SECRETARY ALBRIGHT: Good morning. Today we are releasing the State Department's Annual Report on Patterns of Global Terrorism. The story it tells this year is largely heartening, one of terrorists caught, plots thwarted and lives saved, which means that worldwide casualties fell sharply; and the number of Americans killed, while still entirely unacceptable, was the lowest in seven years.

The overall number of terrorist incidents did rise by more than 40 percent, reversing what had been a welcome trend. But this reflected many non-lethal attacks conducted in response to the capture by Turkish authorities of PKK terrorist leader Abdullah Ocalan. That marked a major victory in the fight against terrorism, and it meant that even this one statistical step backward signified a larger stride forward.

But the picture for 1999 easily could have been composed of more shadow than light. Imagine if suspected Algerian terrorist Ahmed Ressam had managed to carry out a bombing when he sought to enter the United States in December from Canada. Or if the al-Qaida terrorist network had acted on its plans to attack Americans during millennium celebrations in Jordan.

And that's why we can not relax our global full court press against terror, and it's why I have made this a top personal priority as Secretary of State, and why we will continue to work with other countries that want to make progress -- not by pointing fingers, but by linking arms.

This year's report also reflects changes in the nature of our common foe. We are seeing a shift from well-organized local groups supported by state sponsors to more far-flung and loosely structured webs of terror. We're detecting a shift from state funding to private sponsorship in criminal enterprises, such as blackmail and trafficking in drugs, guns and even human beings. And we're seeing an eastward shift in the terrorism center of gravity from the Middle East to South Asia, particularly Afghanistan.

But while the face of terror is changing, the need for international cooperation to protect our people and our interests is not. Through our diplomacy and training programs, we help friendly governments to improve border security and share information about those suspected of being affiliated with terrorist networks. We offer rewards for terrorist suspects and gather information to advise and warn Americans. We strive to forge international agreements and cooperation that will leave terrorists with no place to run, hide, do their dirty work, or stash their assets.

And we do all we can to bring suspected terrorists before the bar of justice, as we have in such major cases as the 1998 bombing of two US embassies in Africa and the sabotage of Pan Am Flight 103 over Lockerbie, Scotland, in which a long-awaited trial is scheduled to begin the day after tomorrow.

All this doesn't come cheap, but the resources we seek from Congress to conduct our programs, protect our people and secure our embassies and buildings against attack are not a luxury. They are a practical and moral necessity, and a national security bargain.

I am gravely concerned, therefore, by congressional proposals to slash more than $2 billion from the President's international affairs funding request. These reductions will harm plans to upgrade security and complicate efforts to counter terror. This is no time to shortchange American leadership. Congress should approve the President's full request.

For the past several years, the list of state sponsors of terror has gone unchanged, but that doesn't mean it is unchangeable; on the contrary, the very purpose of this process is to get countries out of the terrorism business and off the list. Governments that would like to see their names removed know exactly what they must do: stop supporting, financing or planning terrorist acts, and stop harboring or interfering with the pursuit and prosecution of those who commit them.

In closing, I want to commend the State Department's Counter-Terrorism Coordinator, Ambassador Mike Sheehan, and his team for their tireless efforts. And to our many partners in other agencies and other countries, I say a hearty thank you. We appreciate what you've done and what you're doing, and we look forward to working with you in the future.

And now Ambassador Sheehan will respond to your questions.

AMBASSADOR SHEEHAN: Thank you. Let me just make a couple of quick remarks before we start. Today we released the report, the Annual Report Patterns of Global Terrorism. The report was sent to the Congress on Friday afternoon, as required by law, and I briefed key staff members last week. The purpose of the report is to outline terrorist events of the previous year and the extent in which countries cooperate with the United States.

I think it's extremely important to properly characterize the nature of the threat, to describe the problem, and it is a complex one. Because once we understand the problem in clear terms, it's easier to construct an effective policy.

