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President Bush: Thank you all. Please be seated. I'm pleased to welcome my friend, Vladimir Putin, back to the White House. We just had a constructive meeting and a candid conversation. I told the President how much I enjoyed visiting Russia earlier this year, and how much I'm looking forward to going back to Russia for the G8.

I also thanked President Putin – Vladimir – for Russia's offers of assistance in the wake of Hurricane Katrina. It meant a lot to know that you cared enough to send critical supplies, and our country really appreciates it. People are going through some tough times down there, and I think it lifts their spirits to know that not only Americans, but Russians care about their future.

We've got a strong ally in Russia in fighting the war on terror. You know, it was about four years ago that our country got attacked; one year ago, there was Beslan, both of them brutal attacks, both of them attacks by people who have no regard for innocent life. And we understand we have a duty to protect our citizens, and to work together and to do everything we can to stop the killing. That's why we hold office.

And I appreciate you very much, and your understanding of this war on terror. We also understand that we've got to work to stop the spread of weapons of mass destruction. We understand the stakes that people who kill in cold blood, if they have weapons of mass destruction, will kill in cold blood on a massive scale. And I want to appreciate you for your understanding, and thank you for your understanding of that.

We both signed the International Convention on the Suppression of Acts of Nuclear Terrorism, which was a positive statement by the world. We discussed our efforts to work together in Iran and North Korea. We both – we have the same goal: We don't want the Iranians to have nuclear weapons and we don't want the North Koreans to have nuclear weapons. We talked about ways to achieve those goals.

We talked about the need to improve nuclear security. This year we reached a milestone in nonproliferation cooperation by completing the conversion of 10,000 Russian nuclear warheads into peaceful fuel for U.S. power reactors. And I appreciate very much that sense of cooperation. That's good for the world to see.

We talked about our economic relationship. Russia has got a growing economy. We have products that they want, and they've got products that we want – like energy. And it's necessary for us to have a good economic relationship, one where we resolve our differences in a wise way. I told Vladimir that I'm very interested in seeing if we can't get – complete the negotiations for Russia's entry into the WTO, the World Trade Organization, by the end of this year.

As we strengthen our economic ties we'll work to advance freedom and democracy in our respective countries and around the world. Russia has been a strong partner of the United States, and will be an even stronger partner as the reforms that President Vladimir Putin has talked about are implemented – rule of law, and the ability for people to express themselves in an open way in Russia.

I don't know how many visits we've had. I haven't been counting them because I've run out of fingers on my hands, but there's been a lot. And every time I visit and talk with President Putin I – our relationship becomes stronger. And I want to thank you for that. Thank you for coming to the White House to visit. Welcome.

President Vladimir Putin: Dear ladies and gentlemen, first and foremost, I would like to thank the President for the invitation to the White House. At the outset, allow me to express my sincerest compassion and support to the American people for the loss of many human lives, and serious destruction caused by Hurricane Katrina. Please believe that we sincerely and genuinely empathize with you. Already in the very first hours after the tragedy, Russia offered its assistance. Of course, this help cannot compare with the scale of aid the President of the United States outlined yesterday to restore the affected regions. However, the support was sincere as was the desire to be close to you, to help, and to offer both moral support and those items that people need most, such as medication and basic supplies.

I must say that these events were a serious lesson for the whole world, not only for the U.S.. It is not accidental that both in New York and today in Washington, we paid a lot of attention to this theme. It is a global catastrophe, and one that must make us think. Today I told George that also in Russia, we will draw conclusions on how to efficiently respond to and how to avert such catastrophes which, without a doubt, are global in nature.

Precisely for this reason we talked about these tragic events and our cooperation in averting manmade catastrophes, infectious diseases and so forth. I am sure that if we pool our efforts, then our actions will be much more effective. In general, the new, and even closer Russian-American relations, will enable both countries to effectively solve break-through strategic issues in many fields in which we cooperate. Today's meeting is a confirmation of this.

