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CNN Live Event/Special

Obama-Cameron News Conference

Aired May 25, 2011 - 07:56   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DAVID CAMERON, BRITISH PRIME MINISTER: Apologies for keeping you waiting.

It's a pleasure to welcome President Obama here today. We've just been having a barbecue in the gardens of number 10 Downing Street with some of our armed service personnel from the United States and from the UK, and it was a great reminder of the incredible debt that we owe all of them and their families for their service, for their sacrifice, for all they do to keep us safe. It was a great event. It was wonderful to have Barack and Michelle there.

It was also probably the first time in history as we stood behind that barbecue that I can say a British prime minister has given an American president a bit of a grilling. So I'm going to hold on to that.

Over the past year, I have got to know the president well. And whether it's in routine situations like sitting around the G-8 table or the slightly less routine of getting a phone call in the middle of the night, I've come to value not just his leadership and courage, but the fact that to all the big international issues of our time, he brings thoughtful consideration and reason.

And I know that today, Mr. President, you'll be thinking of the dreadful tornado in Missouri and all those who've lost livelihoods and lost their lives and loved ones. And our hearts in Britain go out to all those people, too.

Now Barack and I know well the shared histories from our countries. From the beaches of Normandy to the Indian River, our soldiers have fought together. From labs in Cambridge, Massachusetts, to Cambridge, England, our scientists have decoded DNA and cured diseases together. And in millions of interactions every day, including our massive business relationship, our people forge friendships together.

That is what makes this relationship special. But what makes it essential is that it is not just about history or sentiment. It is a living, working partnership. It is essential to our security and it is essential four or prosperity. And I feel every day just how important this partnership is.

The president and I together with my deputy prime minister have just had some excellent discussions. We've been talking today about the two things we care about most -- getting our people jobs and keeping our people safe. Because every night, millions of British and American people take the same worries to bed with them. They're asking if they can find a good job, if they are going to get a paycheck next month, and if there will be work for their children when they grow up. The stark truth of the world today is that no country is owed a living. We've got to pay our way and we've got to earn our way and that is what the president and I are determined to do.

Barack and I did not come into politics to cut public spending, but neither did we seek office to see our great economies decline or to land our children with unsustainable debts. And that is why in the second half of this decade we're making sure that debt ratios will be falling on both sides of the Atlantic.

At the same time, we are investing in our roads and railways, in science and innovation, and above all in our young people. And down the line, the success of all this won't be measured in export or trade flows, it will be in the feelings of the factory worker whether they're in Phoenix, or the shopkeeper in Liverpool, or the engineer in Ohio. The people who know if they work hard then prosperity will be there for them and the promise of a better life there for their children.

As well as the economy, The press and I had some very good discussions on security. Now, Americans and Brits do not need to explain terrorism to one another. Both our people have suffered at its hands and indeed they have died together.

My wife, Samantha, was in Manhattan on 9/11. And I'll never forget the five hours of trying to get ahold of her and she'll never forget the New Yorkers that she met that day or the sense of solidarity that she felt that day and that we have felt ever since that day.

And, today, as we come up to its tenth anniversary, we should remember the spirit of that city and the sympathy we felt with those who lost their loved ones. Now, there are those that say that this terrorist threat is beyond our control. And we passionately believe that is wrong. We can defeat al Qaeda and the events of recent months give us an opportunity to turn the tide on their terror once and for all.

I believe there are three actions we must take. First, we must continue to destroy that terrorist network. I congratulate the president on his operation against bin Laden. This was not just a victory for justice, but a strike at the heart of international terrorism. In this vital effort, we must continue to work with Pakistan.

People are asking about our relationship. So we need to be clear. Pakistan has suffered more from terrorism than any country in the world. Their enemy is our enemy. So far from walking away, we've got to work even more closely with them.

At the same time, this is a vital year in Afghanistan. British and American forces are fighting side by side in Helmand right at the heart of this operation. We have broken the momentum of insurgency and even in the Taliban's heartland, in Kandahar and central Helmand, they are on the back foot. Now is the moment to step up our efforts to reach a political settlement.

The Taliban must make a decisive split from al Qaeda, give up violence and join a political process that will bring lasting piece to that country. We are agreed to give this the highest priority in the months ahead.