We had a good year in 1999. As the Secretary mentioned, it could have been very different. I'll also mention or outline in the report two key areas of concern in South Asia and in the Middle East. I'm you'll ask me that in the Q&A. And, also, since I know most of your questions will focus on the bad news, I want to just highlight a little bit of the good news that's in the report.

First of all, in Egypt for the first time in many years, there were no terrorism related deaths. In addition, the unilateral cease-fire announced by Gama'at al-Islamiyya continues to hold in Egypt.

In Jordan, they continued a strong commitment to countering terrorism, as demonstrated by its crackdown on HAMAS last August and reflected in the -- and, of course, the arrest of the al-Qaida cell that the Secretary mentioned in December. And there were no major terrorist attacks in Jordan in 1999.

Also, in Israel, Prime Minister Barak and others have publicly and privately acknowledged the continuing improvement in Israeli and Palestinian Authority cooperation on security issues.

Throughout the Middle East, I can report there is an improved cooperation in disrupting cells and extraditing terrorists back for trial -- and this has paid dividends in the past year.

The Secretary mentioned the arrest and trial of Ocalan, which is also, in the long term, a very positive step.

Seven countries remain on the list -- you know them -- Cuba, Libya, Iran, Iraq, North Korea, Sudan and Syria. I'm sure I'll get into some of your questions on that in the Q&A.

I'd like to conclude my remarks by thanking the Assistant Secretaries in the State Department -- none of them are here -- that work with me on a daily basis to drive home the counter-terrorism policy, which I think is extremely important and bearing fruit in protecting our overseas. And also, particularly, the counter-terrorism community, inter-agency community, FBI, CIA, Justice, Treasury, the Pentagon and at the White House. That's an extraordinary team that's very focused.

We got a little bit lucky last year, but I've always believed if you work really hard and you cooperate well that you can improve your chances of being lucky. The threat remains very real. There is no guarantees in this business. We continue to keep up our guard, and hopefully this year we'll continue the trend of the past year.

Thank you, and Ill take your questions.

QUESTION: Thank you, Mr. Sheehan. Richard Clarke of the White House terror --

AMBASSADOR SHEEHAN: A terrorist? (Laughter.)

QUESTION: Counter-terrorist from the White House, the leader I believe, said that the 2000 rollover period was one of victory; victory had been won in that period with various arrests in Jordan, arrests in Seattle, et cetera.

Do you agree that that particular part of the war was won, but that -- excuse me, that part of the war, that battle, the particular battle was won, but the war goes on? Would you agree with that statement?

AMBASSADOR SHEEHAN: I think that's a pretty good characterization. I would hate to say victory in a struggle like this but, for that discrete period of time over the millennial holiday celebration, we were able to thwart several plots and avoid any attacks. But we know those organizations are still at work and we're going to have to keep our efforts up through the year.

QUESTION: Mr. Ambassador, the concern over Pakistan is not a new one. Although it's been listed now, the fact is that there's been enormous support from Pakistan to the groups in Kashmir and various other groups for several years. Why, at this point, has the Clinton Administration not gone beyond this report and listed Pakistan with the state sponsors included in the list of state sponsors?

AMBASSADOR SHEEHAN: I don't believe that Pakistan merits being designated a state sponsor. Pakistan is a friendly country; they cooperate with us on numerous terrorist issues, most recently with the extradition of an individual, al-Deek, back to Jordan for that trial. They have some issues. They've been raised at the highest levels by the President himself when he was in Islamabad, by the Secretary and others. We continue to work with them, but they definitely need to improve their efforts on this issue.

QUESTION: Ambassador Sheehan, could you talk a little bit about Libya, given what they see as their efforts to try and improve their record? And a lot of other countries seem to have recognized this. Great Britain is now pretty much back to full diplomatic relations and we're the lone holdout.

Why does Libya continue to be a problem, in your eyes?