The traditional, high-priority subject of our discussions is anti-terrorist cooperation between the U.S. and Russia. We have agreed to enhance bilateral coordination, including within the working group to combat terrorism. Here, we believe that constant attention should be given to joint efforts to prevent terrorist activities, and of course, to the possibility that terrorists obtain weapons of mass destruction. You know that a decision on this subject was adopted in the UN, in New York.

Significant attention was paid to the question of nonproliferation, and we discussed the North Korean problem and the Iranian nuclear dossier. I must say that our positions are very close to those of our American partners. We will continue to coordinate our efforts in this field. I would like to point out that our side feels that the political and diplomatic means to resolve these problems are far from being exhausted, and that we will take all the necessary steps to resolve these issues without exacerbating them or pushing them to extremes.

We briefly discussed other crisis situations in the world, but I must say, that our ministries of foreign affairs are in constant contact on all of these issues. We also discussed the upcoming G8 meeting. I am thankful to George for some of his recommendations. We will continue to be in close contact with our partners in preparing this event and its agenda, so that the G8 meeting in the Russian Federation will not only be an organisational success, but will carry on from previous such meetings and introduce a new spirit into examining the problems that are relevant both for our countries and the whole world.

Today we also discussed the situation in post-Soviet space. Our countries have a shared interest in maintaining stability and economic prosperity in this vast territory. Russia's position on this issue is widely known. We favour the consistent advancement of integration within the framework of the CIS, while rigorously respecting the sovereign rights of all our neighbours, and their right to choose their method of national development without outside pressure. Here, we hope to coordinate our activities with those of all our partners.

During the negotiations, we assessed how different tasks related to the development of Russian-American relations are being fulfilled. I would especially like to point out the development of our economic ties. The President just mentioned that we have mutual interests including in the energy sector, meaning the increasing scope of Russia's economy. We discussed all this in detail. Basically, this is a recurring subject of our meetings. We see huge possibilities for further increasing economic cooperation in the energy sector, in the high-tech field, and in space exploration. As you know, over the past few years, much has been done together, both in the U.S. and in the Russian Federation.

We discussed the possibility of Russia entering the WTO in detail. I am thankful to the President of the United States for understanding our interests during the negotiation process. I hope that also at the level of experts our specialists will be able to find some practical solutions. Despite the fact that they have to coordinate a great many different questions, a positive dynamic exists, and I would like to express the hope that the process results in specific outcomes.

In conclusion, I would again like to emphasise that together with the President of the United States, we are convinced that the firm bases of Russian-American partnership must be the many ties between our societies and citizens, between business communities and civil societies. After this meeting in the White House, I will have the chance to speak with the leaders of some major American companies. I hope that these meetings will be useful, since we will discuss concrete projects by which major American companies will participate in Russia's economy, first and foremost in the energy sector. Once again, I would like to thank the President for finding the time to honour our engagements despite the very difficult situation that exists in the regions affected by Hurricane Katrina. Of course, it was clear that his thoughts are constantly with those people and their problems. However, we still managed to complete the day's entire agenda. We discussed all the questions we had wanted to, agreed on the next steps for cooperation between the U.S. and the Russian Federation. I hope that this will be a good impulse for our cooperation in all the fields that I just mentioned.

Thank you very much for your attention.

Question: With billions of dollars flowing out of Washington for hurricane relief, some Republicans are worried that you're writing a blank check that will have to be paid by future generations. Who is going to have to pay for this recovery, and what's it going to do to the national debt?

President Bush: First of all, for our citizens who haven't seen what I've seen – you've seen what I've seen – it's – we lost a lot of life and a lot of property. I mean, the area destroyed by the storm is the size of Great Britain. And we've got whole towns just completely flattened, just wiped out. And one of our great cities, New Orleans, is – a lot of it is underwater. And by ”underwater,“ I mean water over the rooftops. And those homes will be destroyed. Thousands of people won't have homes. And so this is an enormous task to help the region start growing again.

One of the commitments that I made last night is for the federal government to fund a significant portion of the infrastructure repair and rebuilding; in other words, our bridges and our roads. Our schools, the water systems are ruined, the sewer system is ruined. And I meant that when I said we will do that. Part of the recovery is to make sure there's an infrastructure that works.

