame; we've been through this before. But since our forces on the ground, training Iraqi security forces, and therefore we are in an excellent position to judge their capacities and to estimate how long it will be before they can provide for their own security, I would think you would be able to give me at least a reasonable estimate.

We've seen that slap-dash efforts to train and deploy Iraqi security forces can lead to dangerous failures and instability. So I guess what I want to know is, how long will it take to properly train Iraqis, such that they'll be able to provide for their own country's security, and for how long will security be primarily the responsibility of U.S. forces?

WOLFOWITZ: Senator, you know, because you said in your question, the course of war is simply not something one can determine. We can say, I think, with reasonable confidence that we have a plan to train and equip and organize very substantial Iraqi security forces by the end of this year.

We finally have the various obstacles to funding, I think, unblocked. I hope that's true. There have been some critical delays that have done harm.

We have unity of command for doing this. All the five Iraqi security forces will be -- the training and equipping and organizing of them will be the responsibility of a single lieutenant general, who happens to be the general who commanded for a year up in Mosul in northern Iraq, where the Iraqi security forces in fact have performed impressively in the fighting in the last month.

So I think we're on a course to substantial Iraqi security forces by the end of this year. But I can't tell you how strong the enemy will be. I can't predict exactly how things will go. But our goal is to put responsibility in their hands as quickly as we can and not too rapidly, to create problems.

FEINGOLD: So if I were to look at a memo where you're planning your goals and the goal was stated as a reasonable goal that by the end of this year that the United States will no longer be primarily responsible for the security, is that a realistic goal?

WOLFOWITZ: Senator, that's more than what I just said. What I said is there will be substantial capable Iraqi security forces by the end of this year, we believe. That's our plan.

How much they will still need help from the United States, I can't predict. We want it to be as little as possible.

I'll give you, sort of, real examples. In some of the fighting in recent weeks, Iraqi security forces have performed well, have been able to do things like going into mosques to seize weapons supplies. That's something that we would always prefer be done by Iraqis and not by Americans.

In the fighting I referred to up on Mosul, where the enemy attacked the government house, the governor, who by the way is a Sunni Arab, stayed there through the night through the fighting. The police initially left because they were out-gunned. The Iraqi Civil Defense Corps stayed and fought -- fought off the enemy. The police came back. Through all of it, they were in touch with General Ham, who had command of the American forces there. And I'm quite sure that the knowledge that General Ham was there to back them up if needed probably emboldened them and gave them courage. And that's the kind of arrangement we need to have.

We're in this to win, as I think you agree, and winning means having the Iraqis take as much responsibility as they possibly can but also not putting them so far out in front that they fail.

FEINGOLD: Thank you, Mr. Secretary.

Let me ask you a question about the transition. Let me start with Secretary Armitage.

When the CPA ceases to exist, what authority will take over the implementation of the $20 billion reconstruction program that has been financed by the U.S. taxpayers? Who's going to be in charge of that?

And I'd like to also here Secretary Wolfowitz's feelings on this.

ARMITAGE: Appropriated U.S. money, sir, the chief of mission, John Negroponte, will have the responsibility for it. For Iraqi money, which will be theirs and they'll have responsibility and they can contract with whomever they like.

FEINGOLD: So the ambassador will be in charge of the entire $20 billion?

ARMITAGE: Correct.

FEINGOLD: Secretary Wolfowitz, do you concur with that?

WOLFOWITZ: I do.

I'd point out that Iraqi funds are very substantial.

FEINGOLD: So the State Department will now have authority over the reconstruction funds? That's correct, isn't it?

ARMITAGE: That's correct.

FEINGOLD: Mr. Armitage, when do we expect to see a new Security Council resolution on Iraq and what will be, in your view, the substance of the resolution?

ARMITAGE: We and our friends on the Security Council are desirous of moving forward shortly after we find the shape and the names of the new Iraqi government. We think it would be very important to have as one of the elements of the U.N. Security Council resolution a support for that IIG.

ARMITAGE: Other elements which may very well find themselves in this will be, as I've said before: end of occupation, make a declaration of sovereignty for Iraq, make it clear that Iraqi assets -- particularly oil assets -- belong to Iraqis and would be managed by them, discuss security -- though we don't feel we need more, if you'll allow be to use the term, "international cover," we think it's a good thing and it would be very helpful for many of the other Security Council members to have a specific reference to security arrangements in Iraq during the time of interim Iraqi government.

Those are some of the things. There might be other elements. Everyone's got different ideas, but I'm pleased to say, in the consultations informally in New York, and more recently Secretary Powell had with the G-8, it was a pretty good comity of views. So I find everybody's within a certain box. And I think we'll be able to do this pretty well.

FEINGOLD: Thank you, Mr. Secretary.

Follow up to Secretary Wolfowitz: There are reports that our troop strength in Iraq will remain at about 135,000 troops until the end of 2005. Is that report inaccurate?

