PRESIDENT SAAKASHVILI: Well, Madam Secretary, dear guests, distinguished members of the media, first let me begin on behalf of the Georgia people by congratulating Secretary Clinton, her delegation, and all American people, for the Fourth of July. Two hundred and thirty-four years ago, America began a bold and transformative experiment, based on a set of fundamental values. These are also the values we share with you. And every time we speak and talk and think about transformation of Georgia -- and, Madam Secretary, you could have seen on my bookshelves works by Thomas Jefferson and other founding fathers, framers of the U.S. Constitution -- I keep going back and reading them. But it's also not only me, but the whole team which you saw today here that believes and very much thinks in those terms and values.

So it is, therefore, with great pleasure, and it's a great honor as well, to welcome you, Madam Secretary, to a free Georgia. If we are able to welcome you to an independent and democratic country, it is largely thanks to the solidarity of the American people, to our profound and deep partnership, and to the consistent leadership shown by President Obama and Secretary Clinton.

Throughout the years, since the fall of the Soviet Union, American assistance has been decisive in protecting Georgian independence, helping our democracy to grow, and in making our own experiment truly (inaudible). This has been especially true in the recent critical period after the invasion of our country in 2008 in his statements defending our sovereignty by President Obama, the visit of Vice President Biden here last year, and your personal commitment to the end of occupation of our country even a few days ago in Krakow, have been and are essential.

I would like to take this opportunity to once again publicly thank you and the American people for their assistance and partnership provided in support of our democracy, our reforms, and for the $1 billion of assistance that was so critical in our time of need. These are all concrete examples of our lasting and strategic partnership, and they demonstrate (inaudible) a special U.S.-Georgia relationship. Because our relationship was based on shared values and our common aspirations, I know that it can only deepen and grow under our leadership.

Our substantial and friendly discussion today confirms to all of us that the support we receive, the partnership we have built, is growing in substance and form. I am very aware that much remains to be done to ensure security and to continue our reforms, including the modernization of our country. But we want to tell the world that Georgia is a model of political and economic reforms, is a shining example -- at least for this region -- Georgia, as a full-fledged, optimistic country, is back. And despite the occupation and (inaudible), we have a robust and meaningful economic growth.

Despite these challenges, we are pursuing our integration through the family of Western democracies. And we will never stray away from the path of profound democratic and social transformation. On this path we know that we can count on U.S. assistance, support, and leadership. Our strategic charter unites our two countries and peoples. It has created an ideal framework for continuous cooperation, (inaudible) from security to democracy, people-to-people relations, and economic cooperation. Our charter is based on the common values that make our partnership universal, the strong belief that nations can choose their path, and the firm conviction that individual freedoms are the basis of every accomplishment you can have.

Let me tell you today I feel more certain than ever that these values have found in this American (inaudible) strong and dedicated promoters and leaders. Here in Georgia we will continue our efforts with renewed vigor. Our progress cannot and will not be stopped. I look forward to building up what we discussed today, and to strengthen our common legacy. Thank you, Madam Secretary. You have the floor.

SECRETARY CLINTON: Thank you very much, Mr. President, and thank you for this very kind and warm welcome to Georgia. This is a wonderful opportunity for me, because this is my first visit here, and it will not be my last. And so I thank you for the very productive discussions that we have had.

And I want to say publicly what I have said privately. I came to Georgia with a clear message from President Obama and myself. The United States is steadfast in its commitment to Georgia's sovereignty and territorial integrity. The United States does not recognize spheres of influence. President Obama and I have also communicated this message directly to our Russian counterparts, most recently during our meetings in Washington on June 24th.

We continue to call for Russia to abide by the August 2008 cease fire commitment signed by President Saakashvili and President Medvedev, including ending the occupation and withdrawing Russian troops from South Ossetia and Abkhazia to their pre-conflict positions. We also stressed the need for humanitarian access to the territories. And we will continue to work toward a peaceful resolution of the conflict through established international mechanisms and constructive non-violent channels.

The United States and Georgia share a deep friendship. And we very much value the partnership between our countries. We are committed to the success of Georgia's democracy and economy, and we are continuing to build on the framework for cooperation that was institutionalized in the U.S.-Georgia charter on strategic partnership last year.