Second, we must reach a conclusion to the Arab/Israel peace process. Again, I congratulated the president on his recent speech to the Middle East, which was bold. It was visionary and it set out what is needed in the clearest possible terms, an end to terror against Israelis and the restoration of dignity to the Palestinians. Two states living side by side and in peace.

Yes, the road has been and will be long and arduous, but the prize is clear. Conclude the peace process and you don't just bring security to the region, you deny extremists of one of their most profound and endearing recruiting sergeants, weakening their calling and crippling their cause. That is why, whatever the difficulties, we must continue to press for a solution.

Our third action must be to help elevate the changes in North Africa and the Arab world from a moment in history to a turning point in history. We have seen extraordinary things -- protesters braving bullets, bloggers toppling dictators, people taking to the streets and making their own history. If global politics is about spreading peace and prosperity, then this is a once in a generation moment to grab ahold of.

It is not a time for us to shrink back and think about our own issues and interests. This is our issue and this is massively in our interests. Those people in Tahrir Square and Tripoli just want what we have: a job and a voice. We all share in their success or failure.

If they succeed, there is new hope for those living there, and there is hope of a better and safer world for all of us. But if they fail, if that hunger is denied, then some young people in that region will continue to listen to the poisonous narrative of extremism.

So, the president and I are agreed, we will stand with those who work for freedom. This is the message we'll take to the G-8 tomorrow when we push for a major program of economic and political support for those countries seeking reform.

And this is why we mobilize the international community to protect the Libyan people from Colonel Gadhafi's regime, why we will continue to enforce U.N. resolutions with our allies and why we restate our position much more. It is impossible to imagine a future for Libya with Gadhafi still in power. He must go. In all of these actions, we must be clear about our ambitions.

Barack and I came of age in the 1980s and '90s. We saw the end of the Cold War and the victory over communism. We saw the invasion of Kuwait by Saddam Hussein and the world coming together to liberate that country. Throughout it all, we saw presidents and prime ministers standing together for freedom.

Today, we feel just as passionately about extending freedom as those who came before us but we also know that idealism without realism does no good for anyone. We have learned the lessons of history. Democracy is built from the ground up. You've got to work with the grain of other cultures and not against them.

Real change takes time. It is because of this, we share the view that our partnership will not just continue but it will get stronger. And this is a partnership that goes beyond foreign affairs.

At home, we have similar goals, to bring more responsibility to our societies and to bring transparency and accountability to our governments. In all these ambitions, our countries will continue to learn from each other and work with each other.

As ever, it has been a pleasure to talk to the president and an honor to have him with us today -- Mr. President.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you, David.

Thank you, Mr. Prime Minister. I am very pleased to be back in the United Kingdom. I note that you have arranged for typical London weather these pass the two days. And I'm very grateful for that.

I want to thank her majesty, the queen, and the British people, for the extraordinary welcome that has been extended to me and Michelle. It's a shining example of the genuine warmth and affection that our two nations feel towards one another.

Since David took office last spring, I believe we have now met or spoken at least two dozen times. We may be leaders from different political traditions, but on a whole host of issues, we see eye to eye. We even took the same side in an epic match of doubles table tennis against some local students. And we won't rehash the results of that.

The relationship between our two countries is one that's not just based on warm sentiment or common history, although those things exist. It's built on shared ideals and shared values. As David said, it is a special relationship and an essential relationship. I believe that it is stronger than it has ever been and I'm committed to making sure that it stays that way.

The successful meetings we have had and the joint initiatives we are announcing today represent the depths and breadth of our relationship. We discussed our efforts to strengthen the global recovery and create good jobs for our people. The investment relationship between the United States and t the United Kingdom is the largest in the world, one that accounts for nearly 1 million jobs in each of our economies.

We believe we can make that relationship even stronger with deeper cooperation in areas critical to our future prosperity, like higher education and science and innovation, areas critical to our national security like cybercrime, and areas vital to the stability of the world, including international development.

During our discussions today, we reviewed our progress in Afghanistan where our brave servicemen and women have fought side by side to break the Taliban's momentum and where we are preparing to turn a corner.