WOLFOWITZ: We don't know what it'll be. We've had changes, as you know, month by month. We have several different plans to be able to deal with the different levels that might be required. Our current level is higher than we had planned for this time this year. I have no idea what it'll -- I mean, I clearly don't know...

FEINGOLD: So it could well be accurate, then?

WOLFOWITZ: It could be. It could be more, it could be less, Senator.

FEINGOLD: Thank you.

Secretary Armitage, I've served on the, as you know, on this committee and on the Subcommittee on African Affairs for almost 12 years. One name that keeps coming up and is very familiar is the name of Victor Bout, because he appears at the center of an illicit arms trafficking network that has fuelled devastating conflicts in Angola, Sierra Leone, Liberia and elsewhere.

Is Victor Bout or any firm associated with Victor Bout providing air freight services for coalition forces in Iraq, as the Financial Times alleged in an article published yesterday?

Has the United States opposed including Bout on an asset-freeze list being compiled by the U.N., which targets individuals who are involved with the criminal regime of former Liberian President Charles Taylor? And if so, why?

ARMITAGE: As you, I have seen the name Victor Bout. I believe he's a Ukrainian arms merchant, or merchant of death. I certainly hope what you suggest is not true. And as far as I'm concerned, he ought to be on any asset-freeze list and anything else you can do to him.

FEINGOLD: So would you follow up with me on any awareness of that that might be available to the State Department?

ARMITAGE: Of course.

FEINGOLD: Secretary Wolfowitz, do you know anything about the question I just asked with regard to Mr. Bout? Has he been involved with providing air freight services for coalition forces in Iraq?

WOLFOWITZ: I don't know more than what you and Secretary Armitage know, but I share your concern about it and I will work with Secretary Armitage to look into it to try to fix the problem if there is one.

FEINGOLD: Thank you.

Secretary Wolfowitz, in the lead up to the war on Iraq, I repeatedly raised questions which I felt were never satisfactorily answered about what exactly the plan was for dealing with weapons of mass destruction in Iraq. And given the number of troops we had on the ground, when Baghdad fell and the wide-scale looting that ensued, I remained uncertain that a viable plan for securing this material ever existed.

Mainly, concerns about WMD in Iraq have fallen out of favor in the administration's remarks about Iraq because at least as far as we can tell we've not found what was advertised. But yesterday, as you know, we learned that an artillery round containing sarin gas was employed as an IED near Baghdad International Airport.

I'm wondering what this means to you in terms of what we did and what plans we had for securing any weapons of mass destruction as we entered Iraq and entered Baghdad.

WOLFOWITZ: Well in fact, as I think I know we briefed the Armed Services Committee in detail, and we had very extensive plans that transformed into what was called the Iraq Survey Group to find the weapons of mass destruction, to locate them, to make sure to the best of our ability they didn't leak out elsewhere.

And when David Kay stepped down, one of the reasons why we felt it was very important to continue the work of the Iraq Survey Group is not only to find out what may have happened to those things but also to secure them if they're around.

And I would note also, according to Stewart Cohen, at least, who was the national intelligence officer who prepared the NIE, that some 2,000 Iraqi officers were deliberately looting files and hard drives and so forth during the fall of Baghdad. So there was some pretty active work on their side apparently at trying to destroy at least records.

I don't know any more than what you've read in the newspapers about this device that has been discovered. It is obviously something that we're very concerned about. We're going to try to find out about it as much as we can.

FEINGOLD: Mr. Chairman, I'm sure my time's up. Let me just conclude by saying, a number of us started in late July and early August of 2002 to raise these very questions, to ask what was the plan with regard to a possible negative reaction from the Iraqi people, and also specifically what was the plan with regard to securing any weapons of mass destruction.

I, frankly, feel we were never given real answers to that, and I have a feeling that it's because there wasn't a serious plan, and I think at this point we're paying a serious price for it.

But I do thank the witnesses for their answers.

WOLFOWITZ: Senator, there was a serious plan. I'd be happy to give you for the record the full table of organization, the number of people that were planned to do it. A lot of thought went into it. It may not have been perfect, but there was a lot of work done on it.

FEINGOLD: I wish that we had been told about these plans, because whenever we made an effort to ask about it, we were just told to trust you, and we didn't get the assurance that we needed. But I would like to receive those materials.

Thank you, Mr. Chairman.

LUGAR: Thank you very much, Senator Feingold.

Senator Hagel?

HAGEL: Mr. Chairman, thank you.

Gentlemen, welcome.

Secretary Armitage, going back to the question Senator Feingold asked regarding a new U.N. resolution, how necessary is a new U.N. resolution as we move toward June 30th?

ARMITAGE: It's very desirable; it's not exactly necessary, except in political terms. I think politically this will find great favor with our major Security Council partners, both the P-5 and the elected 10, and I think it makes a rather dramatic point to the Iraqi people, sir.

