Ramallah -- Secretary of State Madeleine Albright on September 12 discussed a number of issues of concern to young people with Palestinian students at the Friends Boys School in Ramallah.

Asked about the political future of the peace process, Albright replied that "we believe that it is up to the leaders here to determine that, and not for the Americans to impose a plan, because a plan that is workable here is only one that is created by leaders of the region. They are the ones now who have to make the hard decisions to move the process forward so that we feel comfortable."

On terrorism, an issue of particular concern to the students, the Secretary said: "I would hope that there will be a time in the not-too-distant future where both parties here would return to the basis of our approach, which is mutual respect and mutual recognition, and understanding that the two sides here are necessary partners to each other, which means that they are treated with dignity and respect."

She said she had made it very clear to Chairman Arafat that he needs to exert a 100 percent effort to stop terror. "First of all, I believe that the Palestinian people are suffering as much from terror also, because the terrorists are your enemies. The terrorists are making it impossible for this process to move forward. They are terrorists against the Palestinian people as much as they are terrorists against the Israelis....

"I am hoping that both leaders will understand the importance, as I said yesterday, of taking a time-out from the war of words, the excitement, and taking a time-out from actions that do not help to create a climate in which the peace talks can move forward. I am hoping that even after I leave, that my message will sink in."

Secretary Albright encouraged the students to "make your voices heard that you would like to see the peace process moved forward and that the terrorists hurt you."

Following is the transcript of the discussion:

(Begin transcript)

MODERATOR: First of all I would like to welcome the U.S. Secretary of State Madeleine Albright. It is a great honor for us teachers and students to have Mrs. Albright at the Friends Boys School to share with us her ideas and thoughts. I hope you have the time to answer some of the questions they have in mind. Would you like to start by saying a few words to the students before taking questions?

ALBRIGHT: Thank you very much. I am very glad to be here this morning. Yesterday, I was in a Jewish school in Israel. I think it was very evident how much I enjoy being with students. I was a professor before I became a diplomat, so I always enjoy an academic setting.

Let me take a few minutes to say why I am here. There is no doubt as Americans we see the Middle East, and this area specifically, as being vital to our national interests. We believe that it is important for there to be peace and security and justice here for the people of the region, and therefore, by extension, for us the United States, We have spent a great deal of time as a country in doing what we could to promote the Middle East peace process. We have been through good times and bad times. American Secretaries of State have arrived in the area often for two reasons: one, if the situation is going well and it is possible for an American Secretary of State to try to bring some discussions to closure, to get the parties through the last bump; or American Secretaries come when the situation has deteriorated to see whether we can help to get the process back on track. I had hoped that my first trip to the region as Secretary of State, and I've been to the region many times in other guises, as Secretary of State, I had hoped that my first trip would be for the first reason, because the peace talks were going very well, and that I, as the American Secretary of State, could make a difference to this end.

Unfortunately, I have come for the second reason because we are seeing that in this region you are experiencing what we have called a crisis in confidence, where the two parties, rather than having built bonds and trust and confidence since the signing of the Oslo Agreement, are finding more things to argue about than to work in common. So I have come in hopes of trying to [inaudible] there has been an increase in terrorism and we believe, as I am sure many of you believe, that there is no place for terrorism anywhere, ever. But clearly not in the area where it is necessary to build trust and confidence in the peace process. So I have made very clear that it is important for there to be a 100 percent fight against terrorism because it is impossible, I think, for people to negotiate with the threat of terrorism hanging over their heads. It is our hope that through some help of ours that the parties will begin to talk again. I am meeting Chairman Arafat later today. I hope that there will be some results but I am not sure that one trip is going to make that much difference. I would most of all like to answer your questions and hear your views because I fully believe that it is exactly people your age that are the ones to whom leaders ought to listen because what we are doing is trying to prepare for (inaudible). This is going to be your situation. It is up to you to understand policies and to think about the ways you would like to see things done. If I can help in answering your questions, I am very pleased to participate in that.

