PRESIDENT OBAMA: Good evening, everybody. Buona sera. I want to welcome Prime Minister Berlusconi here. He has proved to be a great friend of the United States. And he and I got to know each other at the G20 summit. We are now in the process of planning the G8 summit that Italy will be hosting. We emphasized the strong, historic ties between the United States and Italy. Our bilateral relationship has been marked by cooperation across the board. And I am extremely grateful for his friendship.

Just a couple of things that we specifically discussed. First of all, I thanked the Prime Minister for his support of our policy of closing Guantanamo. This is not just talk. Italy has agreed to accept three specific detainees, and has also been part of the leadership in Europe that today announced a framework in which European nations can accept detainees. And that was something that I was very appreciative of. It will give us an opportunity to create a lasting and durable international legal framework for dealing with terrorism that I think is very important on both sides of the Atlantic.

We discussed Afghanistan and Pakistan, where Italy has been a critical part of the coalition that is trying to assist Afghanistan in stabilizing itself and ensuring that it's not a safe haven for terrorism. We had an extensive discussion about my interest in pursuing nonproliferation as an important agenda for all people. And given that I'll be visiting Russia before I visit Italy for the G8, Prime Minister Berlusconi, who has strong relationships with the Russians, was able to offer some insight in terms of how to approach reductions in nuclear arsenals. And that hopefully is going to be a topic at the G8 summit, as well.

And in addition to discussing the general situation in the world economy, which obviously will be a central topic of the G8, we also discussed specifically the issue of food security and how G8 nations can assist people who are in most desperate poverty to ensure that they're not slipping into hunger and further poverty. And that is going to be a major topic of the G8 summit. And so I'm very appreciative of the leadership that Prime Minister Berlusconi has shown on that front.

So overall I am very grateful to Prime Minister Berlusconi's leadership, his consistent friendship towards the United States. We have some of the strongest bilateral relations in the world. I am confident that that will continue as long as both of us are occupying our positions.

And so thank you very much for taking the time to visit.

PRIME MINISTER BERLUSCONI: (As translated.) First of all, I would like to thank President Obama for his welcome and for the possibility offered us to provide our perspective, our opinions on many of the most difficult and hardest issues at the international level. And we've discussed, as he already briefed you, many of the issues and the topics, and we went through in a detailed manner the three days of the G8 summit. We want this G8 to reach concrete solutions. And we want to reach concrete solutions on many extremely important issues.

Clearly, the first issue is the world economy, the economic crisis and how to get out of this crisis. And we also discussed the work that our ministers of economy are carrying out right now to try and develop a body of principles and to prevent similar situations from happening, similar situations to the one we are experiencing right now.

We both agreed on the fact that the G8 will certainly not be able to produce this body of rules, but this is going to be just one of the steps leading to that drafting of rules. There will be then the G20 summit in Pittsburgh, which will work on it, but the hope is to finally reach a body of rules which can be shared by everybody which -- which are not going to affect or hinder the free expansion of the economy and trade.

And we discussed two important issues. One of them, which will be discussed in L'Aquila as well, is food security, as President Obama has already said. We hope that the countries there will make concrete efforts and concrete proposals. The United States has already promised to increase the aid to other countries and they're going to make in the next three years huge amounts of money available. We try and will push the other countries in the G8, trying to persuade them to do the same.

And another important issue is that of climate change. And another important achievement we are aiming at is to reduce CO2 emissions -- something, however, which has to be contributed to by all countries and not only a limited number of them. And since the Doha Round has reached a stop, we hope that by inviting Lamy, who is the director of the WTO, to attend the G8 summit, that we can try and give another push to the Doha Round, hoping to achieve positive results.

Probably what I forgot to mention up to now is that the meeting in L'Aquila is not going to be confined to the G8 countries. The next day, the second day, will be G8-plus-6. The major economies of the world will be there; India, China, South Africa, Mexico, Brazil, and Egypt will attend the second day of meetings. There will be the major economies forum with the participation of South Korea, Indonesia, and Australia, and then there is another meeting which will be attended also by the Netherlands, Spain, and Denmark -- and we are going to have before all of these meetings together.

The dinner will be attended also by the representatives of the main international organizations. And the third day, we are going to have the President of the African Union, the representatives of the main African organizations, together with the representatives of some of the main African countries. We are going to discuss the development of this continent and the issue of hunger in that area.

And I can't but thank President Obama and express my warmest felt appreciation to him for -- and this position is coming from a person that's been long enough in international politics to chair for the third time the G8 summit; the first one was in the 1994; the second one in 2001; and now the third one -- I want to express my appreciation for his deep knowledge and precision and accuracy with which he discusses all of the issues.