AMBASSADOR SHEEHAN: The key issue for Libya is the trial of Pan Am 103, which the Secretary said starts this week. There were UN resolutions put on Libya in 1992 regarding the bombing of Pan Am 103, and Libya, in fact, is not in compliance with two of those aspects of that resolution: first, to cooperate throughout the extent of the trial -- and since it hasn't started it would be impossible to gage their full cooperation in that trial, a trial that should have started a long, long time ago for an event that happened December 21st of 1988; and, secondly, for full compensation of the families. So Libya will remain on the list. Libya must comply with the UN Security Council resolutions. If and when they do, we'll then look at that issue and then we'll look at other issues in the future.

But clearly -- let me just say this about Libya. I believe that the political pressure and the sanctions that were associated with the UN resolution since '92 have helped drive Libya out of the counter-terrorism business. Although, if you read the report, they do not get a clear -- there are still some issues remaining -- their links to terrorism have dramatically declined since the 1980s.

QUESTION: Does that mean -- what you just said about Libya, that if there is a -- if these two guys are found guilty in the trial and if compensation is paid and if the Libyans are deemed to be cooperating, they are going to be taken off the list? And then, conversely, what happens if, in the trial, these two guys are found not guilty? Does that mean that Libya's inclusion on this list depends solely on something that it has no control over?

AMBASSADOR SHEEHAN: I didn't say that it would be taken off the list if they conformed with the UN Security Council resolutions. That's an independent judgment. And I'd rather not get into hypotheticals. I think the first thing to do regarding Libya is see how it goes through the trial, the compensation; let's deal with the UN Security Council resolutions first. We'll look at those other issues in the future.

QUESTION: Sir, on the same subject, what is contained in the classified annex? Well, I guess we have it right there. What's contained in it? Why has the annex to Kofi Annan's correspondence to Muammar Qadhafi setting the terms of the trial -- why has it been classified? The family members are very upset about that because they say that this annex guarantees that Qadhafi personally will not be held responsible for the bombing, nor will anything be allowed to develop that would be embarrassing to him or his regime.

And, you know, this brings us to the obvious question. These two guys were agents. They were stooges. Qadhafi is the one who is responsible for this bombing. What is the US Government going to do about him?

AMBASSADOR SHEEHAN: First, regarding the issue of the letter first, that's a UN document, first of all. The part of the documents I believe you're referring to go through the normal classification procedures in State Department, and they have classification on them. But we've offered to -- I've briefed the content of that letter many times to different people and we've offered to brief the Congress on that. But the actual document itself is a UN document.

QUESTION: Then, is it true what the family members are saying, who have been briefed, that Qadhafi himself will not be held responsible and his government would not be put in a bad light?

AMBASSADOR SHEEHAN: The answer to that is negative. And the Scottish trial which will start this week, they have repeatedly made it clear that they will take this trial wherever it goes up the line.

QUESTION: Ambassador Sheehan, you said Pakistan is a friendly contributor also. Sir, Pakistan is also a militarily controlled country after the overthrow of the civilian government, number one. Number two, in your introductory letter you said that Pakistan continues sending mixed messages on terrorism and also terrorists are living and moving out of Pakistan freely and also they are supporting terrorist activities in India.

So what do you -- what does that mean?

AMBASSADOR SHEEHAN: You just read it. I don't know what I could add to that.

QUESTION: No, what do you mean by sending -- keep sending mixed messages?

AMBASSADOR SHEEHAN: They have a mixed record on it. On the one hand, they'll cooperate with extradition, they provide good security for our embassies, we have a good relationship with them on a broad range of security issues. But, on the other hand, they have relationships both with Kashmiri groups and with the Taliban in Afghanistan that are troubling, and they need to improve their record on that score.

QUESTION: And so how come it says a friendly country when there is no civilian government and a military government that keeps coming and overthrowing the elected government?

AMBASSADOR SHEEHAN: I'll leave that issue to the South Asian Bureau.

QUESTION: Are we seeing there is encouraging sign for North Korea? Is that meaning that you could remove North Korea from the list in the near future?