We reaffirmed the importance of beginning the transition to Afghan lead for security this year and completing that transition by 2014. We discussed the opportunity that exists for promoting reconciliation in a political settlement which must be an Afghan-led process. President Karzai has made it clear that he will talk to anyone willing to end the violence, split with al Qaeda and accept the Afghan constitution. And we welcome the positive cooperation between Afghanistan and Pakistan on that front.

At the same time, the prime minister and I both agree that our nations have a long-term interest in ensuring that Afghanistan never again becomes the launching pad for attacks against our people. So, alongside our NATO allies and partners, we are committed to a strong, enduring partnership with the people of Afghanistan.

As historic change unfolds across the Middle East and North Africa, we agree that the pursuit of self-determination must be driven by the peoples of the region and not imposed from the outside. But we are both committed to doing everything we can to support peoples who reach for democracy and leaders who implement democratic reform. Tomorrow, we'll discuss with our G-8 partners how those of us in the community can best support nations that make the reforms necessary to build the framework for democracy, freedom and prosperity for their people.

At the same time, we will continue to strongly oppose the use of violence against protesters and any efforts to silence those who yearn for freedom and dignity and basic human rights. And that's one of the reasons that we are working together in Libya, alongside our NATO allies and partners, to protect the Libyan people. And we will continue those operations until Gadhafi's attacks on civilians cease. Time is working against Gadhafi and he must step down from power and leave Libya to the Libyan people.

We also discussed the situation in Syria where the Syrian people have shown great courage in their demands for a democratic transition. The United States welcomes the E.U.'s decision to impose sanctions on President Assad and we are increasing pressure on him and his regime in order to end his policy of repression and begin the change that people seek.

We discussed Yemen, where the Yemeni people call for greater opportunity and prosperity, and a nation that is more unified and more secure. And we expressed our joint concern of the deteriorating situation on the ground there.

We applauded the leadership of the Gulf Cooperation Council in seeking an orderly and peaceful resolution of the crisis. And we call on President Saleh to move immediately on his commission to transfer power.

And at a time when so many in the region are casting off the burdens of the past, we agree that the push for a lasting piece that ends the Israeli-Palestinian conflict and resolves all claims is more urgent than ever. I appreciate the prime minister's support for the principles that I laid out last week on borders and security, which can provide a sound basis from which the two sides can negotiate.

As increasing tensions in Abyei region threaten to derail Sudan's comprehensive peace agreement, we are working closely together to encourage the parties to recommit to a peaceful resolution to the crisis and calling on the rapid reinforcement of the U.N.'s peace- keeping presence in the region.

We also reviewed our cooperation when it comes to countering terrorist threats, preventing the proliferation of weapons of mass destruction and the means of their delivery to states like Iran, and our unrelenting efforts to keep our people safe.

And, finally, we launched a joint initiative to exchange the best ideas and practices when it comes to supporting our veterans and our military families.

Today, before we came here, Michelle and I joined David and Samantha for an outstanding barbecue at Number 10 for active duty members of our militaries, along with their spouses who make extraordinary sacrifices as well. It was a wonderful event, a moving reminder of the long line of American and British service members who have made heroic sacrifices in the joint defense of our shared values that our people hold so dear.

So, Mr. Prime Minister, thank you, not only for the barbecue, but for the opportunity to spend this very productive time at Number 10 with you and your team. I enjoyed my visits here as always. I have confidence that our special relationship will continue to grow even stronger in the months and years ahead. Thank you very much.

QUESTION: Thank you very much.

Nick Robinson from the BBC.

QUESTION: Thank you very much, indeed.

Prime Minister, can you confirm that you plan to escalate the war in Libya by sending ground attack helicopters?

And, Mr. President, can you confirm the United States will sit that particular mission out?

A general question for you, if I could, you have talked about an old war in Afghanistan and a new one in Libya. Is your partnership really that different than the one between Bush and Blair?

CAMERON: Well, thank you. Lots of questions in there.

First of all, the president and I agree that we should be turning up the heat in Libya. I believe the pressure is on that regime.

You see it in the fact that the rebels have successfully liberated much of Misrata. You see it in the success in other parts of the country. You see it in the strength of the coalition. You see it in the growth of the National Transitional Council.