We very much appreciate Georgia's significant contributions to the international security assistance force in Afghanistan, and honor its commitment to fighting terrorism around the world. As we stand here today, Georgian soldiers are fighting alongside U.S. Marines in Helmand Province, and helping Afghans build a more peaceful future for their own country. And I thank the Georgian people, and particularly the Georgian military, for their service, sacrifice, and bravery. These contributions provide strong evidence of Georgia's diligent movement toward meeting the requirements for membership in NATO.

We are also committed to supporting Georgia's political and economic reforms. We are pleased to see Georgia's steady economic growth in the wake of the global financial crisis. And we were encouraged by the steps made toward meeting the OSCE and the Council of Europe standards for democratic elections seen in the recent municipal elections.

Earlier today I met with women leaders who are helping build a culture of democracy and confidence in the electoral process. Georgia has made real progress in the past few years, improving living standards, reducing corruption, and building one of the fastest reforming economies in the world, all while facing some very difficult circumstances. But, as you know better than I, there are still shortcomings. We want to urge Georgia to continue the work of the Rose Revolution. And the United States will do everything we can to assist our partners inside and outside the Georgian Government, as they strive to strengthen democratic institutions and processes.

We are committed to supporting Georgians, Georgians who are working to build a future that is freer, more democratic, more prosperous, and more secure. And I personally am looking forward to watching Georgia's continuing progress. And I thank you, Mr. President, for these very constructive discussions.

PRESIDENT SAAKASHVILI: Thank you, Madam Secretary.

QUESTION: Georgian (inaudible). Mr. President, Madam Secretary, my question is today, during the meeting with family leaders, you said that in Georgia many peoples live in condition of occupation. And so you mentioned that USA never accepts occupation of Georgia. And my question is, do you want to discuss with Russian leadership during -- between your (inaudible) -- (inaudible) during meetings with the national leadership?

PRESIDENT SAAKASHVILI: So did they discuss or not? That's the --

SECRETARY CLINTON: The answer is yes. As I told the president, President Obama and I and other American officials raise our concerns about the invasion and occupation with Russian counterparts on a consistent basis. And it is very important for us that we do so, because we are very frank in asserting our concerns and our ongoing support for Georgia's sovereignty and territorial integrity.

Now, we are engaging with Russia bilaterally, in talking to Russian leaders about our concerns. But we also are engaging multilaterally through the Geneva process and in OSCE. We have expressed our concerns about the Russian Government's construction of permanent military bases. We have made clear that we consider such construction to be in contradiction to Russia's 2008 cease fire commitments. And we continue to call on Russia to fully comply with the cease fire agreement that they signed, including the withdrawal of their troops to the pre-conflict positions, and humanitarian access to the separatist regions.

PRESIDENT SAAKASHVILI: Any American journalists? Yes.

QUESTION: Ahmed of Reuters. Secretary Clinton, in your remarks at the town hall this morning, you said that the United States wants to revive and intensify the Geneva diplomatic process. What exactly do you have in mind in that regard, given that the process, as your language suggests, is somewhat moribund?

And, secondly, at the same event, you talked about how making Georgia a vibrant and economically and politically vibrant society was, in a way, the best rebuke to the Russian presence in South Ossetia and Abkhazia. And it seemed almost as if you felt that there was little or no hope of any kind of a short-term solution here, and that this is perhaps a medium or a long-term objective, at best.

Is that how you see it, that this is something that simply won't happen any time in the foreseeable future, and therefore, one needs to think very long-term about a resolution?

SECRETARY CLINTON: Well, we would, of course, like to see action immediately. And that is one of the reasons why, as I responded to the young woman's question, we engage with Russia in many different settings, one of which is in Geneva. We believe that the Geneva discussions are an important international forum to try to enhance transparency, to help decrease tensions, to promote regional stability. And we welcome the openness of various parties toward using the incident prevention and response mechanism, the so-called IPRM. And we strongly urged South Ossetia to immediately resume use of the IPRM. Similarly, we have asked Russia to encourage South Ossetia to return to that mechanism.

