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ABC News Breakfast -

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(generated from captions) regime. North Korea responded

by saying it will step up its nuclear weapons program. For

more now on the Iranian

elections and overtures of

Minister Stephen Smith peace in Israel the Foreign

Minister Stephen Smith joins us

from Canberra . Good

morning. Good morning. Now, is

this really a serious offer

from Binyamin Netanyahu? I

think the key point about the

speech from Prime Minister

Netanyahu is that for the first

occasion the Prime Minister and

his government since they were

elected recently have indicated

that a two-state solution has

to be the basis for an enduring

peace in the Middle East. And this reflects Australia's peace in the Middle East. And

long-standing policy that not

just of this government but of

previous governments, and it

also reflects the basis on

which the international

community views or looks at the difficulties in the Middle

East. So it's a speech that

will require careful

examination in the coming days,

but I think the key point for

the international community is

for the first occasion we have

an acknowledgement that a

two-state solution is required two-state solution is required

as the basis for peace in the

Middle East. Is it crucial though for Binyamin Netanyahu to make some sort of commitment

on setlements, in this offer is

to be treated as serious?

Well, Australia's position -

again, and Australia's position

is reflected by the general

view of the international

community - is that consistent

with the obligations both

parties have made under the

road map, there should be a

freeze on freeze on settlements. That's

Australia's view. That's also

the view that President Obama

and the US administration,

through the Secretary of State

Clinton have also put very

strongly, not just to the

Israeli government, but put

that view very strongly to the

rest of the world and the Australian Government supports

that view, and we reflected

that at the end of last year

with a changed vetting

positions at the UN. So a

freeze on settlements is

consistent with the consistent with the obligations

entered into under the road map

process, and that should be

respected. A freeze on

settlements and also repatriation of Palestinian

refugees Well, the question of

the right to refugees --

rights of refugees is very

complex and complicated that

will no doubt be one of the

issues which will be the

subject of intense negotiation

between the two parties but I

think what Prime Minister

Netanyahu's speech reflects

today is there is

today is there is now a basis

for a peace process, for negotiations to commence and

start. We all know that to get

a long-term, just and enduring

peace in the Middle East, there

has to be a negotiation

process. We strongly support

the efforts of the United States administration, not just

the President and the Secretary

of State, but also special

ambassador Mitchell in these efforts, and efforts, and we welcome the

fact that Prime Minister

Netanyahu has for the first

occasion indicate ed that peace

in the Middle East has to be

based on a two-state

solution. We'll turn to Iran

now. There are conflicting

views onth legitimacy of this

election. Does the Australian

government recognise the

result? Well, we know that

candidate Mousavi, one of the presidential candidates, has candidate Mousavi, one of the

indicateed that he's proposing

to lay complaints to the

Iranian Election Commission. We

will simply watch those developments. For the time

being, we note the fact that

there's been an election in

Iran which has had very strong

involvement by the Iranian

people. We certainly hope that

the outcome reflects the will

of the Iranian people. But of the Iranian people. But for

the present, like the rest of the international community,

we'll watch those developments

and see whether Mr Mousavi

pursues that before the Iranian

Election Commission. The key

point of course arising out of

the Iranian election, whoever

was successful, was the need

and is the need for Iran to

change its policy, particularly

on its nuclear program. Whether on its nuclear program. Whether President Ahmadinejad was

re-elected or whether Mr

Mousavi won the election, in

some respects was academic. The

key point is: Iran must change

its policy to reflect the

wishes of the Security Council,

the IAEA and the international

community on its nuclear

program. Specifically, what are

those demands? Well, they need

to cease their program. The fact that Iran

fact that Iran is acting

inconsistently with United

Nations Security Council

resolutions, that it's acting

inconsistently with the

International Atomic Energy requirements of the

Agency and moving towards, we

fear, a weapons-based program

rather than a civil nuclear

energy program is very worrying

for the region and very

worrying for the international

community. So President

Ahmadinejad and Iran needs to change policy

change policy on this front,

and Australia very strongly

supports the sanctions that the

Security Council have imposed

on this matter - in this

matter, and we've also, last

year, announced our own

autonomous sanctions to reflect

the fact that we very strongly

believe that Iran needs to

desist from its nuclear program

in this way. Just in relation

to nuclear problems with

another nation, North Korea, another nation, North Korea,

will Australian ships get

involved in stopping and

searching North Korean ships

suspected of carrying banned

nuclear or missile components?

Hat this stage we don't have

any ships in what you'd regard

as the relevant location but if

that were could-to-come to

pass, Australia would act

consistently with the United

Nations Security Council resolution, which the Security

Council adopted over the weekend. It very weekend. It very carefully lays

out additional sanctions

against North Korea. It very

carefully lays out the capacity

of the international community

to interdict in limited

circumstances. And if an

Australian ship were to come in

contact with a North Korean

ship, it would act consistently

Security Council resolution, with the United Nations

but currently we don't see that prospect

prospect having much likelihood

of occurring in the near future. We've been running a

story this morning, one of our

ABC reporters was with an

Australian unit over in

Afghanistan and that unit came

under fire over several days.

Highlighting the problem that

it's still an incredibly

dangerous situation over there.

What is the progress of the

areas where Australian troops are involved are involved in at the moment in halving? Well, Afghanistan

is very difficult and very

dangerous. And this has been

acknowledged consistently by

the Australian Government.

Acknowledged also by my

colleague the Defence Minister,

Senator Faulkner, who was in

Afghanistan over the weekend. Afghanistan remains difficult

and dangerous, but it also very

much is in Australia's national interests to continue to play its role as its role as part of the international community in

staring down what is currently the hotbed of international

terrorism. Stephen Smith in

Canberra, thanks very much for