Yesterday in New Orleans, for example, the Mayor was so thrilled that a portion of New Orleans, the French Quarter, for example, has got lights and sewers – you can't drink the water, but the sewer system works. In other words, he's beginning to see some life. And it just reminded me that as we can get the infrastructure up and running as quickly as possible, get the debris cleared, get the infrastructure up and running, then life will begin.

And so, you bet, it's going to cost money. But I'm confident we can handle it and I'm confident we can handle our other priorities. It's going to mean that we're going to have to make sure we cut unnecessary spending. It's going to mean we don't do – we've got to maintain economic growth, and therefore we should not raise taxes. Working people have had to pay a tax, in essence, by higher gasoline prices. And we don't need to be taking more money out of their pocket. And as we spend the money, we got to make sure we spend it wisely. And so we're going to have inspectors general overseeing the expenditure of the money.

Our OMB will work with Congress to figure out where we need to offset when we need to offset, so that we can manage not only to maintain economic growth and vitality, but to be able to spend that which is necessary to help this region get back on its feet. So it's a big role for the federal government.

There's a big role for private sector. And that's why I call for economic growth zones, an economic enterprise zone. Look, there's not going to be any revenues coming out of that area for a while anyway, so we might as well give them good tax relief in order to get jobs there and investment there. It makes sense. The entrepreneurial spirit is what's going to help lift this part of the world up. So we've got a – I started laying out the outlines of a plan, and it's one that we want to work with Congress on.

Question: What will it cost?

President Bush: Well, it's going to cost whatever it costs. We're going to be wise about the money we spend. I mean, you're – we haven't totaled up all the bridges and highways, but I said we'll make a commitment to rebuild the infrastructure, and to help rebuild the infrastructure. We're also spending money on – $2,000 a family to help these people get back on their feet. There's a variety of programs. The key question is to make sure the costs are wisely spent, and that we work with Congress to make sure that we are able to manage our budget in a wise way. And that is going to mean cutting other programs.

Question: Russian-American relations are largely based on your good personal relations, but in 2008 you both will cease to be President. Have you already put in place any guarantees so that the Russian-American relationship does not get worse than it was during your time in office?

Vladimir Putin: They are already firing us, but we still want to work…No, seriously, I can say that our countries' common interest in developing Russian-American relations guarantees their positive development. By their actions, leaders can either help or hinder this development process. We try to do whatever we can to support this process. And as long as we are responsible for it, we will continue this policy.

President Bush: For example, we will leave behind some legacies – the Moscow Treaty, which commits both countries to reducing our nuclear warheads; trade. In other words, as our countries and different companies begin to invest – companies begin to invest in both countries, that leaves behind a legacy that will be hard for future governments to undo. There's kind of a strategic dialogue, we get in habits sometimes and the idea of setting a way for governments to talk to each other at different levels of government is a good legacy.

And so, we do have three more years, which I found out is a long period of time. And we'll be able to do more together that people – that future governments will view as a way to move forward to keep the peace, and to be – to deal with big issues in a complex world.

Question: Last night you (President George W. Bush) said that greater involvement by the federal government and the Armed Forces may be required in preventing future disasters. Can you elaborate on this? And were you able to convince President Putin of the need to examine the Iranian question in the Security Council?

President Bush: First, on Iran, we agree that the Iranians should not have a nuclear weapon. That's important for people to understand. When you share the same goal, it means, as you work diplomatically, you're working toward that goal.

Secondly, I am confident that the world will see to it that Iran goes to the U.N. Security Council if it does not live up to its agreements. And when that referral will happen is a matter of diplomacy. And that's what we talked about. We talked about how to deal with this situation diplomatically.

The first part of the question was – oh, was how to deal with disasters.

Now, regarding the first part of the question on how to deal with disasters, I don't want to prejudge the commission's – what do they call it, the bipartisan commission that is set up in Congress. I don't want to prejudge their findings. But I do think they ought to seriously consider the fact that there are – a storm, for example, of a certain category, which will require an overwhelming response by government that can only be provided by, say, the United States military through NORTHCOM, because of its ability to muster logistical – logistics and supplies so quickly. And that's what I want Congress to consider. And I think it's very important that Congress consider this.

