SECRETARY OF DEFENSE ASHTON CARTER: Well, good afternoon. Welcome.

 Tomorrow, it'll be almost two months since I took the oath of office as secretary of defense, and since then, I've been working to make the priorities that I set out for the department when I was sworn in progress.

 As I said on my first day as secretary of defense, my first priority is to help the president make the best possible national security decisions and then to implement those decisions. My second priority is to ensure the strength and health of our wonderful personnel around the world. And my third is about the future of our course, our people, and our technology. And as I say, to think outside our five-sided box here.

To achieve those priorities, I've traveled to Afghanistan and Kuwait to meet with American personnel working on two important missions there, worked with Congress to secure the resources we need to protect the country and continue to build the force of the future and get stability in the defense budget.

 I've spoken with our partners in the State Department and other agencies about working together in new ways and on new endeavors and visited with allies and partners both here and in Washington and just last week in the Asia-Pacific.

 I've met with our men and women in uniform around the country and abroad to say thank you and to make sure that all of our people, past, present, and future are treated with dignity and respect.

The work continued this week. For example, we had productive discussions with the Iraqi prime minister and the Iraqi defense minister about U.S.-Iraq security partnership and the real progress we're making in the campaign against ISIL.

I was up front in our meetings about how a lasting victory over ISIL requires inclusive governance in Baghdad and respect for local populations in all areas liberated from ISIL control.

And it'll continue next week. On Wednesday, I'm going to speak with ROTC cadets and midshipmen in Washington about sexual assault prevention and response, and then I'm going to meet with battalion and brigade-level first-responders to get their perspective on both preventing sexual assault and on combating retaliation.

Next week, I'll travel to California, to Silicon Valley to deliver a lecture at Stanford University on the future of technology, innovation, and cyber security, and then I'll meet with some technology executives out there to discuss how we can work together better.

 Much more to say, but I'll take -- I'm open to questions on any topics whatsoever that you may have. Before I do that, let me just tell you how much I appreciate what you do every day, the role you play in our society and the role you play in this building. I've worked in the Pentagon for many years, and we all really count on you to explain to our citizens and the world what we're doing to defend our country. On occasion, I understand, they hold us to account, but I know that it's all with the best of intentions, and I thank you.

Let me turn things over to Marty, and then we'll answer your questions.

GENERAL MARTIN DEMPSEY: Thank you, Mr. Secretary.

 I'll add a point or two. This is coming out of our meeting yesterday with Prime Minister Abadi. The government of Iraq has made gains, and trends are moving in the right direction. There remains a lot of hard work in integrating their militias, understate command and control as Iraq continues to prepare its forces to sustain momentum against ISIL.

The efforts of Prime Minister Abadi during the Tikrit offensive are a good step. We'll continue to consult with Iraq's leadership as they plan and conduct their operations.

 I'm encouraged by the commitment of the coalition. You may know that the -- that there's been an addition of 300 Australian troops and 100 New Zealand troops to the training mission, and that will certainly contribute to the outcomes we all seek.

They joined a notable list of international partners to our building partnership capacity mission, including the United Kingdom, Spain, Italy, Germany, Denmark, the Netherlands, and of course the United States.

Around the globe, I can tell you that our men and women in uniform are focused and doing what the nation needs them to do.

The security environment remains as dynamic as it -- it's ever been, and we remain focused on ensuring that our troops have the leadership, the training, and the resources to accomplish the tasks we ask of them. And with that, I, too am happy to answer your questions.

STAFF: I'll call on reporters, so we'll start with Bob Burns.

Q: Thank you.

Mr. Secretary, a question for each of you if I may.

On Yemen, Al Qaida forces have captured a major airport, a seaport, and an oil terminal today. I'm wondering if you think that the focus on the Houthi rebels has had the unintended consequence of presenting new opportunities for Al Qaida in Yemen. Does that give you any pause about the wisdom of the Saudi air campaign and the U.S. support for that?

SEC. CARTER: Well, I've --

Q: May I also..

SEC. CARTER: Sure.

Q: A question for General Dempsey as well, because I want -- General Dempsey, we're talking about Iraq, and today there have been reports that the ISIL forces have made important advances on Ramadi, having already captured apparently some smaller places around Ramadi.