And the positions that he expresses are not only innovative positions looking at a different future, but they're always very concrete and absolutely based on common sense. And it is extremely comforting and a pleasure to see that the destiny of the biggest democracy in the world is in very good hands.

PRESIDENT OBAMA: I hope my staff all caught that. (Laughter.) Gibbs, write that down. (Laughter.)

Let me call on a couple people. Steve Thomma, McClatchy. There you are.

Q Mr. President, on Iran, does the disputed election results affect -- there's been violence in the street -- in any way change your willingness to meet with Mr. Ahmadinejad without preconditions? And also, do you have anything to say, any message to send to people who are on the streets protesting, who believe their votes were stolen and who are being attacked violently?

PRESIDENT OBAMA: Obviously all of us have been watching the news from Iran. And I want to start off by being very clear that it is up to Iranians to make decisions about who Iran's leaders will be; that we respect Iranian sovereignty and want to avoid the United States being the issue inside of Iran, which sometimes the United States can be a handy political football -- or discussions with the United States.

Having said all that, I am deeply troubled by the violence that I've been seeing on television. I think that the democratic process -- free speech, the ability of people to peacefully dissent -- all those are universal values and need to be respected. And whenever I see violence perpetrated on people who are peacefully dissenting, and whenever the American people see that, I think they're, rightfully, troubled.

My understanding is, is that the Iranian government says that they are going to look into irregularities that have taken place. We weren’t on the ground, we did not have observers there, we did not have international observers on hand, so I can't state definitively one way or another what happened with respect to the election. But what I can say is that there appears to be a sense on the part of people who were so hopeful and so engaged and so committed to democracy who now feel betrayed. And I think it's important that, moving forward, whatever investigations take place are done in a way that is not resulting in bloodshed and is not resulting in people being stifled in expressing their views.

Now, with respect to the United States and our interactions with Iran, I've always believed that as odious as I consider some of President Ahmadinejad's statements, as deep as the differences that exist between the United States and Iran on a range of core issues, that the use of tough, hard-headed diplomacy -- diplomacy with no illusions about Iran and the nature of the differences between our two countries -- is critical when it comes to pursuing a core set of our national security interests, specifically, making sure that we are not seeing a nuclear arms race in the Middle East triggered by Iran obtaining a nuclear weapon; making sure that Iran is not exporting terrorist activity. Those are core interests not just to the United States but I think to a peaceful world in general.

We will continue to pursue a tough, direct dialogue between our two countries, and we'll see where it takes us. But even as we do so, I think it would be wrong for me to be silent about what we've seen on the television over the last few days. And what I would say to those people who put so much hope and energy and optimism into the political process, I would say to them that the world is watching and inspired by their participation, regardless of what the ultimate outcome of the election was. And they should know that the world is watching.

And particularly to the youth of Iran, I want them to know that we in the United States do not want to make any decisions for the Iranians, but we do believe that the Iranian people and their voices should be heard and respected.

PRIME MINISTER BERLUSCONI: ANSA.

Q (As translated.) President Obama, after this meeting with Prime Minister Berlusconi, what do you expect, in concrete terms, from the relationship between United States and Italy? And to Prime Minister Berlusconi, you had very strong relations with President George W. Bush. Do you expect and do you hope to build the same type of relations with President Obama, as well?

PRIME MINISTER BERLUSCONI: I took an oath of gratitude towards United States, which gave me freedom and which gave my country dignity after World War II. So I'm here to cooperate with the President of the United States. I'm here to cooperate with President Obama, as I cooperated with President Clinton and as I did with President Bush.

So if I can express a hope, I really hope we can build a direct and friendly relationship with President Obama. I would be more than happy to do so. And facts will tell.

But anyway, I think we had a good start.

PRESIDENT OBAMA: Absolutely. We've had a very good start. What I expect from the Prime Minister is an honest, frank sharing of views and a recognition that the United States and Italy share common values, common interests. Our economies have very strong commercial ties. And if we're acting on those mutual interests, then I have no doubt that we'll continue to see strong cooperation.

As I said before, Prime Minister Berlusconi's assistance on our efforts to close Guantanamo is very important to us. I have to say, by the way, that Bermuda has done us a great service, as well, on that front, and I'm grateful to them.

When it comes to Afghanistan and Pakistan, we are part of the same coalition that wants to make sure that the Afghan government is able and strong to sustain development for the Afghan people, but also to make sure that they're not serving as a safe haven for extremists.