HAGEL: Well, politically speaking, as we all know, that's the essence of the effort here. If we lose the Iraqi people, we've lost.

ARMITAGE: Exactly.

HAGEL: So I would hope that there is serious work being done now on working with our allies on getting a new U.N. resolution. You can assure this committee that's being done?

ARMITAGE: I assure the committee. I assure you personally. It is being done, and it is being done almost on a daily basis.

HAGEL: Thank you.

What additional resources could we expect from our partners, those not now participating in the effort in Iraq, if in fact we were able to get a new U.N. resolution? Resources meaning troops, meaning money, meaning training. Are we anticipating that?

ARMITAGE: Let me parse it if I may, Senator.

We would be desirous of getting greater NATO involvement, although 17 of the 26 NATO countries are on the ground with us in NATO. There aren't large numbers of ground forces in NATO: Only the French have large ground forces, and I think it's very unlikely that they may be involved.

One possible involvement for them on the ground might be if the U.N., or in the U.N. Security Council resolution, there's a call to provide forces to protect the U.N. as they go about their business of elections, et cetera. And that might be something that might find some favor.

We would be desirous of engaging NATO in greater talks, particularly about providing headquarters, perhaps where the Polish division has been, something of that nature. But I think, in candor, it's a little premature.

A new U.N. Security Council resolution could possibly encourage some of the South Asian nations to step up a little more, and that would certainly be a target of opportunity.

HAGEL: What about Middle Eastern countries?

ARMITAGE: I think it's unlikely. We've had discussions recently with King Abdullah, and I went around through the Gulf. We didn't specifically ask for forces, but there's a lot of neuralgia that exists in Iraq revolving around the neighbors. I think it might be a little premature.

HAGEL: Thank you.

WOLFOWITZ: Senator, I might add that we've been asking NATO for help, actually going back to December 2002. I did when I did in Brussels, and specifically said even those countries that may not support the war could contribute afterwards to reconstruction.

But, as Secretary Armitage said, their capacity is, unfortunately, declined substantially over the last 10 years. And even in Afghanistan, where NATO has an important role and has made a lot of commitments, they're having some trouble meeting some of their commitments, even in Afghanistan.

HAGEL: Thank you.

Let me take that point, Mr. Secretary, and ask about the reports, which I understand are accurate, that we will be moving 3,600 American troops from Korea into a brigade, the 2nd Division, into Iraq. Was that planned?

WOLFOWITZ: Let me put it this way. We had been discussing for some time with our Asian colleagues, with the Congress, the whole restructuring of the U.S. global footprint.

We have already made some adjustments to our posture in Korea, in both directions. We have moved troops off of the DMZ, where frankly, they were performing nothing except, kind of, a useless, and indeed I would say counterproductive, trip-wire function.

We are investing a great deal in our capability to reinforce Korea to the tune of, I believe the number is over $10 billion of various force improvements. But it was concluded over a year ago, that it was long overdue to reduce the strain on our Army that comes from having these continuous one-year unaccompanied tours in Korea.

So we had planned on some reductions. We need an extra brigade in Iraq, and in fact the brigade in Korea is ideally suited for that.

HAGEL: My understanding is that this will mean that for this brigade moving to Iraq from Korea is an additional 12-month commitment, in addition to the unaccompanied 12-month commitment they have just finished. Is that right?

WOLFOWITZ: Do you know, General Sharp?

SHARP: It will be a 12-month commitment, sir. As you know, we rotate troops into Korea on a continuous basis. So about half of them will have been in Korea already six months. So some of the tours will be short -- will be 12 months, others will go up to a maximum of 23 months.

WOLFOWITZ: Thank you.

HAGEL: So this was discussed with the Congress, this possibility of moving a combat brigade from Korea into Iraq. Isn't that what you just said, Mr. Secretary?

WOLFOWITZ: With the leadership of the committees, yes.

HAGEL: So Senator Warner, Senator Levin were consulted on this and they knew about it.

WOLFOWITZ: Either they or their staffs were, yes.

HAGEL: They or their staffs knew about it?

WOLFOWITZ: I had been told that, yes, sir. And I consulted with several senators.

HAGEL: Thank you.

Secretary Wolfowitz, how will prisoners, detainees, be handled after the transition of government in Iraq?

ARMITAGE: May I...

HAGEL: Secretary Armitage?

ARMITAGE: Right now, two classes.

ARMITAGE: There are POWs; there are criminals.

Criminals are handled right now by Iraqis. The management, as I understand it, of the military prisons are both the U.S. military working with the ministry of justice. And after the turnover, it is my understanding that we want as rapidly as possible to put those into the hands of Iraqis.

HAGEL: "As rapidly as possible," do we have any idea what that means?

ARMITAGE: I don't have that, sir.

HAGEL: Does anybody?

WOLFOWITZ: I don't.

