PRESIDENT BUSH: A couple of opening statements, and then a couple of questions per side.

Welcome back. Thank you for coming. I've been really looking forward to this visit. Chancellor Merkel has got a very good grasp of the international issues. She's a clear thinker. She speaks very plainly. And I'm honored that you came to visit.

I'm looking forward to taking the Chancellor upstairs to my private residence after this press availability to continue our discussions and to have a dinner that is a continuation of a personal relationship that is developing, where we're able to speak in such a way that we're -- you can understand what we're trying to say and understand our mutual desire to work together to make this world a peaceful place. German-U.S. relations are very important. I'm just honored you came back.

I do want to mention that we did talk about a couple of very important subjects. Obviously, we spent a lot of time on Iran. After all, we're close allies in trying to make sure that the Iranians do not develop a nuclear weapon. We talked about the WTO round, the Doha round for the WTO, and I appreciated the Chancellor's willingness to work with not only the Europeans, but with a country like Brazil, and others, to see if we can't bring this round to a favorable conclusion.

This evening I'm going to talk to the Chancellor about Sudan, and the progress that's being made in Iraq. We've got a lot to talk about, because we're friends and allies. And so I welcome you, glad you're here.

CHANCELLOR MERKEL: (As translated.) Well, let me say that I am very pleased to be here, and I am also very gratified -- (inaudible) -- to talk to you about. We have been able to strike up what is a very, very good rapport, very good relationship, and is a friendship. And we bolster that friendship mostly by telephone calls; we've been in constant contact.

We've addressed a number of issues here today of regional concern, chief among them is Iran, where we are in total agreement, saying that under no circumstances must Iran be allowed to come into possession of a nuclear weapon.

We are in agreement, also, that a diplomatic solution needs to be found, and we do see good chances for bringing this about. But we also think that it is essential, in this context, that the clear resolve of the international community is shown by standing united, by showing cohesion on this matter, and -- (inaudible) -- be crucial in this context is that we try to draw as many partners as possible into the fold, and to clearly show to the Iranians that this is unacceptable.

We also addressed the issue of the WTO, the negotiating round, and we said that we want the success of WTO. I explained to the President of the United States that we will use the upcoming EU-Latin American summit in order to get together again with our partners there, in bilateral talks, to press also the Latin American countries that it is, indeed, necessary for all of us to come to a successful outcome here, and that all of these countries need to lend their contributions -- (inaudible).

And I trust that this evening we're going to continue discussing other important foreign policy issues, but also, I think, we have a number of bilateral issues that we would like to discuss over dinner. Also because tomorrow one of my stops during this trip will be a stop to New York, where I will meet with representatives of the American business community, so German-American business will also be on the agenda there.

And in conclusion, let me thank you yet again for the very warm and gracious reception here, to the White House.

PRESIDENT BUSH: Deb.

Q Mr. President, are you satisfied with the Moussaoui verdict? He didn't get the death penalty that the government was seeking. Were you worried that a death sentence might have turned him into a martyr?

PRESIDENT BUSH: Mr. Moussaoui got a fair trial; the jury convicted him to life in prison, where he'll spend the rest of his life. In so doing, they spared his life, which is something that he evidently wasn't willing to do for innocent American citizens.

As I think about the trial, I can't help but think about the families who lost a loved on September the 11th. I think about the rescuers who tried to save lives in the burning buildings. And I know that it's really important for the United States to stay on the offense against these killers and bring them to justice. And those are my thoughts about the Moussaoui trial.

Q Mr. President, what kind of sanctions should be taken against Iran, and when?

PRESIDENT BUSH: That's the kind of question that allies discuss in private.

Q You discussed it just this afternoon.

PRESIDENT BUSH: Hold on a second. It's very important that the international community send a clear message to the Iranians that a nuclear weapon is unacceptable. We are pleased that the EU3 has taken such a strong role in this measure. It is part of having a unified message. The United States is actively involved with our partners in achieving this important objective.

The first important thing that must be done in achieving an issue diplomatically is for everybody to share a goal. And the goal is clear, and that is the Iranians should not have a nuclear weapon or the capacity to make a nuclear weapon. And that, in itself, is an important diplomatic achievement.

The Chancellor and I, of course, obviously agree on that, but so do other partners in this effort, such as the Russians. They agree that the Iranians should not have a nuclear -- it's a good starting point. And now we're talking about the tactics, as to how to achieve that objective. One such tactic is to go to the United Nations Security Council, and today we laid down a resolution. And we will continue to consult with our partners as to how to achieve a diplomatic solution to this issue. And the timing of resolutions and what they should say is all -- what allies do. And we will come to a common agreement as to how to proceed, because this is a common effort.