I believe we should be turning up that pressure. And on Britain's part, we will be looking at all the options of turning up that pressure, obviously within the terms of U.N. Resolution 1973, because we believe we need to keep enforcing that resolution, protecting civilians, pressurizing that regime so that the Libyan people have a chance to decide their own future. And within that, those are the options we'll look at.

You asked the questions about this relationship and past relationships. I think every relationship between a president and a prime minister is different. I would say both of us strongly believe in the special relationship. We both called it an essential relationship.

But we believe you have -- as I said in my speech, we have to learn the lessons of history, about how best we promote the values that we share. And that means, yes, going with the grain of other cultures. It means, yes, having a patient understanding that building democracy takes time and you have to work on the building blocks of democracy and not believe this all can be done in an instant.

But I believe in that partnership, we're extremely strong together in wanting to see the same outcomes, whether that's in Afghanistan where we want to see a peaceful and stable Afghanistan that no longer requires the presence of foreign troops to keep it free from terrorism, and we want to see a Libya where people have the chance to decide their own future.

We are doing things in a different way. We have ruled out occupying forces, invading armies. We are doing what we can to enforce resolution 1973 and allowing the Libyan people to choose their own future, and we're very committed to doing that work together.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Well, first of all, I do think that we've made enormous progress in Libya. We have saved lives as a consequence of our concerted actions. I think it is important to note that we did so under a U.N. mandate and as part of a broad-based international coalition that includes Arab countries. And I absolutely agree that given the progress that has been made over the last several weeks, that Gadhafi and his regime need to understand that there will not be a let-up in the pressure that we are applying.

The United Kingdom, the United States and our other partners are putting a wide range of resources consistent with the U.N. mandate in order to achieve that pressure. And I think we will ultimately be successful. The goal is to make sure that the Libyan people can make a determination about how they want to proceed, and that they'll be finally free of 40 years of tyranny, and they can start creating the institutions required for self-determination.

So, in terms of historical analogies, I just want to underscore, this is not the United Kingdom and the United States alone. We have a broad range of partners under an international mandate designed to save lives and ensure that we did not have this sort of massacre that would lead us then to look back and say to ourselves, why did we stand by and do nothing?

With respect to Afghanistan, similarly, we have a broad-based international mandate and a broad-based international coalition designed to make sure that Afghanistan does not serve as a base for attacks against our people. We have discussed consistent with what we said in Lisbon during our NATO summit that this will be a year of transition, because of the work that we've done and the enormous sacrifices that both our militaries have given. We are in a position now to transition, to start transitioning to an Afghan-led security process.

And at the same time, we're going to be engaging in the sort of diplomatic work that is required for an ultimate political solution to the problems there. I am confident that we can achieve it. I think that there is no doubt that the United States and the United Kingdom have a unique relationship. And that is going to be consistent regardless of who the president and prime minister is, and it is going to be consistent regardless of what parties we come from.

There is so much that binds us together. That it is not surprising that we are typically on the international stage going to be working together as opposed to cross purposes, but, as David mentioned, I think that the one thing that we have learned is that even as we promote the values and ideals that we care about, even as we make sure that our security interests are met, that we are using military power in a strategic and careful way.

That we are making sure that as we promote Democracy and human rights, that we understand the limits of what the military alone can achieve. And that we're remindful that ultimately these regions are going to be -- that the fate of these regions are going to be determined by the people there themselves, and that we are going to have to work in partnership with them. And that, I think, is the best example of alliance leadership, and it's something that I'm very proud to be a part of. Julie Pace.

QUESTION: Thank you, Mr. President. You've said that Moammar Gadhafi's exit from Libya is inevitable and that the U.S. will continue with the campaign until his attacks stop. Does that also mean that you will commit the U.S. to that campaign until Gadhafi is removed from power and would you be willing to commit additional U.S. resources if that meant speeding up Gadhafi's exit.

And Prime Minister Cameron, do you believe that the U.S. and other NATO allies should increase their role in the Libya campaign as other British lawmaker have suggested? Thank you.

OBAMA: I have said from the outset that our goal, the reason that we intervened in Libya was to protect people on the ground and to give the Libyan people the space that they needed in order to bring about a change towards democracy. And I also was very clear in terms of how we were going to participate.

