SECRETARY POWELL: Well, good afternoon, ladies and gentlemen. It's been my great pleasure to receive Prime Minister Verhofstadt, who is heading the European Union Presidency until the end of the year, and also High Representative Solana, with whom I have worked closely on a number of issues.

We spent our time this afternoon talking about the situation in the Middle East. I am very pleased that the positions of the European Union and the United States are so closely aligned. We both remained committed to the Mitchell process as a way of getting to negotiations between the two sides on the basis of UN Resolutions 242 and 338. We took note of the speech that Chairman Arafat gave earlier this week, and we are united in our encouragement to Chairman Arafat to implement the actions that were called for in his speech in order to get the violence down to a point where we can begin serious discussions toward a cease-fire.

We are also united in our desire to do everything we can and to encourage others to do all they can to ease the plight of the Palestinian people, who are existing in very, very difficult circumstances.

And so it is a pleasure to have the Prime Minister and the High Representative here again, and I am pleased that we have such a commonality of views on the Middle East. And I look forward to working with the European Union even more closely on this issue in the days and months ahead.

We have not given up hope. There are some optimistic elements in the equation; there are some conversations taking place between security officials on the two sides. General Zinni will be here in the State Department tomorrow for consultations, and he remains on the case, on the job, and we will look forward for an opportunity to send General Zinni back to the region to continue to pursue the quest for a cease-fire, negotiations and peace.

Mr. Prime Minister.

PRIME MINISTER VERHOFSTADT: Thank you very much, Mr. Secretary. First of all, I want to underline, after this fruitful discussion of today, that there is a common position of the United States and the European Union about the situation in the Middle East. I think very important was the speech, the intervention of Mr. Arafat. And secondly, also, a few signs that that is going in a better direction, a few steps that are going in a good direction. And I think what I have underlined here is the absolute necessity that we continue to pressure both parties, but certainly Chairman Arafat, to go in implementing everything he has said in his speech. And I think that with the good cooperation between the United States and the European Union, it's possible, certainly, to have new, better results in a short period of time.

So Mr. Solana is staying here in Washington to continue his work with our American friends, and to further analyze the situation, and to further ask from Chairman Arafat new steps, new efforts that can be the basis, then, for a re-launch of negotiations for a cease-fire in the near future.

QUESTION: Mr. Secretary, Teri Schultz with Fox News. Neither of you mentioned the war on terrorism at all, and that's where we usually go after these opening statements. Can you tell us what you discussed on this? And I'm sure that you would have had to get into what's next, with all the speculation swirling around. And also, along with that speculation, that the EU doesn't necessarily support what the US wants to do next, whatever that may be.

SECRETARY POWELL: We did touch on the war on terrorism and the situation in Afghanistan at the end of our briefing. In our discussions, our real focus today, though, was on the Middle East. But we did note the fact that the military campaign is going well, and we are pleased that discussions seemed to be nearing a conclusion with respect to the international security assistance force that is being prepared to go in. And we are hopeful that a UN resolution will be finished in the next day or so to authorize that force, all coming together so that the interim authority can take over this weekend.

We did not get into any details about what's next, because this really is a continuum of activity. We are all working closely together to go after the financial infrastructure of terrorist organizations around the world, to chase al-Qaida wherever it exists throughout the world, to make sure that we are sharing intelligence and law enforcement information with each other. The European Union has been steadfast in its support of our efforts, and the European Union has been in the forefront in this campaign against terrorism, and I did express my appreciation for that continued support from the Union.

But we didn't talk about targets or where we are going next. We are all united in this campaign against terrorism, and there will be opportunities for cooperation and directing our efforts against targets as they come along in the future.

QUESTION: General Musharraf is visiting China right now. Are you concerned if Pakistan joins the Shanghai Cooperation Organization?

SECRETARY POWELL: I know he is visiting Shanghai. I had a nice conversation with President Musharraf today, and I have no idea as to whether or not this is a serious consideration for him or not.

QUESTION: Mr. Powell, did you tackle the question of knowing if it would be possible to create a special team, a special force to implement the cease-fire in the Middle East? Did you tackle this question?

SECRETARY POWELL: We talked about the issue of monitors -- not a force, but monitors -- and as the United States has indicated previously, if both sides agree that the presence of monitors at some point would be useful, the United States will be willing to play a part in providing such monitors.

QUESTION: Thank you very much, Mr. Secretary. On Pakistan, could you talk about the cooperation between the US and Pakistan in terms of border control? And do you think that such cooperation will continue as you try to question and prosecute al-Qaida leaders?

And for the Prime Minister, if you could talk about the issue of extraditions and the death penalty; obviously it keeps coming up, and do you think that cooperation with the US can be reached on this?

SECRETARY POWELL: On the first question, the cooperation with Pakistan has been absolutely superb. I was able to, again, thank President Musharraf this morning for that cooperation, in making sure that we work together so that al-Qaida leaders do not find refuge or find a way to escape through Pakistan. And the Pakistani military has been very cooperative and forthcoming in their work with General Franks and his team, and so we could not have asked for better support from the Pakistani Government than we are receiving.

PRIME MINISTER VERHOFSTADT: We are working on the topic that you have mentioned. We are examining the whole question. I can tell you that our whole action plan against terrorism, which is an action plan of more than 17 different actions, is now -- we are now implementing it. And I think that we have done big achievements. We have created European arrest warrants inside the European Union. Inside the European Union, on our last summit, we have also made a common definition on terrorism. We have put together the first lists for terrorist organizations, groups and persons. And on the freezing of assets, we have also put together all the (inaudible) that is necessary.

So I think that at this moment, we have really implemented, I think, 80 to 90 percent of the whole action plan that was put together. And I think that in the fight against terrorism, the European Union has done everything, what is necessary. As you know, a huge number of European countries are also candidates to participate in the security force in Afghanistan. We hope that we could reach a resolution of the Security Council now, Friday, the fastest possible. And I think that things are going in a good direction.

So what we need now is also peace in the Middle East, if possible, and there we are working together. And the best way to reach that, I think, is a very common, firm cooperation between the United States, the European Union, moderate Arabic countries, the Russian Federation, and the United Nations. And that is the reason why I am here, to work on it, to have this common approach, a common policy.

SECRETARY POWELL: Thank you.

3:00 p.m. EST