Now, for several rounds, the Geneva discussions have focused on a non-use of force agreement. And during the June 8th discussions, the most recent ones, we underscored and emphasized the fact that the August 12, 2008 cease fire agreement signed by the Georgian and Russian leadership, mediated by French President Sarkozy, already establishes both sides' commitment to the non-use of force. Full implementation of that agreement by Russia renders an additional non-use of force agreement unnecessary.

So, we are calling on the Russians to enforce the agreement that they signed back in August of 2008. The United States believes that another such agreement is something that may perhaps be positive, but only if it includes the Russian Federation and meets the concerns of all the parties, and includes meaningful implementation measures, and does not politicize the status issue.

And the United States reminded the Russian delegation this past June 8th again that any unilateral steps that Russia has taken, such as its recognition of these regions as independent, do not relieve Russia of the commitments President Medvedev made in the August 12th cease fire agreement.

So, our position concerning the Geneva process is to intensify, as much as we can, our involvement and to keep raising the issues that are important to resolving this matter. We strongly, for example, urged the Abkhaz de facto authorities to participate constructively in the peace process discussions in Geneva. And there is a constant diplomatic effort going on around this.

Now, I cannot predict the time by which this matter will be settled. I am very hopeful that it will be something that can be resolved in the near future. But whether it's in months or years, it's important for Georgia to continue its modernization reform efforts. Because, as I said in the town hall, that sends a very strong message to the Georgian people, first and foremost, and to the people in South Ossetia and Abkhazia, as well as to the Russians and other parties, that Georgia's democracy, Georgia's economy, are still moving forward, that this occupation has not undermined the Georgian Government and the Georgian people's commitment to their own internal efforts to build the strongest possible state for the best future.

PRESIDENT SAAKASHVILI: Yes.

QUESTION: (Inaudible.) Madam Secretary, Mr. President, you have touched on (inaudible) issues. But let me ask you (inaudible) claims that Georgia is in a very special sphere of interest. These are the words of Dmitri Medvedev, as well. And they claim that Georgia will never accept NATO membership, and they will contradict it in (inaudible). And how do you think -- what kind of reaction could have Washington toward this issue? And how could you contribute (inaudible) of Russia about this question?

And secondly, let me ask you as well, in general U.S. is Georgia's major partner and supporter and, in the past years, demonstrated that U.S. Government always give its helpful hand to Georgia. And, Madam Secretary, let me ask you. How could you specify why is Georgia so important for U.S. Government? Thank you.

SECRETARY CLINTON: Well, first, with respect to Russia's claims to any sphere of influence, the United States flatly rejects that. We are living in a time when independent sovereign states have the right to make their own decisions about organizations they wish to join, to make determinations that are in the best interests of their own people and how they see their own future. And it is an important part of the ongoing historical movement that Georgia's independence is part of to reinforce that fundamental human right to one's own destiny.

And, therefore, no country should be told what they can or cannot do by any other country. And that is just the world we live in today. And, therefore, any claim otherwise has to be rejected out of hand. And it should be rejected not only by Georgians and Americans, but by all independent freedom-loving people around the world.

Why does the United States care about Georgia? Because, number one, we respect and honor the sacrifices that the Georgian people have made throughout a very long history of a lot of very difficult challenges. The resilience and resolve of the Georgian people has come through time and time again. The Rose Revolution inspired Americans. It was an uprising that was very much in keeping with our own founding ideals. We just celebrated the 234th anniversary of our declaration of independence. We had to conduct a revolutionary war against then our colonial power. You did it much more peacefully, all things said and done, and we admire that.

But we also believe that you have a right to your own destiny. You have a right to your own freedom. We take seriously our founding ideals. Now, like any country, we sometimes fall short of our own values. But that doesn't mean we care about them any less, that we don't hold them up and stand for them any less. It means that we, too, have work to do.

So, we admire what Georgia has accomplished, and we are Georgia's friend. We are Georgia's partner. We are Georgia's supporter in both word and deed, because we want to see Georgia's independence and territorial integrity, democracy, and prosperity succeed.

QUESTION: Mary Beth Sheridan from the Washington Post. I had a question for both leaders. Georgian officials, on many occasions, have raised their concerns about what they say is great difficulty, or a de facto restriction on buying arms from the United States. So I just wondered if both of you could describe what is the situation now, in terms of selling arms to Georgia.