We moved very heavily on the front end, disabling their air defense systems, carrying the lion's share of the burden when it came to setting the stage for NATO operations, and then, once the transfer took place to NATO command and control. That at that point, our primary role would be a whole range of support that utilized America's unique capabilities.

That's what we're doing. I also ruled out us putting any ground forces in Libya. We have proceeded consistent with that. There are times wherefore example with our predator capabilities, we have a unique capacity that we've brought to bear, and we will continue to do that. The prime minister and I consistently discuss on regular basis what can we all do to make sure that pressure continues to apply.

I do think that it is going to be difficult to meet the U.N. mandate of security for the Libyan people as long as Gadhafi and his regime are still attacking them. And so, we are strongly committed to seeing the job through making sure that, at minimum, Gadhafi doesn't have the capacity to send in a bunch of thugs to murder innocent civilians and to threaten them.

I believe that we have built enough momentum that as long as we sustain the course that we're on, that he is ultimately going to step down, and we will continue to work with our partners to achieve that. So, we have not put forward any artificial timeline in terms of how long this will take. My belief is that the more resolute that we are now, the more effective the coalition is in rallying all the resources that are available to it that we're going to be able to achieve our mission in a timely fashion.

One last point, and this speaks to the issue of whether there are other additional U.S. capabilities that could be brought to bear. David and I both agree that we cannot put boots on the ground in Libya. Once you rule out ground forces, then, there are going to be some inherent limitations to our air strike operations. It means that the opposition on the ground in Libya is going to have to carry out its responsibilities.

And we're going to have to do effective coordination. We are doing that with the opposition on the ground. But, I think that there may be a false perception that there are a whole bunch of secret super effective air assets that are in a warehouse somewhere that could just be pulled out and that would somehow immediately solve the situation in Libya. That's not the case.

The enormous sacrifices that are being made by the British, by the French, by ourselves, by the Danes, and others, that we are bringing to bear an array of air power that has made a huge difference, but ultimately, this is going to be a slow, steady process in which we're able to wear down the regime forces and change the political calculations of the Gadhafi regime to the point where they finally realize that they're not going to control this country.

The Libyan people are going to control this country. And as long as we remain resolute, I think we be all achieved that mission, but there's not a whole host of new and different assets that somehow could be applied, partly because we've been extraordinarily successful in avoiding significant civilian casualties, and that's been part of our goal. That's been part of our mission is making sure that we are targeting regime forces in a way that does not result in enormous collateral damage.

And that means we may have to, sometimes, be more patient than people would like, but ultimately, I think, it promises greater success, and it sustains our coalition and support for not just here but in the Arab world as well.

CAMERON: Thank you. I so agree that the two key things here are patience and persistence. That is what the alliance is demonstrating. It needs to go on demonstrating. I just make two points. First of all, I think the president and I completely agree on this point. And of course, the U.N. resolution is not about regime change, the U.N. resolution is about protecting civilians from attack and taking all necessary measures to do so.

With that said, most political leaders including the two here have said it's hard to see how you implement U.N. Resolution 1973 with Gadhafi still in control of his country, which is why we've been so clear about Gadhafi needing to go and needing to leave Libya. In terms of the U.S. role, I would make this point, which I'm not sure is widely understood in Britain or in Europe is already a huge number of the sources and the support and the air assets that are actually bringing the pressure to bear are U.S. assets.

There is this enormous effort at the beginning as the president said but also a sustained amount of assets that have been used. And as the president said, there are also the unique assets and capabilities that the U.S. has that others don't have that are so vital. And, as you said, we all have to ask, what is it that we can all do to make sure the pressure is really brought to bear?

That is what the British are doing, the French are doing, the Americans are doing, and I know we'll discuss this in the margins of the G-8, but I just make this point as well. As well as the military pressure. Don't underestimate the pressure of building up the opposition, the contacts we have with the national transitional council, the fact that they are opening offices and building support and strength from the allies.

Don't underestimate the extent to which when we're cutting off oil products to the regime, because they're using them in their tanks and their other military equipment. And also, the other steps that I know Americans and others are taking to try and release Libyan assets back into the hands of the National Transitional Council and recognizing them as the right (INAUDIBLE) for us to speak to.