HAGEL: It's a fairly significant issue, as we all know. It's been a little attention brought to this issue the last two weeks. I would have thought that this government would put some time into this, especially what we've just been through the last two weeks.

Can someone get back to the committee with some plan?

WOLFOWITZ: We absolutely will. I agree with you on the importance of it, Senator.

HAGEL: Thank you.

Secretary Wolfowitz, Secretary Armitage, you know about the latest Washington Post stories regarding polls.

Now, I don't subscribe completely to polls, but just for everyone's quick review here, last week, The Washington Post reported on a recent poll conducted by the CPA: 80 percent of Iraqis lacked confidence in the CPA, 82 percent disapproved of the United States and allied militaries in Iraq. Furthermore, 45 percent of those polled in Baghdad, 67 percent polled in Basra said they backed Muqtada Sadr. This was before the prison abuse issue. Then there was a subsequent poll taken as well.

How concerned are you with these numbers? Do you believe these numbers? Mr. Secretary?

WOLFOWITZ: I think we are concerned about them, and in fact, the reason why we have wanted to move toward Iraqi self-government is so that Iraqis feel that it's their people who are running their country, it's their security forces that are dealing with their country.

As you say, it's hard to know the reliability of polling data, especially in a country where people are, to put it mildly, not used to telling the truth to anyone. Although it is striking how some of these polls do seem to show important things. One of them is a poll that I've seen that shows very rapidly declining approval of our forces, but pretty steady confidence in Iraqi security forces.

I think it says that we're on the right track in moving as rapidly as we can to Iraqi self-government and Iraqi self-defense. We don't have an infinite amount of time however.

HAGEL: Thank you.

Secretary Armitage?

ARMITAGE: As Paul, very concerned about it.

ARMITAGE: I would note, though, usually if you look at the question a little more closely and see how we'd like you out of here but not now, our forces who are operating around Najaf as they've, anaconda-like, closed in a bit on Muqtada al-Sadr, have found the people coming out thanking them for these activities.

So we're very concerned. But I think it's a more complicated picture than that poll would represent.

HAGEL: Let me ask you both this: Do you believe a rising sense of nationalism in Iraq, if that's happening, is a result mainly of a target of the United States or an anti-American sense as much as anything else that may be occurring?

ARMITAGE: My understanding of Iraq historically is they've always had a good sense of their self -- themselves -- and their place in the region, in the world at one time as the center for science and alphabets and things of that nature. So I don't think it's a direct result of this.

The reputation of being Arab...

(CROSSTALK)

HAGEL: ... Americanism. You don't think it's an anti- Americanism?

ARMITAGE: No, I don't. I think it's the reputation in the Arab world has been of a very scratchy, tough people historically.

HAGEL: Thank you.

Secretary Wolfowitz?

WOLFOWITZ: I would agree with that, and I think overwhelming numbers of them are nonetheless -- whatever their feelings about our staying in Iraq -- grateful that we helped them to remove a terrible dictator.

HAGEL: Let me ask a question about sovereignty which you have both noted -- a couple of pieces.

One, what is the role -- what will be the role -- of the Department of Defense come July 1st?

And the second part of that is: What in fact, and I see your charts here, but what in fact is the power of this new government yet to be determined, undefined, we don't know who they are, as to security?

I see in the Washington Post this morning the good friend of the Defense Department, Ahmed Chalabi, who is a Iraqi Governing Council member, says Iraqi government must have exclusive and complete control over the army and all security services of Iraq come July 1st.

So if you would both handle each of those parts.

Secretary Armitage? Thank you.

ARMITAGE: Yes, Senator, thank you.

Iraqi forces will work for an Iraqi general who -- in the army, the military -- who will work for the ministry of defense. They will work in partnership -- partnership -- with coalition forces under, in the unity of command theory, a U.S. general.

The real question that you're asking is: Can they opt out of an operation if they don't want to or something of that nature? And the answer to that has to be yes. But if I may, this is not very unusual to us.

If you can think back to a fellow you all know by the name of Wes Clark; he in Kosovo when told the Russians were heading for the Kosovo airport, he told his British counterpart who worked for him to go stop them. The British said, "No, I think I'll check with headquarters for guidance on that issue." And he didn't do it.

So there will be a lot of management -- sort of alliance, coalition, partnership management as we go forward. But they are sovereign and they will be in charge of their forces.

HAGEL: Thank you.

Secretary Wolfowitz?

WOLFOWITZ: I agree exactly with what Rich just said.

HAGEL: OK, well that makes it easy. Thank you.

Mr. Chairman?

LUGAR: Thank you very much, Senator Hagel.

We welcome now the distinguished ranking member of the committee and are grateful that he has surmounted the obstacles presented to him this morning.

BIDEN: This is a hearing on funding for Amtrak, isn't it?