Q: Madame Secretary, I am 15 years old. I have lived under occupation all my life. Even though I was born in Jerusalem, I can't go there, not just a month ago but three years ago. I am looking towards a better future. Everyone is interested in bringing this peace process back on track and reaching a successful conclusion. Can you please tell me what a successful conclusion politically means?

SECRETARY ALBRIGHT: Well, I think that what has to happen is for there to be final status talks that will allow the leaders to come up with a solution that will seem just to both parties. The problem that we have is that the Oslo Accords were designed to create interim agreements that we had hoped would be a step-by-step process that would allow for greater confidence to develop between parties and allow leaders to, as a result of that confidence, do some bold thinking and use some imagination in order to deal with the final status issues which are clearly the most complicated ones, having to do with borders, and settlements, and the future of Jerusalem. What has happened is that rather than building this sense of confidence, the narrow agreements have in many ways taken away some of the sense of confidence. They have deviated in some way from what we were trying to do. Also having said that, therefore, the concrete results that will really come out of the final status issues seem more and more distant to the people. So there is a lack of sense that something out there is really going to happen. For that reason, we suggested that there be a marrying of the interim agreement period with accelerated final status talks. So that the bonds could be reestablished and the crisis in confidence will be overcome. I have no specific answer for you as to what the political future is because we believe that it is up to the leaders here to determine that, and not for the Americans to impose a plan, because a plan that is workable here is only one that is created by leaders of the region. They are the ones now who have to make the hard decisions to move the process forward so that we feel comfortable.

Q: Good morning, Madame Secretary. According to the Oslo Peace Agreements, the status of Jerusalem is being negotiated in the final stages of the process. In the meantime, Palestinian homes in the city are being destroyed and they are making it nearly impossible for Palestinians to build. Congress has pressed for solutions calling Jerusalem to be the capital of Israel. Why can't Jerusalem be shared, making East Jerusalem the capital of Palestine and West Jerusalem the capital of Israel?

SECRETARY ALBRIGHT: First of all, I think that clearly Jerusalem is the most complicated of the final status issues. I have stated that we believe that taking unilateral action preempts some of the final status issues. It is not helpful in terms of creating a peace process that will bring about bold ideas of how to solve the most difficult problems, which is Jerusalem. When there are calls from a variety of plans to do X, Y or Z in Jerusalem now, it is the position of the United States to always say that Jerusalem is a final status issue to be decided by the parties. Therefore, it is up to you all to decide how you want to see it and not an idea particularly of the United States. That is your idea, maybe some of the leaders will accept that.

Q: We often hear about terrorism as related to bombings such as those in Jerusalem, but we never hear about the terror resulting from the midnight arrests of innocent people, pointed weapons, and humiliating remarks at road blocks, attacks on our religion, destruction of homes and of dreams. How does the U.S. view terror of all forms and their use?

SECRETARY ALBRIGHT: I think that it is very important that people understand that there is no moral equivalence between somebody who straps bombs around themselves and stands in the market and blows himself up and other innocent people along with him. That is an inexcusable, unacceptable, and an evil form of terror that has no equivalence anywhere else. It is true, whether it happens in Jerusalem, or the bombs that destroy buildings as happened in Oklahoma City in the United States two years ago. When innocent people are injured as a result of the actions of a bomb, that is terrorism and unacceptable. The other acts that you speak about, I think, are not helpful in terms of moving the peace process forward. They are a sign of the deterioration of the situation between two peoples who must try to live together in a relatively small space.

