The U.S. and Iraq will work together next year to shift Iraqi resources from unproductive subsidies to productive uses that enable Iraqis to earn livelihoods.

In my job I do my best to look forward.

It is important that the Iraqi people have confidence in the election results and that the voting process, including the process for vote counting, is free and fair.

The terrorists want civil war. Al-Qaida is attacking Shiites. The Shiite militias are taking revenge on the Sunnis. And the Sunnis are become more extremist, with some joining al-Qaida.

The Sunnis continue to see themselves, possibly for nostalgic reasons, as the most influential group and want a stronger central government - quite unlike minorities in other countries. The circumstances here are far more complex than many people in Washington imagine.

We can't say whether Tehran is supporting Al Qaeda, but we do know that al-Qaida people come here from Pakistan through Iran.

I consider the modernization of the Middle East the central challenge of our time. This region behaves as if it were disturbed, if you'll excuse the clinical expression.

Iran is undertaking a massive effort to expand its influence in southern Iraq. At the same time, that influence decreases the more the political process in Iraq progresses.

Besides, many Islamic movements will change as soon as they gain political responsibility. I'm not at all pessimistic in this regard. Just think of Turkey, where the Islamists are now behaving like a sort of Christian Democratic party in Europe.

Today we're seeing fundamental conflicts within political Islam, with the fundamentalists on the one side and the moderates on the other. Who gains the upper hand means a great deal to the world.

We're dealing with such enormous problems today that we have no other choice but to work together. If Iraq fails, if a religious civil war breaks out and the neighboring states are drawn into this conflict, if the Kurds declare independence and al-Qaida takes over an entire province - that's when the consequences will be dramatic.

Success in Iraq will be a major setback for terrorists and a major asset for the security of this region. The struggle for Iraq is the struggle for the future of the world.

I don't believe that military intervention is always the right approach. What we need is a comprehensive strategy, one that advances democratization, economic reforms and equal rights for women.

During the Cold War era, the issue was the containment of Soviet influence, and we tolerated many an authoritarian regime as long as they were useful to us in this respect.

Everyone believes that the prospect for a civil war has diminished significantly over the past several days. All the mainstream leaders of Iraq believe that civil war must be avoided. It's very positive that they are all saying it.

The national unity government will need to implement a program that brings all Iraqis together, builds a happy future for the people of Iraq, and gets Iraq to stand on its own feet.

I constantly signal to the Iraqi leaders that our patience, or the patience of the American people, is running out.