When it comes to the world economy, I think all of us have an interest in improving the kinds of financial regulations that will prevent the kinds of crises that we saw happening most recently.

So, across the board, I think we have a host of common interests. In addition to liking Prime Minister Berlusconi personally, our peoples like each other and recognize that we have shared interests. And that, I think, will make the path for continued cooperation that much easier.

(After translation.) I must say, my answers sound very elegant in Italian. (Laughter.)

Steve Collinson.

Q Thank you, Mr. President. Of the conditions that Prime Minister Netanyahu laid out yesterday for a Palestinian state, the basis for negotiation, do you think they will likely prove a stumbling block, given the broadly negative reaction from the Arab states and the Palestinians?

PRESIDENT OBAMA: Well, first of all, I think it's important not to immediately assess the situation based on commentary the day after a speech. I think any time an Israeli Prime Minister makes a statement, the immediate reaction tends to be negative on one side. If the other side is making a statement, oftentimes the reaction is negative in Israel.

Overall, I thought that there was positive movement in the Prime Minister's speech. He acknowledged the need for two states. There were a lot of conditions, and obviously working through the conditions on Israel's side for security, as well as the Palestinian side for sovereignty and territorial integrity and the capacity to have a functioning, prosperous state, that's exactly what negotiations are supposed to be about. But what we're seeing is at least the possibility that we can restart serious talks.

Now, I've been very clear that, from the United States' perspective, Israel's security is non-negotiable. We will stand behind their defense. I've also made very clear that both sides are going to have to move in some politically difficult ways in order to achieve what is going to be in the long-term interests of the Israelis and the Palestinians and the international community.

On the Israeli side, that means a cessation of settlements. And there is a tendency to try to parse exactly what this means, but I think the parties on the ground understand that if you have a continuation of settlements that, in past agreements, have been categorized as illegal, that's going to be an impediment to progress. On the Palestinian side, whether it's the Palestinian Authority or other groups like Hamas that claim to speak for the Palestinians, a recognition of the Quartet principles, ensuring that there's a recognition of Israel's right to exist, making sure that past agreements are abided to, that there's an end to incitement against Israel and an end to violence against Israel. Those are necessary pillars of any serious agreement that's to be reached.

And those pillars have to be supported by the Arab states, because Israel's security concerns extend beyond simply the Palestinian Territories; they extend to concerns that they have in a whole host of neighbors where there's perceived and often real hostility towards Israel's security. So I'm glad that Prime Minister Netanyahu made the speech. The United States will continue to try to be as honest as possible to all sides in this dispute to indicate the degree to which it's in everybody's interests to move in a new direction. And I think it can be accomplished, but it's going to require a lot of work and a partnership with key countries like Italy in order to help the parties come together and recognize their own interests.

Q You discussed during the meeting the crisis, the economic crisis, you're going to discuss at the G8. The package of measures you are discussing right now, can this be a kind of basis for the next meetings -- G8 and G20?

PRESIDENT OBAMA: Well, our respective finance ministers, not just Italy's and the United States', but all the G8 members', have been meeting diligently. They've put forward a framework that will be discussed and hopefully ratified at the G8. That will provide a broad set of principles.

Now, the United States is putting forward some very specific regulatory reforms that are going to make sure that we don't find ourselves in this position again, that improves oversight, ensures that banks aren't taking risks with highly leveraged money that can result in systemic collapse, that consumers and investors are protected more effectively.

So we're going to have a lot of work to do. It's going to be a big, complex piece of legislation. Different countries are going to have different needs. Prime Minister Berlusconi was indicating to me that the banking system in Italy has not been under the same kinds of pressures as the banking system in the United States and some other European countries.

But I think the general principle -- that we're going to have improved oversight, better practices, and that there's some coordination and information-sharing between countries on issues like tax havens, for example, so that you don't have global capital avoiding more stringent rules by going to countries with weaker rules -- I think that's going to be something that all G8 members affirm, and we very much appreciate Prime Minister Berlusconi's leadership on this issue.

PRIME MINISTER BERLUSCONI: I would like to add to this that our ministers of finance have been working on all of these issues and packages. In particular they paid attention, for instance, to corporate governments and rules for transparency and a regulation of the financial sectors, accounting rules, and as President Obama has also mentioned, also, the issue of tax havens, to try and prevent those situations from happening again. And the idea is to work out a set of rules and regulations which can prevent situations and conditions like the ones we've experienced which have led -- from happening, experience that is to -- which led first to the financial crisis and then to the economic crisis that we are experiencing right now.

PRESIDENT OBAMA: Thank you. Grazie.

END 6:29 P. M. EDT ---