(LAUGHTER)

All the trains out of New York, Mr. Chairman, today, were exceedingly late and I do apologize because this is a very important hearing and I appreciate you calling it and our witnesses being here.

May I have permission to make my opening statement then save my questions until the next round so I do not...

LUGAR: Please proceed.

BIDEN: ... you know, use my time for a statement at this point?

And I apologize, gentlemen, for not hearing your statements -- you as well, General.

BIDEN: From my point of view, notwithstanding the meeting last week with the president, which I truly appreciated, I don't think things are going all that well in Iraq notwithstanding that our people have performed miracles, opening schools and hospitals and restoring some oil production and setting up local councils.

But these successes, I think, have been dwarfed by two towering deficits that the administration created: a security deficit and a legitimacy deficit.

And the result, I think we're losing support, as Senator Hagel suggested, although I'm not associating him with my remarks -- I don't want to get him in trouble. But we're losing the support of the Iraqi people.

And what I hope will -- you probably already started, but when I get around to questioning -- have an opportunity -- I'd like to know what our strategy is to erase those deficits, the deficit in security and legitimacy because I think both are needed to be erased in order to build a successful plan. The success, in my judgment, make sure -- and this is what I told the president -- in my judgment would be a stable Iraq, secure within its borders with a representative government that doesn't threaten its neighbors or threaten us.

I'm convinced that we can defeat the insurgent forces. But while military superiority is essential, I don't think -- quite frankly, I don't think you all do either -- it's enough. We also need an effective political strategy.

And based on a very brief briefing I got from my staff and the opening statements, although I'm sure they were necessarily truncated, my chief concern is I'm not sure we have one, and secondly -- my second concern is we appear to have lost the Iraqi people.

As Senator Hagel said, 82 percent of the Iraqi people oppose our presence, although some pockets, they very much want us to stay. They're in a conundrum as the president said in the different context. He could understand why they chafed at occupation. They know they have to have these forces in order to prevent a civil war from occurring, but they don't like the forces being there.

And only 23 percent support the Iraqi Governing Council. At the same time, as Senator Hagel pointed out, Sadr gets alarmingly high marks at least in two major cities.

And these numbers suggest that -- I would suggest these numbers would be worse if this poll had been taken after the debacle at the prison.

BIDEN: So my question is how do we reverse this downward dynamic?

I think we have to go back to first principles. First is, and I'm sure we agree, we can't want freedom for the Iraqi people more than the Iraqi people want it. And that's what the silent majority seeks in Iraq, I believe: freedom. I believe the polls all show, as well, that they neither want an Iranian-style theocracy, nor do they want another strongman.

But after being brutalized for three decades, they've learned to keep their heads down -- that middle, that 65 to 80 percent of the people that's that high.

It seems to me we have to create the conditions and encourage them to raise their heads. The Iraqi people must have more security and more security in their daily lives. And they must believe that there's a legitimate plan to return sovereignty to them and that it makes sense.

Second, it seems to me, we have to square the circle between their need for significant international support for years to come, both political, economic and security, and their growing frustration with U.S. occupation or any occupation for that matter.

And I think that requires investing our European and Arab allies more heavily in Iraq today and working with them to prepare Iraqis to take back their country tomorrow.

As it stands, the Iraqis are going to wake up on July 1st of the so-called transfer -- and I'm not belittling that, this transfer of some form of some sovereignty -- to a group of people who they don't know.

There's going to be no single national figure. There's going to be no George Washington. There is no Madison. There is no Benjamin Franklin that's part of this. I don't mean in terms of their thinking, even in terms of their recognition.

And so, they're going to wake up and the bulk of the Iraqi people are not going to know the bulk of the people in this new government, although I believe it will be viewed regionally as more legitimate.

They're going to see 140,000 troops, Americans with American patches on their shoulders still patrolling the streets, and a new super ambassador who they're going to wonder, I suspect, is going to be the one pulling the strings, and a cast, as I said, of unelected and relatively unknown political figures.

That's not in any way to denigrate the capacity or the legitimacy of those who will be chosen.

And it seems to me we have to change that dynamic. And in order to do that, the president has to articulate a single overarching goal that everybody can kind of understand.

And I think this presents a significant opportunity for the president to state a goal that everyone can sort of rally around, and a rationale.

BIDEN: And the goal should be that our job, the international community's job, is to hold successful elections in November of 2005. We want a civil election and not a civil war in December of 2005.

And I believe these elections should be the rallying point within Iraq, and quite frankly outside of Iraq, to build security and legitimacy. I think it's a rationale for European leaders who know they have a great stake in success or failure in Iraq to be able to justify to their people why they're there, with an implied end date to it; not a literal end date, an implied end date.

I believe it provides a rationale as well for Arab leaders to join in the effort.

I also believe that it provides a rationale for the interim Iraqi government to be able to speak to, to have interlocutors, to actually cooperate with this new military force, this old military force hopefully with a new face.