And a second question for President Saakashvili. What, in your opinion, has been the impact of the reset of relations between the U.S. and Russia? Do you believe that reset compromises Georgian security? Did you get any fresh assurances today? Thank you.

PRESIDENT SAAKASHVILI: Well, on -- related to the first issue, I mean, we have very good security cooperation with the United States. As you know, we are cooperating in Afghanistan. But we also cooperate on the ground here. And that has (inaudible). I myself spoke to General Petraeus, who told me that Georgia soldiers are among the best ones he had on the ground in Iraq and Afghanistan. And not only he told it to me, but he wrote about it to the U.S. President. So we have quite influential allies among the U.S. military, and good example of cooperation.

Now, it's a process. It's a process, and it's a step-by-step approach. And so far, we have been going through that process. It has been productive. We have been happy. And, obviously, the -- it requires time. We are talking about a very comprehensive process. But, you know, there was no -- nothing to complain about, in terms of policy, on the U.S. side. And that I can clearly (inaudible) any speculations over that issue.

Now, with regard to reset, obviously it's a clear issue that, you know, we -- there were questions asked in the beginning, when reset was mentioned. There is no secret about it. Of course some people got worried what it might mean, what it may mean. But what we see now is that -- exactly the right way. What I see the right way is that, you know, it's not just changing relations with Russia at the expense of the others. On the contrary, it's exactly things based on values. It's value-based policy.

And that's why we all love America. That's why my people love America. That's why people in the world -- democratic people all around the world and their leaders love America, because this is the -- almost the only country in the world -- there are many other friends we have -- but where no political -- nobody from political class -- I'm not talking about leadership -- any administration, at least since the time I have been watching politics, have ever compromised basic values in expense of so-called political expedience and pragmatic politics. And for small countries, it's absolutely essential.

When Secretary Clinton mentions occupation words, it resonates with almost 500,000 people that cannot go back to their houses, not because they are taken by somebody else, but because they are held by occupying troops. But, you know, America was the first one to mention this word. And now the others are following. President Obama was the first one to call a spade a spade, basically, to say it was an invasion. Because before, as you remember, the term "disproportionate use of force" was used, as if there is a proportionate use to, you know, occupy other countries' territory. President Obama was the first one to use the term.

And I think the statements coming from Washington, they're better -- the higher (inaudible) agenda gets, the higher the Georgian issue got on the agenda. I was very pleased by that. The visit of Secretary is good testimony to that. And, you know, ultimately, if it leads to more modern, more open Russia, that's only good for all of us around it. We will benefit from more liberal, more open, more modernized Russia, as well as we certainly suffered a lot from Russian (inaudible), that this has all these domestic issues, and that's having (inaudible) trouble with its own people, but also with its own laborers.

And, from that point of view, if ultimate goal is (inaudible), as I believe it is, then we can only benefit from it. And, you know, I congratulate you there very strongly, Secretary. We support the policy. We believe it is already producing the results -- maybe not immediate one for people like, you know, we have my press secretary here, who is (inaudible), he can no longer go back to, like, 80 percent of (inaudible). Most of the refugees from (inaudible). We have minister of economy here, who has (inaudible) together with her family from (inaudible). She was 11 years old, long time ago. And, you know, the point -- these people cannot go back. They would like to. Houses are empty. And only because there are troops they can't go back.

(Inaudible?) Of course it will take time. On the other hand, results (inaudible). Yes, I think the result is bringing at least minimum sense of security and (inaudible) for my country. And that is very essential for us to get time to develop, to do all these construction projects, to grow the economy, to make people better educated, get better chances in life. And, ultimately, basically, solve the other issues. Hopefully much sooner than that, but you know any good direction (inaudible). And I think I see no alternative to that.

SECRETARY CLINTON: I can't add anything to that. That was extremely well said, as the president often is. Thank you.

PRESIDENT SAAKASHVILI: Thank you so much. I am very flattered, that Secretary Clinton would say that. Thank you. Next time you need speaker on other (inaudible) issues, I am there as well.

SECRETARY CLINTON: We're going to go to the bridge. Good, good.