SECRETARY CLINTON: Good afternoon. It is my pleasure to welcome Foreign Minister Lieberman to the State Department today for his first official visit to Washington in his new role. Minister Lieberman’s visit gave me the opportunity to reaffirm the United States deep, unshakable friendship and bond with Israel. Our commitment to Israel’s security is and will remain a cornerstone of our foreign policy, and I was pleased to have this chance to express that personally to the foreign minister. The United States has no greater ally in the Middle East and no greater friend than Israel.

Because our countries are close friends, we spoke honestly and openly about a range of issues. And we are looking forward to continuing that dialogue in the U.S.-Israel strategic dialogue, which has provided a useful forum for discussion of shared concerns and challenges over recent years. We exchanged views on the Middle East, including Iran, and reiterated the need for Iran’s leaders to comply with obligations to the United Nations Security Council and the International Atomic Energy Agency to suspend enrichment-related and reprocessing activities. And we look forward to Iran’s response to our offers of engagement.

And of course, we also focused on efforts to bring about a comprehensive peace between Israel and her neighbors in the region. Israel’s right to exist in peace and security is undeniable and non-negotiable. Both Israelis and Palestinians deserve to live in peace and security in two states that will entail both parties fulfilling their obligations under the Roadmap.

Building on the Arab Peace Initiative, Arab states must do their part to support the Palestinian people as they develop the institutions that will sustain their state. And they must recognize Israel’s legitimacy and, in doing so, choose progress over a self-defeating focus on the past.

The United States will never do anything to undermine Israel’s security, and the United States also supports a viable Palestinian state. We do not believe that these two objectives are incompatible. In fact, we believe they are both critical elements of a comprehensive and secure peace.

Minister Lieberman, I hope that you enjoy your first visit to the United States as your country’s foreign minister, and I look forward to continuing our conversation and working with you more on these issues in the future.

FOREIGN MINISTER LIEBERMAN: Madame Secretary, at the outset, I would like to say to you how much the people and the Government of Israel appreciate your consistent support of Israel. We value your friendship greatly. We remember the many contributions you have made personally, even before you became a United States senator from New York. We thank you, Your Excellency, for your longstanding commitment to Israel and to strengthening the American-Israeli special relationship and friendship.

I think that we have had a good discussion today covering a broad spectrum of regional and global issues. We also covered a wide range of important bilateral topics. Madame Secretary, I thank you for your very kind hospitality today, and I look forward to our future friendly dialogue, both in Washington and in Jerusalem. Thank you.

SECRETARY CLINTON: Thank you.

MR. KELLY: Our first question goes to Lachlan Carmichael.

QUESTION: Yes, Minister --

SECRETARY CLINTON: Here comes the microphone, Lachlan.

QUESTION: Minister Lieberman, first, Ambassador Oren, the new ambassador to Washington, is talking about some interesting proposals on settlements. Could you elaborate on what they might be? And then for Secretary Clinton, does that mean there is some wiggle room to your statement that there should be no such settlement activity?

And finally, for both of you, did you discuss previous President George Bush’s letters, private letters to the Israeli Government? Is that issue over with?

FOREIGN MINISTER LIEBERMAN: Thank you. It’s a long question. (Laughter.)

SECRETARY CLINTON: It’s actually three questions.

FOREIGN MINISTER LIEBERMAN: Three questions, yeah. First of all, we really don’t have any intention to change the demographic balance in Judea and Samaria. But we think that, you know, as – in every place around the world, baby are born (inaudible), people get married, some pass away. And we cannot accept – we cannot accept this vision about absolutely completely freezing call for our settlements. I think that we must keep the natural growth. Prime minister spoke about this in his speech. I think that this position, it’s – this view, this approach, it’s very clear.

And also, we had some understandings with the previous administration and we tried to keep this direction. And we are, of course, ready for immediately direct talks with the Palestinians.

SECRETARY CLINTON: Well, as President Obama, Senator Mitchell and I have said, we want to see a stop to the settlements. We think that is an important and essential part of pursuing the efforts leading to a comprehensive peace agreement and the creation of a Palestinian state next to a Israeli-Jewish state that is secure in its borders and future. We believe that this process which Senator Mitchell is quarterbacking for us has just begun. There are a number of critical concerns, many of which overlap in their impact and significance, that will be explored in the coming weeks as Senator Mitchell engages more deeply into the specifics as to where the Israelis and the Palestinians are willing to go together.

I think that the whole issue that you’ve raised is one that we’ve expressed our opinion on. And in looking at the history of the Bush Administration, there were no informal or oral enforceable agreements. That has been verified by the official record of the Administration and by the personnel in the positions of responsibility. Our former ambassador Dan Kurtzer has written an op-ed that appeared in the last few days that lays out our position on that.

MR. KELLY: Our next question, Israeli television, Channel 2.