Because I asked the president in our meeting, I said, "Mr. President, we're all just plain old politicians. Imagine if you're about to be appointed to an interim government and you want to be a permanent, or at least an elected official running that country 13 months from now, or 16 months from now, and 82 percent of the people say, 'I hate the outfit that you're dealing with.' What are you going to do?"

I'm just a plain old politician, Mr. Secretary. You ain't going to talk to him. You're not going to be seen as cooperating with them. It will guarantee your defeat.

Now, this is the only thing I probably do know more than all you guys, just plain old politics.

And so, we have to provide them a rationale. Why are they going to be cooperating with, no matter what the face is, essentially a U.S.-led -- not essentially, a U.S.-led and dominant U.S. presence?

And I think this election process as a rationale for our staying cannot be repeated enough in my view.

And I also think it would be a strategy that the American people could understand and could understand that there's an end date, not a definite date, not a date to say, "We're out of here by such and such," but there is a strategy that is able to be articulated that the American people are smart -- and they are -- can understand.

Because we are also -- we issued a report here after the report done by the former controller by the Defense Department coming back last year saying the window of opportunity is closing in Iraq, meaning the Iraqi people. We wrote a report, the three of us, that basically said the window of opportunity in America is closing -- in America is closing.

And, fellows, we're all about the same generation. Once the folks decide this ain't going to work, I don't care how brilliant any of us are, I don't care how wonderful any plan we have is, it ain't going to work without the informed consent of the American people.

And so I think the president has an opportunity, and only the president can lead in this regard. And I would respectfully suggest the first order of business should be to form a contact group that would give those whose help we are seeking a seat at the table on the political decision. This includes the major powers in Europe. It includes the Security Council, not as a Security Council. And it includes our Arab allies who have a great deal to lose, and the incoming Iraqi government.

And I respectfully suggest that the president suggest publicly that he should literally call a summit of those folks. Get in the damn plane. Go to Europe. Pick a venue.

BIDEN: Meet -- and meet with the G-8 in a little bit. Meet. Meet. Find out what's the deal, how do we get them involved?

Secondly, the enormous logistical security requirements for elections are going to require a surge of security forces. It required that in Bosnia. It required that in Kosovo. It even, in a sense, required that in Afghanistan; and we're not quite doing it the same way, but it required it.

And the president should seek, I believe, agreement for NATO to take over multi-national security forces under U.S. command. I know, fellows, you know, we go back a long way, Mr. Secretary, about 30 years -- you a staffer and me essentially a staffer. A 29-year old United States senator is equivalent of being a staffer, only staffers know more, in this days. And notice I said "those days."

But the point is we know there's never been a single serious plan NATO has initiated that we haven't carried over to Brussels. Never. Never. So as that old song goes, "What's the plan, Stan?" We ought to show up.

Now I have met with a lot of your former colleagues. I've met with a total now of seven five-stars -- four-stars I should say -- who -- and I meet with them regularly in conferences, every single one of them reflecting various points of view in the military believe if the president says, "This is the deal I want," sits down, hammers it out at the NAC, authorizes you to hammer it out at the NAC, we can get a NATO-led mission. It's only going to be 3,000, maybe 7,000 forces over the next several months, but a NATO-led mission. That's an important symbolic and substantive change, in my view.

And so I believe that the president should ensure this new U.N. resolution you all talked about authorizes a NATO-led security force, supports the Brahimi plan for a caretaker government and elections, endorses a senior rep to be Iraq's primary international primary referee in what is going to be serious disputes between July 1 and January -- the end of January of '05 when these elections are -- when we're supposed to get to the next stage.

And I really believe, notwithstanding the elections -- it will make it harder now the election in India, but I believe if this were to occur we might find participation for countries such as Pakistan, Morocco, India -- and maybe even India, though I don't know now in terms of what's recently happened.

And once named, the incoming government should be invited to participate in drafting this resolution, in my humble opinion.

BIDEN: Iraq should see its members, not new ambassadors -- and I have great respect, don't anybody in the press translate this as a knock on Negroponte; it's not -- but I don't want to see Negroponte's face, I don't want to see General Kimmitt -- who's a great American -- I don't want to see their face ever again on Iraqi television. Let's see Iraqis faces speaking the language without an accent on television.

And I think we have to spare no effort to help the Iraqis feel an effective security force.

I notice you said, Secretary Wolfowitz, that the Iraqi forces are -- they're gaining some confidence. I hope we take advantage of reminding, even though it's water under the bridge since then, but I don't know why we don't have a massive effort to train Iraqis using the offers that were originally offered by the French and the Germans and others, give them a way to buy in. American-trained -- we're already doing it in Jordan -- American-trained -- Arab forces training the Iraqis because I think you're right, this is an essential, overwhelming need.

And I think we have to spare, as I said, no effort to help the Iraqis field this force. And we should be inviting European and American-trained Arab officers to participate in that training beyond what we've done.