So, in all those ways, we can keep this pressure up over the coming period while showing patience and persistence at the same time. Tom Bradby from ITV.

QUESTION: Mr. President, you've talked about the need for robust action on your country's deficit and debt positions. Do you agree with the prime minister's supporters that he led the way on the issue or do you feel that, in fact, he has traveled too far and too fast?

And can I just ask you both as a side bar, this time last year, we talked about the case of computer hacker, Gary McKinnon on which the prime minister expressed very clear views. You said you would work together to find a solution. So, have you found one?

OBAMA: On your second question, Mr. McKinnon, we have proceed through all the processes required under our extradition agreements. It is now in the hands of the British legal system. We have confidence in the British legal system coming to a just conclusion. And, so, we await resolution, and we'll be respectful of that process.

With respect to how we deal with debt and deficits, I said two years ago, the first time I came here in April of 2009, the first G-20 summit that I attended that each country is different. And each country is going to have to make a range of decisions about how to, at that time, dig our way out of the worst recession that we had experienced since the 1930s.

At the same time, that we put our countries on a path of sustainable growth that ultimately results in jobs and prosperity for our people and a growing middle class across the board. And, we've succeeded in the first part, which is to yank the world economy out of recession, and that was in large part due to concerted action between the United States, the United Kingdom and other countries.

Now, we've got that other challenge, which is how do we sustain growth in a way that's responsible and responsive to the needs of our people. That requires us to continue to make investments in education, science, technology, infrastructure, things that help our economies grow. But it also means governments that live within their means. And, you know, obviously, the nature and role of the public sector in the United Kingdom is different than it has been in the United States.

The pressures that each country are under from world capital markets are different. The nature of the debt and deficits are different, and as a consequence, the sequencing or pace may end up being different. But the one thing that I'm absolutely clear about is David and I want to arrive at the same point, a point in which we're making sure that our governments are doing what they need to do to ensure broad-based prosperity, but doing so in a responsible way that doesn't mortgage our futures and leave a mountain of debt to future generations.

And the other point I think David and I would agree on is that this is going to be a constant process, trying some things, making adjustments. There are going to be opportunities for us to make investments. There are going to be other areas where we think those were good ideas at the time, programs that were started with the best of intentions, and it turns out they're not working as well as they should. If a program is not working well, we should get rid of it and put that money into programs that are working well.

It means that we've got to make sure that we take a balanced approach, and that there's a mix of cuts, but also thinking about, how do we generate revenues so that there's a match between money going out and money coming in? And, you know, each country is going to have to go through what is a difficult and painful process.

What I'm confident about is that we're going to be able to come out of this stronger than we were before. And I think that both the people of the United Kingdom and the people of the United States want to see a government that's reflective of their values. The fact that they, you know, take their responsibilities seriously, they pay their bills, they make sure that their families are cared for, they make sacrifices where necessary in order to ensure that their children and their grandchildren are succeeding, and they want those same values reflected in their government. And I think both our countries are going to be able to achieve that.

CAMERON: Thank you.

First of all, in the case of Gary McKinnon, I mean, I understand the widespread concern about this case, and it's not so much about the alleged offense, which everyone knows is a very serious offense, it's about the issue of the individual and the way they're treated and the operation of the legal system. And as the president said, making sure that legal system operates properly and carefully. The case is currently in front of the home secretary, who has to consider reports about Gary's health and his well-being, and it's right that she does that in a proper and effectively quasi-judicial way.

I totally understand the anguish of his mother and his family about this issue. We must follow the proper processes and make sure this case is dealt with in the proper way. And I'm sure that that is the case.

On the issue of deficit reduction, I mean, I remember when we also spoke about this at the G-20, but even before that, when you first came here where you were running as candidate.

And I completely agree with Barack that each country is different and has different circumstances. I mean, Britain does not have a reserve currency, we're not in the same position as the U.S. with the dollar. And I think it was necessary for us to set out on the path of deficit reduction without delay after the election.

And I would argue the proof of that for the U.K. has been what has happened in happened in capital markets. And as the president just said, capital markets treat different countries differently.