QUESTION: Thank you. Madame Secretary, I’m interested to know, how do you envision any progress, any chance for achievement of progress on the Israeli-Palestinian track when the Israeli prime minister and the foreign minister have put so many conditions on the existing of a Palestinian state, conditions that are all – all-out refused by their Arab neighbors, including the Palestinians? And when you hear that the Israeli – current Israeli Government refuses totally to talk about your demand of freezing the settlement activity, how do you envision a progress on that track?

SECRETARY CLINTON: Well, I think if one looks at Israeli history, there have been prime ministers going back to the beginning of Israelis’ statehood that have staked out positions which have changed over time. I personally have known such prime ministers from Labor, Likud and Kadima, who started in one place, but in the process of evaluating what was in the best interests of Israel, and that has to be the primary obligation of any leader of Israel: What is in the best interests of my people and the future of my state?

And these prime ministers have moved to positions that they never would have thought they could have advocated before they started looking hard and thinking hard about what the future should be. But that’s what negotiations are for.

QUESTION: Do you hold out that Netanyahu and Lieberman will follow through (inaudible)?

SECRETARY CLINTON: Well, I leave that to them to decide. I’m just reflecting on history and on people who have been in these positions over the last 30, 40 years. And there has been an evolution in thought. And I thought Prime Minister Netanyahu, in recognizing the aspirations of the Palestinians for a state of their own in his speech on Sunday night, said something that many people were waiting to hear him say.

MR. KELLY: Next question, Charlie Wolfson from CBS News.

QUESTION: Madame Secretary, on Iran, and also for the foreign minister. The Iranians have protested U.S. actions through the Swiss ambassador today. Could you bring us up to date on those protests? And there have also been criticisms or reports of criticisms about U.S. interference in Iranian affairs because of the call to Twitter, if you could comment on that.

And for the foreign minister, does the outcome of the Iranian election change Israel’s position in any way, and were your discussions today – did they touch on that, and any actions you asked the Administration to do?

SECRETARY CLINTON: That’s four questions for the foreign minister. (Laughter.) We have very creative reporters on both sides here. (Laughter.)

The United States believes passionately and strongly in the basic principle of free expression. We believe that it is a fundamental human right for people to be able to communicate, to express their opinions, to take positions. And this is a view that goes back to the founding of our country, and we stand firmly behind it.

And therefore, we promote the right of free expression. And it is the case that one of the means of expression, the use of Twitter, is a very important one not only to the Iranian people, but now increasingly to people around the world, and most particularly young people. I wouldn’t know a Twitter from a tweeter – (laughter) – but apparently, it is very important. And I think keeping that line of communications open and enabling people to share information, particularly at a time when there was not many other sources of information, is an important expression of the right to speak out and to be able to organize that we value.

FOREIGN MINISTER LIEBERMAN: Thank you. As somebody said before you, we support evolution, not a revolution, and we never interfered in any internal affairs of the different countries. And what it’s important for us, not the personal creation, but the creation of policy. And what we saw during this elections, it was only one point that every candidates were united: its achieving, quote, nuclear capability; and maybe the other point, the hatred to Israel. What it’s important for us, it’s real – not the domestic problems of Iran, but their policy. And we hope that they will change their policy.

MR. KELLY: Last question for Channel One, Israel Television.

QUESTION: Thank you. Madame Secretary, given the latest unrest in Iran and the very brutal way the regime there is moving to quash these protests, does the Administration still believe there is room to engage diplomatically with Iran? And are you concerned that such engagement might embolden actually Ahmadinejad and his regime?

SECRETARY CLINTON: Well, first let me say that the people of Iran deserve the right to have their voices heard and their votes counted. The outcome of any election should reflect the will of the people. And it is for the Iranians to determine how they resolve this internal protest concerning the outcome of the recent election. But it is a fundamental value that the United States holds with respect to free and fair and credible elections.

With regard to engagement, obviously we intend to pursue engagement because we think it’s in the interests of the United States and the world community to discuss with the Iranian Government important matters such as the one Minister Lieberman raised concerning their intentions for their nuclear program, their support of terrorism, their interference with the affairs of their neighbors and other states.

So yes, we think there is much to talk about. And I would think it’s a useful exercise to look back on history and to see where countries, most particularly my own, have engaged in ongoing diplomatic discussions with countries whose regimes we’ve disapproved of, that we rejected. We never stopped negotiating with the former Soviet Union. They invaded countries. They promoted unrest. But we knew we had an opportunity to learn more, to discuss fully, and perhaps to reach better understandings than we might have in the absence of such engagement, so we pursued it.

We are doing this out of what we view as our interest and the interests of friends and allies such as Israel. So now we are obviously waiting to see the outcome of the internal Iranian processes, but our intent is to pursue whatever opportunities might exist in the future with Iran to discuss these matters.

Thank you all.