But I hope no one makes the mistake to think that one would equate the bombing of innocent people with acts that are not something that I would sanction, but are in no way equivalent to a bomber or the igniting of bombs. I would hope that there will be a time in the not-too-distant future where both parties here would return to the basis of our approach, which is mutual respect and mutual recognition,and understanding that the two sides here are necessary partners to each other, which means that they are treated with dignity and respect. I do think that it is very important that there be no misunderstandings here. There is nothing that is equivalent in any shape or form to a bomber. And building houses, or destroying houses even, or confiscations, while they may not be helpful in terms of the environment that we are all trying toe establish in moving the peace process forward, they in no way resemble, or have the same effect, or are as despicable, or unacceptable, or dastardly, as a bomb that hurts innocent people.

Q: Mrs. Albright is there something wrong please with Palestinians? When your homes are demolished, when your houses are destroyed, everyone is shooting. What can we do as Palestinians to help the United States go forward (inaudible)?

SECRETARY ALBRIGHT: I hope that you all see the fact that I have come here, as many other Secretaries of State have come here, to show the support of the American government and the American people for a peace process that is based on the concept of land for peace and that is based on the concept of mutual recognition, respect, and partnership. I think that it is very difficult for all of you to live in the conditions that you live in. I have come here before as a professor, and I was actually able to get around a little bit more freely than I have now. I saw conditions that I think are horrible and need to be changed. The Palestinian people need to see the benefits of peace and there needs to be more development here. There needs to be mobility for people to move freely and there needs to be proper housing. There needs to be water and there needs to be the ability for all of you to have a normal life. That is why the United States is doing what we can to support the peace process. But as I have said many times, people think that the United States is all powerful, and we do have a great deal of power. We are the most powerful country in the world, there is no question about that. We cannot make decisions for countries or for leaders of those countries or peoples. They have to make them for themselves. The leadership of the Palestinians, the Israeli leadership, the leaders of the other countries in the region, they are the ones that have to make the decisions, and the United States will do what it can to help.

I have tried an analogy, it doesn't always work but let me try it here. One is in a circus, there are trapeze artists and they are on their separate stands. There is a time that they both jump, and with any luck, they catch each other and it is a beautiful acrobatic act. What the United States tries to do is help the jumpers to understand the moment, so that they can all synchronize their jump and catch each other. If for some reason they don't catch each other, we are the safety net. But perhaps the leaders themselves have to be jumpers. We can help with the risks, or take a risk for peace, but there has to be the initial jump. The initial decisions have to be made by the leaders of the people.

Q: Madame Secretary, welcome to Palestine. Yesterday you said that Israeli settlement activity, home demolitions, and land confiscations must stop, but Netanyahu refused. You also said that the interim agreement must be implemented, but the Israeli government also refused. How can you trust the Israeli government in future negotiations and agreements and how can we trust you to safeguard the peace process and our security when you are not putting any pressure on the Israeli government and they are not listening anyway?

SECRETARY ALBRIGHT: I have said many things, and I do not know if they have listened to everything I say, but let me just say this. I have also said that terror must stop. I have made very clear that Chairman Arafat needs to exert a 100 percent effort to stop terror. First of all, I believe that the Palestinian people are suffering as much from terror also, because the terrorists are your enemies. The terrorists are making it impossible for this process to move forward. They are terrorists against the Palestinian people as much as they are terrorists against the Israelis. I think that while I have stated, and the President has stated, that the timing of the settlements is not helpful to the whole process. As I have said there is no equivalence between doing that kind of villainy of the bombers. I am hoping that both leaders will understand the importance, as I said yesterday, of taking a time-out from the war of words, the excitement, and taking a time-out from actions that do not help to create a climate in which the peace talks can move forward. I am hoping that even after I leave, that my message will sink in. I am hoping particularly, that all of you, who are the ones who have to live here in this, will make your voices heard that you would like to see the peace process moved forward and that the terrorists hurt you. As I look around at all of you, I am always reminded of one, my own children, and two, of the students that I have taught, and of the waste that there must be when students such as you who ask such good questions and are interested in your futures see that your futures are limited in some form because the leaders are not making the tough decisions. I hope very much that your voices will be heard and that you will grow up in a region where you do not have to fear for your lives and where you are able to move freely.

(End transcript)