And last thing and I'll end. The president, I think, also has to make a gesture as dramatic and consequential as the symbolic damage done when in fact the prison scandal broke.

And I believe, Mr. Chairman, that I think we should be -- and I know you've heard me say this before -- I believe the president should find and go to both these secretaries and say, "Find me the remaining 100 or 200 most qualified men and women we have in the government that have any background in quasi-military police work." Go vet every one of the 8,000 prisoners. Release every damn one that's not a security risk if there's a doubt.

BIDEN: Be seen to be releasing them. Sit down with the interim government. Ask them what plan for permission -- because we want to ask their permission -- to bulldoze down that damn prison. Bulldoze it to the ground. That will cause us big problems finding room for 2,000 people somewhere.

And ask them, what do they want for this symbol of tyranny? Do they want a new institution of their choice on that spot? The biggest school, a university, a hospital, what do they want? I think our gestures have to be as grand as the damage done.

And I think we should state clearly that we're willing to bring American forces home, once Iraqis and you have (ph) can handle their own security and there's a legitimate government.

So, folks, despite the fact I am very, very concerned about the state of affairs, I still think, quote, "this is winnable." But I do think it is not staying the course. It is changing the course, in order to be able to stay to be successful.

I apologize to my colleagues for not being here in time to make that at the beginning, and I'll hold my questions until the end, and I thank you, appreciate you listening.

LUGAR: Thank you, Senator Biden.

Senator Chafee?

CHAFEE: Thank you, Mr. Chairman.

Welcome, gentlemen.

Despite some of the progress we are making there and some of the positive signs, some of the generals on the ground have expressed great concern.

In particular, an Army general who is posted in western Iraq, when asked whether he believes the United States is losing there, he said, "I think strategically we are." And an Army colonel who is based in Baghdad said, "Unless we ensure that we have coherency in our policy, we will lose strategically." And he went on to say, "We don't understand the war we're in."

And then a senior general went on to say, "I do not believe we have a clearly defined war strategy, end state and exit strategy before we commenced our invasion. And that," he said, "it is doubtful we can go on much longer like this. The American people may not stand for it, and they should not."

So maybe somewhere in between what you're portraying and what they're portraying is the truth. But nonetheless, there's cause for alarm, which I certainly here from my constituents back in Rhode Island.

But what I'd like to ask is that, just yesterday, King Abdullah of Jordan was asked a question, "Do you see a link between the war in Iraq and the Palestinian-Israeli peace process?"

And he answered, "They, sort of, feed off each other."

The core issue in the hearts of everybody in the Middle East is the Israeli-Palestinian one. The core issue. They feed off one another, they are related.

And what I'd like to go back to is what the president said on February 28th of '03, in a speech before the American Enterprise Institute. Where he said, "Success in Iraq could also begin a new stage for Middle Eastern peace, and set in progress towards a truly democratic Palestinian state."

And he went on to say, "America will seize every opportunity in pursuit of peace. And the end of the present regime in Iraq would create such an opportunity." He said it: the end of the present regime in Iraq would create this opportunity.

CHAFEE: And then Secretary Wolfowitz, I'll also say I gave you a shot in May of '03 right after the end of the war when things were going very, very well. And I asked at a hearing, from the transcript, "It seems to me that we have thrown a rock into the pool that is the Middle East. And just for the sake of my question, if all goes well in restoring order in Iraq, what is our strategic vision of the ripples now going out from that rock we have thrown into the pool? What is the strategic vision in the Middle East now?"

And you answered, "A clean piece of canvas." You said, "I would say several things. I think some of them hopefully will happen even perhaps before some of the other results are achieved inside Iraq. I think one of the ripples is a positive impact on the Arab-Israeli peace process.

"And clearly we need it. We need to move that process forward. I think we have credibility, enormous credibility, not that we did not have it before. We have it more than we did before." Those are your words from May of '03 when things were going well.

And so my question is why the paralysis? If this is so important, by your own words, why the paralysis on this important issue, as King Abdullah said, "a core issue"?

ARMITAGE: Perhaps I should...

WOLFOWITZ: Let me ask...

CHAFEE: I'll ask Secretary Wolfowitz since I quoted him, if I could.

WOLFOWITZ: OK, but I'm going to turn to my colleague from the State Department on this issue of what you call paralysis.

But I would say this. I think that in fact part of our problem, as those quotes made clear, I think success in Iraq will have these effects. We are not at success, to put it mildly, and we need to get there. I agree very strongly with what both the chairman and Senator Biden said on that point.

I think if we go back to last year when there was a bit of euphoria, I believe, and a sense that we really were getting success, I know I heard from Arab democrats that there was some sense of exhilaration in the Arab world about the prospects of change.

And I don't claim to be expert enough to say it's cause and effect. But I think the meeting in Sharm Al Sheikh, we saw some signs of the Egyptians and the Saudis stepping up to responsibilities to support the peace process.