It's important for us to learn from the storm what could have been done better, for example, and apply that to other types of situations – such as a pandemic. At the U.N. I talked about avian flu; we need to take it seriously. I talked to Vladimir about avian flu; I talked to other world leaders about the potential outbreak of avian flu: If avian flu were to hit this country, do we have the proper response mechanisms? Does the federal government have the authorities necessary to make certain decisions? And this storm will give us an opportunity to review all different types of circumstance to make sure that the President has the capacity to react. And that's what I was referring to. I wasn't drawing any conclusions; I was just suggesting that this be a matter of debate and discussion with the bipartisan commission that is going to be set up there, with Democrats and Republican senators and congressmen.

Vladimir Putin: I must say that our position is clear and understood. We support all agreements on nonproliferation. These fully apply to Iran. In this regard we have always been completely transparent and open with our partners. Yesterday, during the meeting with the President of Iran, we told him precisely this. We are against Iran becoming a nuclear power and will continue to feel this way under any future circumstances.

As to how we can control the situation, there are many different ways and means at our disposal. We would not want for careless actions to result in a situation like the North Korean one. We are in contact with all our partners participating in the process, such as the European trio and the U.S.. We understand what we have to do. I hope that our actions will be coordinated and have a positive outcome. Yesterday I again heard a statement that Iran does not seek to acquire nuclear weapons. That is the first thing I wanted to say.

If you will allow me, today one way or another we are going to come back to the horrible catastrophe that has affected the United States. If George does not mind, I would like to come back to the first question about taking money out of the future generation’s pockets.

As you know, we lived for many decades in the Soviet Union with the credo that rather than thinking about the present generation, we must think of the future one. In the end, by not thinking of the people living today, we destroyed the country. For that reason, of course we must spend money, but we must spend it carefully. We are analysing what happened, and how the government and power bodies responded to the events that took place. Many of us will draw specific conclusions regarding restructuring the relevant services and state organs whose job is to minimise the repercussions of such catastrophes.

Question: The question is for the President of the United States. Mr President, while speaking in the United Nations about the world striving for democracy you mentioned, perhaps conscientiously, countries such as Afghanistan, Iran, Georgia, Ukraine, and Iraq. Do you believe the political situations in these countries are similar? What is your assessment of the situation in Iraq and in Ukraine?

President Bush: Well, no, I think they're all different. I think, as a matter of fact, democracy tends to reflect the cultures and histories of each different country. I do think, though, they're bound by some common principles – one that governments that are elected by the people tend to respond to the people; that they've got minority rights and rule of law. But they're all on different stages of the development of democracy.

Democracy just doesn't happen; it grows, it takes a while. It's the experience of our country. It's the experience of the Russian Federation. I mean, democracies take on the customs and habits of the particular people, and they mature. And so they're at different stages. I mean, clearly, Iraq is a struggling democracy. But one thing is for certain: the people have made their mind about what they want. They want democracy: 8.5 million Iraqis went to the polls, see, and they've got a constitution that's been written. It wasn't written under bayonet or under the barrel of a gun – it was written by people from different factions of the society that have come together. And it will be voted on soon. And then there will be another election. So this is an emerging democracy and it's different from a more mature democracy.

Vladimir Putin: We are all aware of the situation in Iraq. Unfortunately, we are faced with incessant violence. We are well aware that this violence is linked to the upcoming referendum on the constitution. I believe that if we are able to adopt the constitution, this will constitute a big and serious step towards settling the situation in Iraq. In my opinion, this will be possible only if the main political forces and ethnic groups feel that it is their constitution, and if the overwhelming majority of the population accepts this document. If the current leadership can convince the population that this constitution is acceptable for all, will result in stronger government, maintain territorial integrity, and take into account the interests of the main ethnic and religious groups, it will be a real step towards the situation’s settlement. We very much hope that this will be the case.

As regards Ukraine, what can be said here? As I recently said when in Berlin, the political crisis is under the President’s control and we wish him success.

President Bush: Good job. Thank you. Good job.