AMBASSADOR SHEEHAN: North Korea has been designated a state sponsor this year. As in all seven of the state sponsors, as the Secretary said, we would like to see all of them get out of the terrorism business. I'm not worried really about the list. I'm worried about their involvement in terrorism. We want all seven of them -- and the 28 organizations -- to get out of the business of terrorism. That's what the policy is designed to do.

So in the case of North Korea being one of the state sponsors, I'd like to see them get out of the business and get off the list. It seemed to me -- and I told this to the vice foreign minister -- that, from my analysis, that North Korea did not have important links to terrorist organizations now. Some other state sponsors -- and I will not get into them by name -- have more difficult political relationships with terrorist organizations. North Korea does not. It seemed to me -- and I told him that -- that if they wanted to take key steps -- and they had to take steps, there's not a free pass -- that they were in a position to move themselves on the other side of the ledger on terrorism and get off of the list in the future. But they've got things to do.

QUESTION: If you were a lawyer, would you be prepared to take the US case against Cuba into a court on a contingency basis?

AMBASSADOR SHEEHAN: Absolutely, Barry. You ask us every year, actually.

QUESTION: Yes, I do, and I'll keep asking.

AMBASSADOR SHEEHAN: And I'll respond to it.

QUESTION: Because there's a political situation in this country and I have to hear you say whether that had any impact on including Cuba, which came in for 85 words -- I counted the words. You have 85 words with which you indict Cuba. You have no -- you say nothing about them exporting terrorism, which used to be the main complaint about Cuba under Castro.

So, yes, every year I will try to get you to make the case why Cuba is on the list for other than political reasons.

AMBASSADOR SHEEHAN: And this year, in anticipation of your question, I personally drafted the section regarding this. And I said that some countries do not have -- are not involved directly in terrorism at the time but they have problems in two categories: harboring of past terrorists and continuing linkages to foreign terrorist organizations. Cuba falls in both of those categories.

It is very important to the United States Government that a terrorist knows that he can't conduct a terrorist act and hunker down in a country for a certain many years and get away with it. Cuba has to deal with the terrorists that it is harboring, and with some links to some terrorist organizations. If they were able to do that -- they know what they need to do. They've known it for a while. They need to take those steps.

QUESTION: All right, a follow-up. You say some countries are not directly involved in terrorism. Of the seven, which countries are not directly involved in terrorism besides Cuba?

AMBASSADOR SHEEHAN: I won't get into that kind of categorization.

QUESTION: There are only seven. It shouldn't be that hard to do.

AMBASSADOR SHEEHAN: Ask me more specific questions.

QUESTION: You said "some." It's an ambiguous remark and the question is: Is Cuba directly -- and by inference it isn't, by your 85 words --

AMBASSADOR SHEEHAN: Cuba has links to several terrorist organizations that it needs to address.

QUESTION: Can I follow up on that?

AMBASSADOR SHEEHAN: Two in the ETA and two Colombian organizations, the FARC and the ELN.

QUESTION: A follow-up on Cuba? You were quoted in USA Today three weeks ago as saying, "I have told people on Capitol Hill if you have a problem with Cuba on human rights, get your own sanctions; don't use mine."

AMBASSADOR SHEEHAN: I actually said that regarding all seven of the state sponsors, many of which have other sanctions involved with them. And what I have tried to do with -- to send signals to all seven of the state sponsors that, for terrorism, that if you get out of the terrorism business you'll be dropped from the terrorism list. But there's no free pass on that, and it won't be hinged to other issues.

And I don't feel political pressure on any of the seven state sponsors that affects my judgment in characterizing them as state sponsors. To include Cuba, Barry.

QUESTION: Unless I'm mistaken, you've got seven on the list. Afghanistan is not among them. You're saying that state sponsorship is going down but the list isn't changing. You're also saying that terrorism is coalescing and concentrating in Afghanistan, yet Afghanistan isn't on the list.