And again, I can't say it's cause and effect but I don't think it's helped the peace process that the enemy in Iraq has proved as resilient as it has.

And let's be clear. That enemy includes Saddam Hussein, who was out there funding attacks on coalition forces right up until he was captured in December.

WOLFOWITZ: It includes number six on the black list, Izzat Ibrahim al-Duri, who is still at large and still funding attacks on American and coalition forces with money that he salted away in banks in neighboring countries.

It includes the former killers, as I mentioned in my opening statement, from the so-called M-14 branch of the Iraqi Intelligence, the so-called Anti-Terrorism branch. George Orwell would have used that phrase: anti-terrorism meant that they specialized in killings, hijackings, assassinations and bombings.

Those people are still out there. They're still -- they're killing people, killing Iraqis, killing Americans. Their goal is to prevent exactly that process that, I agree with Senator Biden, we need to move forward...

CHAFEE: If I could just go back, if I could, in talking about the paralysis -- and there've been so many opportunities after Aqaba. In June there was the long, seven-week cease-fire. Abu Mazen came here to the Foreign Relations Committee and begged -- and he met with the president -- begged us to help him on the settlements, the wall, the prisoners held without charges.

"Please empower me with my people." And he went back empty- handed. These are the missed opportunities.

When the Geneva Accords came in October of last year there was a cold shoulder given to those.

I believe this is what's hurting us in Iraq; not taking the opportunities, even as the president said, taking the opportunities that are presented to us and energizing our adversaries in Iraq.

ARMITAGE: Senator, may I? One, there are others who would say that what happened to Abu Mazen was that we held him too close and thus burned him. And he became...

CHAFEE: He wouldn't say that. He wouldn't say that.

ARMITAGE: Several of those who served with him when he was prime minister would say that, and gave us advice to be somewhat cautious.

You're right, we had a seven week hudna, or cease-fire. The difficulty with a cease-fire is the Palestinian Authority can have a cease-fire, but if they won't control Hamas then it's for naught. And they're not controlling Hamas. They're not even trying to.

We thought we were on the verge of something in this very frustrating, almost "Perils of Pauline," Middle East saga of a search for peace, with the Sharon plan for disengaging from Gaza. Where 80 percent of the people of Israel, by opinion polls, appear to be for it, but Likud was not for it and hence he was unsuccessful.

We thought it was rather noteworthy, for the first time since 1967, to have 21 Gaza settlements and four West Bank settlements turned over to the Palestinians. We were quite bullish on this. And now we're disappointed.

But Mr. Sharon is making some other refinements or modifications to his plan. He will be eventually showing us that. We have not seen it, to my knowledge, yet.

Secretary Powell met at the Dead Sea with Abu Ala. Dr. Rice met with Abu Ala in Berlin. And so there's -- it's, kind of, like a duck on the water: Doesn't appear to be moving very much, but underneath there's a lot of churning going on. And we're doing a lot of it. Some of the Palestinians are doing it. Certainly our Israeli allies are.

CHAFEE: I'd just like to go further and say there's a lot of churning going on, but in the meantime the days are slipping by, the months are slipping by, the tide is turning and, if you believe what King Abdullah says, and he's geographically located, as he says, in between Iraq and a hard place, and he says this is the core issue.

And my constituents just see paralysis on this issue. And maybe you could level with us. Is it an election issue, that certain base that you got to be careful of?

CHAFEE: What's the truth?

ARMITAGE: The affection of the president for Israel and for that democracy has nothing to do with elections. It has to do with his view of Israel as one of the great democracies in the world, perhaps the most pure democracy.

However, it was our president who was the only one whose spoken up about a vision of two states living side by side. He's held that vision for two years now. He's not shying away from it. And, hence, he has encouraged Secretary Powell to meet with Abu Ala and Dr. Rice to meet with him as well.

It's frustrating for us, as well as for you and your constituents, but it's most frustrating for the Palestinians who are having their houses bulldozed and for those 11 or 12 IDF soldiers who were killed last week.

CHAFEE: Well, I'll conclude just by saying every visitor that I get said only the Americans can push this forward. I hear it every time -- only the Americans. And sadly, we are not exercising that power

Thank you, Mr. Chairman.

LUGAR: Thank you very much, Senator Chafee.

Senator Boxer?

BOXER: Thank you, Mr. Chairman.

Gentlemen, I know how hard you are working and I know that the burdens that you bear are very heavy.

But I have to say I was very disappointed in your opening statements, to be honest with you. Listening to you, one would never know what is happening in America, how people are so distraught over this. And I think if you look at the faces of my colleagues, I've never seen us quite look this way. It's not partisanship.

And I didn't get, as Senator Biden pointed out, where are you changing course? I don't hear it.

And if there's one thing I want to say is to agree with my ranking member here that this is the moment to do it if ever there was a moment.