Well, in the European context, what you've seen since the election is actually market interest rates in the U.K., bond yields, effectively, come down, whereas if you look at what's happened in Greece or in Portugal or other European countries, you've often seen those bond rates increase. That, in my view, is the risk we would have run if we had not set out on the path of deficit reduction.

But each country is different. But when I look across now and see what the U.S. and the U.K. are currently contemplating for the future, it's actually a relatively similar program in terms of trying to get on top of our deficits and make sure the debt is falling as a share of GDP. Because as the president said, in the end, we share a very similar set of values about not wanting to load responsibility for these debts on our children, and not wanting to shirk our own responsibilities for straightening out our own public finances.

So, as he said, we may take slightly different paths, but we want to end up in the same place. It's an extremely difficult thing to have to do, dealing with your public finances, getting on top of your deficit. But it's absolutely essential.

And we've talked a lot today about national security. In the end, there's no national security unless you have economic security, and that's an argument that we have to make and win every day here in the United Kingdom.

OBAMA: Christie Parson (ph), last question.

QUESTION: Thank you, Mr. President.

Yesterday, in his speech before Congress, the Israeli prime minister referred to the Palestinian right of return as fantasy. And I wonder if that's a sentiment you agree with in any way. And also, if you could outline for us a little bit your views on that issue, as well as the future of Jerusalem.

And Mr. Prime Minister, if I may, you said at the top of this press conference that you consider the president's principles outlined last week to be bold and visionary and, in fact, what needs to be done. And I wonder if that means it makes you less open to the Palestinian campaign for recognition of statehood before the U.N. this fall.

Thank you.

OBAMA: My goal, as I said out in the speech I gave last week, is a Jewish state of Israel that is safe and secure and recognized by its neighbors, and a sovereign state of Palestine in which the Palestinian people are able to determine their own fate and their own future. I am confident that can be achieved. It is going to require wrenching compromise by both sides.

Over the last decade, when negotiators have talked about how to achieve that outcome -- now, there have been typically four issues that have been raised. One is the issue of what would the territorial boundaries of a new Palestinian state look like? Number two, how could Israel feel confident that its security needs were being met? Number three, how would the issue of Palestinian refugees be resolved? And number four, the issue of Jerusalem.

The last two questions are extraordinarily emotional. They go deep into how both the Palestinians and the Jewish people think about their own identities.

Ultimately, they are going to be resolved by the two parties. I believe that those two issues can be resolved if there's the prospect and the promise that we can actually get to a Palestinian state and a secure Jewish state of Israel.

And what my speech did was to say let's begin the work with the very hard-nose but transparent and less -- perhaps less emotional issues of, what would the territorial boundaries look like and what would Israeli security requirements entail? And I believe that if the Palestinians and the Israelis begin talking about those two issues, and get some resolution, they can start seeing on the horizon the possibility of a peace deal.

They will then be in a position to have a -- what will be a very difficult conversation about refugees and about Jerusalem. That's not something that any party from the outside is going to be able to impose on them. But what I am absolutely certain of is that if they're not talking, we're not going to make any progress, and neither the Israeli people nor the Palestinian people will be well served.

Let me just make one more comment about the prospects for a serious peace negotiation.

The Israelis are properly concerned about the agreement that's been made between Fatah and Hamas. Hamas has not renounced violence. Hamas is an organization that has thus far rejected the recognition of Israel as a legitimate state.

It is very difficult for Israelis to sit across the table and negotiate with a party that is denying your right to exist and has not renounced the right to send missiles and rockets into your territory. So, as much as it's important for the United States, as Israel's closest friend and partner, to remind them of the urgency of achieving peace, I don't want the Palestinians to forget that they have obligations as well. And they are going to have to resolve in a credible way the meaning of this agreement between Fatah and Hamas if we're going to have any prospect for peace moving forward.

As for the United Nations, I've already said, I said in the speech last week, and I will repeat, the United Nations can achieve a lot of important work. What the United Nations is not going to be able to do is to deliver a Palestinian state.