AMBASSADOR SHEEHAN: Right. And I addressed that in the report. Afghanistan is not on the list because we don't recognize the Taliban as the government of Afghanistan, nor does the UN. Only two or three countries recognize Taliban as the legitimate government of Afghanistan. That's why they're not on the list of state sponsorship. There is a series of executive orders and UN sanctions that address that issue.

QUESTION: If I could follow up, Afghanistan, ever since the Soviet invasion, has been a known exporter of terrorism all over the Mid-East in various ways. Is it your contention that terrorism is sort of collapsing in on Afghanistan and concentrating there, or are they still exporting it just as much as they were. So where's the increase on their -- you know, on the --

AMBASSADOR SHEEHAN: The way I would describe Afghanistan -- it's in the report -- as in the areas of Taliban control, although the Taliban I do not believe is hostile to the United States. In fact, they repeatedly tell me that they want good relations with the United States, and I believe that to be a sincere desire.

However, within the territory that they control, there are numerous terrorist organizations that directly threaten the United States, that directly undermine the security of the region and other parts of the world. And that is a problem, and it is an enormous problem for the Taliban that they have to address.

QUESTION: Sir, I have this basic question, there is a terrorist organization named Turkish Hizballah which is mentioned in your report only by name. And, indeed, this organization turned out to be one of the most violent, most bloody, terrorist organizations ever emerged in Turkey. But, yet, we don't see this organization on your list of designated organizations.

Do you think that it doesn't meet your criteria, or what's the point?

AMBASSADOR SHEEHAN: Which one is it?

QUESTION: Turkish Hizballah.

AMBASSADOR SHEEHAN: Yes. Actually, there are several different -- we are required to report on all foreign terrorist organizations as designated by the State Department, and all other terrorist organizations are not designated. The designation of a foreign terrorist organization is a very complex, precise and legal process, and we've designated 28. There are numerous others that are under continuous review, and that's one of them that's under review but hasn't met the legal criteria that's done by an inter-agency team of analysts and lawyers that fit our definition. It hasn't made it yet, but we're watching them; they're under review.

QUESTION: In your negotiations with the North Koreans, you've laid out a road map for them as to what they need to do to get off the list. Could you just summarize what the road map is for Libya to get off the list?. And then, also, on Pakistan, could you give us a sense as to what your greatest concern is about Pakistan and terrorism?

AMBASSADOR SHEEHAN: For Libya right now, the road map that I will get into at this point is complying with the UN Security Council resolutions. Beyond that, we will think about road maps after that. But for right now on Libya, we are focusing on those Security Council resolutions.

On Pakistan, they have two problems. One is to their east in Kashmir with links to certain groups such as the Harakat Mujahedin which is mentioned in the report, and to the west with their relationship with the Taliban and activities in Afghanistan.

QUESTION: Ambassador, what specific steps should be taken by North Korea to be removed from the list?

AMBASSADOR SHEEHAN: In North Korea, I won't get into all the specifics. But one of the issues is the harboring of five Japanese Red Army terrorists from a 1970 hijacking. They have some other issues involving links to certain terrorist organizations that are low level in nature but are still significant, and they are going to have to address them.

QUESTION: The government of Colombia has started a demilitarized zone for the ELN to begin conversations with the second largest guerrilla group in Colombia, even though they still haven't released all those that were kidnapped in the hijacked plane last year. I wonder if you could evaluate if this could help, perhaps, to reduce or actually might help to increase the terrorist attacks by the ELN in Colombia?

AMBASSADOR SHEEHAN: We support the government of -- elected government of Colombia's efforts to try to proceed with a peace process down in Colombia. And I don't think I am, from this podium, going to comment on the Colombians' policies regarding that.

QUESTION: May I follow up? The paramilitary groups, you told us last year that you were considering, but it seems that you still haven't decided to put the paramilitary groups on the list.