And the Iranians must understand that we won't fold, that our partnership is strong; that for the sake of world peace they should abandon their nuclear weapons ambitions. And we're resolute on that matter. So that's what Angela and I talk about. We talk about how to make sure this coalition continues to send a common message. I appreciate her steadfast and her strength on this issue.

Let's see, we've got Toby, yes.

CHANCELLOR MERKEL: Let me just add one remark. I think the situation just the one that we have now, it is crucial, if one wants to see this conclude to a diplomatic success, to actually do this on a step-by-step basis. Quite often, attempts have been made to rush matters, and to actually pre-empt what should be at the end of the process and to take the next -- the other next step before the next one. And I really do think that on this one in order to pursue this diplomatic process successfully we need to pursue this on a step-by-step basis.

It's happening now. We now have an agenda. What is on the agenda now is looking at this matter, and then the Chapter 7 Security Council resolution, and what we need to do further is accept what we want to pursue further in this process with all our partners and try to keep them all together.

PRESIDENT BUSH: Right. Toby.

Q Madam Chancellor, do you want the United States to talk directly with Iran on this issue? And did you tell that to President Bush today?

CHANCELLOR MERKEL: What I want is to achieve things together, to be successful in this together in what we are trying to do here -- and that is to see to it that Iran is not in possession of a nuclear weapon, persuading them that they will not be allowed to get possession of a nuclear weapon and that they need to abide by international rules.

And I think in this overall process we have shown that there is very good interaction between us. What we have been doing, we've been doing together and shall continue to do so. And I think it is right in this overall process to say it's important what the European Union has done in this process, they've played a very crucial role. And I must say that I'm fully behind the attempts that have been made by the EU3, together with the United States, because right from the start we have been in on this together, and we shall continue to do so.

Q Mr. President --

PRESIDENT BUSH: Nice to see you again.

Q Thank you very much. Nice to see you, too.

PRESIDENT BUSH: A face a fellow can't forget. (Laughter.)

Q We can talk about this. (Laughter.) We've learned that you have been talking a lot with Madam Merkel, and you've been on the phone for -- six times, you've seen each other a lot. So how has this relation, German-American relation developed since she took office? Are we back into partners in leadership? And when are you planning to come to Germany, maybe to the soccer World Cup?

PRESIDENT BUSH: I'm going to come to Germany before the G8 -- am I supposed to say that? (Laughter.) Breaking news. The last time I had a press conference with the Chancellor I did talk about her predecessor and, you know, I had a lot of meetings with her predecessor and I remember them fondly. I thought our relations -- look, the Iraq war made relations difficult. The government didn't agree. And I understand that.

The Chancellor is -- I wouldn't call it a new chapter in German-U.S. relations, because I did feel we had, you know, we were still writing chapters. But I find the Chancellor to be a -- one, a fascinating person who brings a unique perspective. A lot of us who grew up in the West take our liberties for granted, that freedom is something that's just prevalent everywhere, and where it's not prevalent, don't worry about it.

Well, I'm talking to a very sophisticated leader who knows what it's like to live in a world that isn't free. And there's just something, to me, that is intriguing and important to have a partner in peace who brings that kind of perspective, who knows the discomfort of what it means to live under the iron hand of a communist ruler.

So our relationship -- the way I view the relationship is it's growing and it's strengthening. Any time you have a relationship like this, there has to be a certain degree of trust; and you trust the person when they say something. And I appreciate Chancellor Merkel's straightforward judgment. And I hope that I've created the condition where she tells me what's on her mind and she expresses her beliefs -- and I certainly will express mine -- and we're able to find common ground.

And we do disagree, of course. But the disagreements are always in such a way as to make sure that there's a positive relationship, because we both understand relations between Germany and the United States are important for our respective people, important for relationships in Europe, for the United States. It enhances the transatlantic relationship. And by working together we can help solve major problems. And this is a troubled world. We're dealing with Iran. We're dealing with Sudan. And it's very important for diplomacy to work, and it works better when you have a partner in peace, a partner -- an ally with -- a Germany that understands it can really make a difference in the international community.

And so I value this relationship and I thank her for her friendship. And I'm looking forward to going to Germany again.

Thank you all.

CHANCELLOR MERKEL: I invited the President to come over before the G8 summit and to visit me in my constituency, partly because I wanted to show him around and show him a little bit of what has been achieved in what we call the new Linder; to get to know, also, people who, like me, lived on the other side of that wall. And let me say that I'm very much looking forward to his coming over.

Q When?

CHANCELLOR MERKEL: The G8 summit is from the 15th through the 17th, so in all probability it will be -- .

PRESIDENT BUSH: Yes, somewhere around there. I want to keep it somewhat of a mystery. (Laughter.) Thank you all.