The only way that we're going to see a Palestinian state if the Israelis and Palestinians agree on a just peace, and so I strongly believe that for the Palestinians to take the United Nations route, rather than the path of sitting down and talking with the Israelis, is a mistake, that it does not serve the interests of the Palestinian people. It will not achieve their stated goal of achieving a Palestinian state. And the United States will continue to make that argument both in the United Nations and in our various meetings around the world.

QUESTION: (OFF-MIKE)

OBAMA: I believe that Hamas, in its own description of its agenda, has not renounced violence and has not recognized the state of Israel. And until they do, it is very difficult to expect Israelis to have a serious conversation, because ultimately they have to have confidence that a Palestinian state is one that is going to stick to its -- to whatever bargain is struck, that if they make territorial compromises, if they arrive at a peace deal, that in fact, that will mean the safety and security of the Jewish people and of Israel.

And Hamas has not shown any willingness to make the kinds of concessions that Fatah has. And, you know, it's going to be very difficult for us to get a Palestinian partner on the other side of the table that is not observing the basic core principles that both David and I believe in, the need to renounce violence, recognize the state of Israel, abide by previous agreements. That is, I think, going to be a critical aspects of us being able to jumpstart this process once again.

CAMERON: Thank you.

And I described the president's speech as bold and visionary, because I think it did an absolutely vital thing, which was to talk about '67 borders with land swaps. So, as the president said, if you think about what both sides absolutely need to know to start this process, those two things are in place.

First, that the Israelis need to know that America and allies like Britain will always stand up for Israel's right to exist, right to defend herself, right to secure borders. That is absolutely vital, that the Israelis know that their security is absolutely key to us. They need to know that.

But the second thing that needs to be done is the Palestinians need to know that we understand their need for dignity and for a Palestinian state using the '67 borders as land swaps as the start point. That is I think what is so key to the speech that's been made. So neither side now has, I believe, the excuse to stand aside from talks.

On the specific issue of U.N. recognition, the president is entirely right that, in the end, the Palestinian state will only come about if the Palestinians and the Israelis can agree to it coming about. That is the vital process that has to take place.

As for Britain, we don't believe the time for making a decision about the U.N. resolution -- there isn't even one there at the moment -- is right yet. We want to discuss this within the European Union and try and maximize the leverage and pressure that the European Union can bring, frankly, on both sides to get this vital process moving.

Both of us in recent days have been to the Republic of Ireland. I went on part of the queen's historic trip, and I know Barack has just returned from a very successful trip. And when you look at what happened to happen in Northern Ireland in order for peace to come about, is there has to be some recognition and understanding on each side of the other side.

And that is what I think is so crucial in what the president is saying about Hamas and Palestinian unity, which should, in some ways, be a welcomed development if the Palestinians can have one group of people, but not unless those group of people are prepared to accept some of what the people are going to negotiate with desperately need. And that, in the end, is why the peace process in Northern Ireland was successful, because both sides had some understanding of what the other side needed for some dignity and for some peace.

And that is what we badly need right now in the Middle East. And I think the president's speech has been a good step forward in really helping to make that happen.

Thank you.

OBAMA: Let me just pick up on what David said about Ireland.

It was inspiring to see, after hundreds of years of conflict, people so rapidly reorienting how they thought about themselves, how they thought about those who they thought once were enemies. Her Majesty's visit had a profound effect on the entire country, and so it was an enormous source of hope.

And I think it's a reminder that as tough as these things are, if you stick to it, if people of goodwill remain engaged, that ultimately, even the worst of conflicts can be resolved. But it is going to take time. And I remain optimistic, but not naively so. But this is going to be hard work, and each side is going to have to look inward to determine what is in their long-term interests, and not just what are in their short-term tactical interests, which tends to perpetuate a conflict, as opposed to solve it.

And finally, let me also, David, just very briefly, thank you for expressing your condolences and concern about the people in Missouri. We have been battered by some storms, not just this week, but over the last several months, the largest death toll and devastation that we've ever seen from tornadoes in the United States of America. Knowing that we've got friends here in the United Kingdom who care deeply and who offer their thoughts and prayers makes all the difference in the world.

So thank you very much for that.

CAMERON: Thank you. And the Guinness wasn't bad in Ireland either.

OBAMA: It was. It was very good.

CAMERON: Thank you.

OBAMA: Thank you. All right.