AMBASSADOR SHEEHAN: They are under active -- very active -- review. And I would expect, over the next few months, I will have an answer for you on the right-wing paramilitary groups in Colombia. Again, it is a legal process and one that was very meticulous.

QUESTION: Does that mean that it could be included in next year's list?

AMBASSADOR SHEEHAN: Paramilitary groups in Colombia?

QUESTION: Yes.

AMBASSADOR SHEEHAN: We normally, first of all, for state sponsorship or the designation of foreign terrorist organizations, you can do it at any time during the year. And they are -- that particular group is under review right now. If we come up with a case, if we can make the case from our legal definition, they will be designated any time during the year.

QUESTION: Ambassador, I have two quick questions about Pakistan. One, the report cites continued incidents of incursions from Pakistan into Kashmir. And I wonder just if you can comment on how serious you find those incursions for peace in the region, what the US can do about stopping those?

And, second, there was a gathering of Islamic clerics last week in Pakistan and I wonder if that group and their call for jihad is at all reflected in your assessment of the terrorist situation there? Thanks.

AMBASSADOR SHEEHAN: The answer to the first question, in terms of incursions across the line of control, that is really an issue more for the South Asian Bureau. What I am concerned about in Pakistan is the links of the government of Pakistan to some of those Kashmiri groups and their involvement in terrorism, such as the HUM, the Harakat Mujahedin.

Now, what was the second question?

QUESTION: The group of clerics that met last week called for a jihad to free Pakistan -- Kashmir, and if that is it all part of the concern about terrorism, that particular group?

AMBASSADOR SHEEHAN: It is a concern, yes. I wouldn't say that particular incident. And, besides, that's 2000. We're really talking about 1999 here. But that's -

QUESTION: The emergence of fundamentalist religious leaders is a concern of -

AMBASSADOR SHEEHAN: It is actually not an issue of terrorism, actually. We concern ourselves with terrorist acts, criminal acts.

QUESTION: The government of Pakistan and a lot of people in Pakistan believe that the Kashmiris are -- they are freedom fighters, especially if they are targeting Indian soldiers. How do you consider attacks on Indian soldiers by some of these groups? Do you consider that terrorism or is that not terrorism?

AMBASSADOR SHEEHAN: Our definition of terrorism by the legislation is very explicit. But in general terms, in a war, if military forces are attacking each other, it's not terrorism. But if an armed terrorist organization attacks civilian targets, that's terrorism. So that's generally the breakdown.

Or if you attack -- it's also -- there is a footnote in the report that includes a terrorist attack if you attack military people in barracks, such as the Khobar bombings or the Marine barracks in 1982. Those are terrorist acts. Each case is taken on a case-by-case basis.

QUESTION: So, for example, if the United States were to drop -- what do you call them? -- cruise missiles on people that were in barracks or in tents, as it may be, would that be terrorism? Could that be terrorism?

AMBASSADOR SHEEHAN: No.

QUESTION: Following the Ahmed Ressam case, you were mentioning in your report that there were some Afghan alumni linked with Usama bin Laden that have been arrested in Canada, some are in Canada. Do you think that they are in Canada to specifically get into the US, and which kind of threat do you think they represent to the United States?

AMBASSADOR SHEEHAN: Well, clearly, this one individual was trying to smuggle explosives into the United States. I wouldn't speculate on the rest of those cells now under investigation. But, clearly, we are concerned with that, as is the Canadian Government, and we've stepped up our cooperation to prevent future acts like that.

QUESTION: Ambassador Sheehan, perhaps you can shed some light on the thinking behind the designation of terrorist groups if you could explain why none of the Northern Irish groups have been designated?

AMBASSADOR SHEEHAN: When we first did the foreign terrorist organizations, the designation, there had been a peace process just put in place between the IRA and the authorities in Northern Ireland. We were asked by both sides not to designate, both by the Irish and the British sides, not to designate the IRA or those other groups because the cease-fire was in place and holding.

At this time, other groups, splinter groups or other groups on both sides of that equation, can be under review for designation as a terrorist organization, but none have been done so at this time.

QUESTION: (Inaudible.)

AMBASSADOR SHEEHAN: I won't comment right now.

QUESTION: On the terms of this designation and non-designation, there are, by my count, 46 that are identified.

AMBASSADOR SHEEHAN: Right.

QUESTION: Only 28 of those, you're saying, are actually designated?

AMBASSADOR SHEEHAN: Correct.

QUESTION: Has any group ever been taken -- the difference between this one and last year's, I was going through. I found one -

AMBASSADOR SHEEHAN: Two. Two, the DFLP and a Chilean group were taken off the list last year.

QUESTION: And is there a reason why, for the last year, the United States has been running around -- well, not running around but has agreed with the Russians that there are terrorism problems emanating from Chechnya and why there are no Chechen groups that are even identified in this year's report?

AMBASSADOR SHEEHAN: They are under review as well. It's a new organization. New organizations, it takes a while. It is a very technical process.

QUESTION: But you did manage to get the Islamic Movement to Uzbekistan on here.

AMBASSADOR SHEEHAN: They're not designated yet.

QUESTION: Right, well, but they're mentioned. They're mentioned while the Chechen groups are not.

AMBASSADOR SHEEHAN: That's correct.

QUESTION: Can you talk about Iran and the political attempt, on the one hand, to try and moderate relations and open them up again and, on the other hand, you've named them, they're still on the list and you talk about their export of helping other people, helping groups undermine the peace process?

AMBASSADOR SHEEHAN: We're concerned about the government of Iran and specifically with two of the organizations that are mentioned by name in the report, the Revolutionary Guards and their intelligence service, that are involved in actively supporting groups that are opposed to the Middle East Peace Process, and particularly Hizballah, HAMAS and the Palestinian Islamic Jihad. Those organizations remain actively committed to disrupting the peace process through those organizations.

On the other hand, we recognize, as Secretary Albright laid out in her speech, that there are other dramatic changes happening within Iran and we are trying a policy that fits, to respond to those conditions in Iran.

QUESTION: On Pakistan, could you explain the distinction between "government links" to these terrorist groups and why they are not considered a state sponsor?

And, as far as Libya and Cuba are concerned, even though you've noted that they are limiting their direct involvement, that they are curtailing terrorist activities and they're still on the list, are you afraid this sends the wrong message to actual state sponsors that efforts to get out of the terrorism business will not bear fruit?

AMBASSADOR SHEEHAN: Who was the first one you asked about?

QUESTION: Pakistan, the distinction between government links to FTOs and then why aren't they considered a state sponsor if they have these links?

AMBASSADOR SHEEHAN: When we look at the designation of a state sponsor, we look at the entirety of the country's record on counter-terrorism. And in the case of Pakistan, although we have some problems and issues with them, they were not designated a state sponsor. They do have problems, as I alluded to before, and we are pressing them to move forward on that.

Regarding the other countries, they need to take the specific steps that -- they know what they need to do in order to get off the list. And I would, as I said, I want all seven of them to move from the terrorism side of the ledger over to the -- out of the business and off the list.

QUESTION: If I could just follow up, isn't there a way to kind of show that they've made progress, that they're kind of on their way to getting off of the list?

AMBASSADOR SHEEHAN: I think that's laid out in the report pretty well, that it's pretty clear, if you read some of the state sponsors, that their involvement is fairly minimal. But there are clear steps that they have to take. And that's what I'm trying to signal right now from this podium, as the Secretary did in her opening remarks. They know where we are and they know what they need to do.

QUESTION: The Turkish Government believes one of the supporters of Turkish Hizballah is Iran. But there is nothing about that in your report. So what is your comment? Do you believe or not Iran supports Turkish Hizballah?

AMBASSADOR SHEEHAN: If it's not in the report, I probably won't comment at this point.

QUESTION: I noticed that out of the seven states that sponsor terrorism, according to your report, President Clinton met only with one head of these states, which is President Assad of Syria, and shook hands with him this year.

Could you be more specific what the United States wants Syria to do, besides going down the road of a peace agreement with Israel, to do? You dealt very generally with Syria in your report. Could you be more specific what Syria has to do?

AMBASSADOR SHEEHAN: I think it is fairly specific what Syria needs to do in the report, and it has to do with the movement and the activity of these terrorist groups that are mentioned in Damascus and other areas of Syrian control in Lebanon. They know they need to have that activity ceased.

QUESTION: Your report on Greece is very harsh this year. You criticize the Greek Government for lack of leadership on counter-terrorism. And can you be more elaborative on this? What do you expect from the Greek Government?

And my second question is, if you have anything to report on the bilateral agreement with Greece and why this thing doesn't go forward?

AMBASSADOR SHEEHAN: I think the report is pretty clear, that there were 20 incidents in Greece last year directed at the US Government and other interests. Dating back many years to 1975, five Americans have lost their lives in Greece. There have been no arrests, no convictions, no jail time for any terrorists involved in those or any other incidents.

They know what they need to do as well in terms of improving their commitment on these terrorist issues. We've had very detailed conversations with them at a range of different levels and I think it is fairly well covered in the report.

QUESTION: A follow-up, if I can? The Prime Minister of Greece and the Foreign Minister in many statements describe this as one of the biggest priorities of the Greek Government, the counter-terrorism issue. And you still criticize them for a lack of leadership. Why is that?

AMBASSADOR SHEEHAN: Well, those statements are a first -- a good first step. But we really need them to take clear action regarding arrests, trials, prosecutions, some of the restructuring of the police organizations that we have suggested that they do.

QUESTION: Two things. Can you tell us, have you identified any of the targets that Ressam and his backers were planning to attack?

AMBASSADOR SHEEHAN: We haven't. You would have to direct that to the bureau.

QUESTION: And, secondly, have any of these terrorist organizations, do any of them currently possess weapons of mass destruction?

AMBASSADOR SHEEHAN: Right now, we know that there are some that are seeking to acquire weapons of mass destruction. And some, such as Aum Shinrikyo, have used it in the past. Although, fortunately only 12 were killed in that attack in the Tokyo subway with sarin gas.

Others are trying to acquire, but we don't -- I couldn't comment now whether any of them have a capability to deliver serious weapons of mass destruction. I believe not, but we are very concerned about them trying to acquire that capability.

QUESTION: Ambassador, you said that you had seen a shift this year in terrorism going from not as much state sponsorship to more individuality and to a shift to South Asia. Is there anything that you are going to do to respond to this, a difference in tactics, a difference in resources?

AMBASSADOR SHEEHAN: I think this shift has been going on, actually, for quite a while. I just speak more explicitly about it this year. And, yes, it does mean you have to shift your strategy. If you have an organization that is clearly linked to a state sponsor and is more hierarchical in nature, it calls for certain kinds of responses. Primarily, you put the heat right on that state sponsor.

And I think in Libya, that was the case in the mid-'80s, where they had direct contact with groups such as Abu Nidal organization, where you could put the pressure on government to drive them out of that support and they have expelled Abu Nidal out of Libya. If you have organizations that have less direct links to state sponsorship, the organizations try to find what I refer to as swamps. They try to find a way to operate, move and plan and raise money and train their people in areas outside of government control. They try to slip through the cracks.

What it requires is much more intense cooperation across a wide range of relationships with member states. Some of them have a strong will and capability; others do not. It is our job to try to improve the will and the capability of those key member states where this phenomena is occurring, in order to get them to take the proper steps to address that issue of these non-state actors in their territory. And that is primarily an issue of political will and then, right behind that, giving them some capability -- training, equipment and otherwise.

Thank you very much.

(The briefing was concluded at 12:35 P.M.)