I'm wondering whether you feel that Ramadi's in danger of falling, and what does it say about the way ahead, the difficulty of the way ahead for the Iraqi forces in Anbar?

SEC. CARTER: OK. Thanks, Bob.

So, Yemen -- Yemen first. I've seen reports to that effect also. What that suggests is that yes, AQAP provides opportunity in the environment created by the turmoil in Yemen. AQAP, just to remind you, is a branch of Al Qaida that has shown a particular determination to attack us and our homeland, and is therefore of serious concern to us. We continue to watch them and take action against AQAP.

 You know, it's obvious that it's easier to do our counter-terrorism operations against AQAP when there's a settled government in Yemen. There is not that now. We, for that reason and other reasons, hope that there will be and are trying to work with others in that direction. But in the meantime, we need to, and do through other means protect ourselves against AQAP, because they are dangerous, and there are other things we can do to act against them, and we are.

GEN. DEMPSEY: On Iraq, let me make a distinction between the military offensive that's going up north of Baghdad, up through Diyala, up into Tikrit, Baiji, and eventually up near Kirkuk, from Al Anbar province.

So, the -- the offensive north of Baghdad has been deliberate, measured, steady progress. Al Anbar has always been kind of pockets of you -- of ISF, Iraqi Security Forces, and pockets of ISIL. So, it's been a much more dynamic back and forth. And so this latest attack on Ramadi is yet another indication that what the government of Iraq really needs to do is connect these ink blots, if you will, of their legitimate security forces, so that there isn't this constant back and forth.

And that was the topic of our conversation with Prime Minister Abadi yesterday, and it is his intent to -- to focus now on Al Anbar province.

Q: Is that why they need additional U.S. help, either weapons or in airstrikes?

GEN. DEMPSEY: It's part of the reason. The -- we didn't talk about specifying any particular kind of support to the Al Anbar offensive, but rather the concept of an Al Anbar offensive while maintaining pressure north of Baghdad as well.

STAFF: Next question to Jim Sciutto from CNN.

Q: Thanks very much, Mr. Secretary. Welcome.

 I should say welcome back.

Just a brief follow on Yemen, and then I want to ask about Ukraine, but in light of the fact that AQAP consistently described by U.S. counter-terror officials as the principal, most severe threat or one of the two most severe threats, with the Khorasan Group, to the U.S. homeland.

 With U.S. military assets out of there, the withdrawal of diplomats, a great number of U.S. intelligence resources, I wonder if you could articulate for the American people how much greater is the AQAP threat to Americans today due to AQAP's advance, it's gain in territory there, and due to the loss of American assets on the ground there that could target them, track them, et cetera?

 SEC. CARTER: As I said, our efforts have to change their character but remain steady in their intensity.   This is a group that, as you indicated and as I indicated earlier, does show determination to not only fight on the ground in Yemen, which is what you referred to, but also strike at the United States.

  It's easier for us to operate against a group like that if we have the cooperation of a stable government as was the case in the past. But if we don't have a stable government, as is the case in the current circumstance, we have to use other means to protect ourselves, and that's what we're doing.

 Q: But how can those other means compensate, without for instance, U.S. special forces on the ground, a listening post in the capital, Sana'a, the cooperation with the existing government? It's just hard to imagine for people at home to imagine that there's the same control and response capability.

 SEC. CARTER: I'll repeat, it's easier if there's a government with which we can cooperate in existence in that country. We're not going to find that all the time in all places in the world. And that's why we have counter-terrorism capabilities that don't depend upon that. And we resort to them and need them and use them in a circumstance like this where we need to protect ourselves anyway.

  Q: If I could just follow on Ukraine. It's more than a year since Russia took Crimea, and of course you have reaction following Eastern Ukraine, and you've had fighting flaring up despite the attempt at the ceasefire. And I took note today that the Russian president, Vladimir Putin, again claimed there are no Russian troops on the ground in Eastern Ukraine, when the intelligence is to the contrary.

 I'm just wondering how you can move the ball forward, when the adversary in this case won't even grant the facts on the ground.  And I just wonder, as you come into this job, what evidence you have seen that the administration policy of gradually raising the economic costs on Russia is having any effect whatsoever on the ground in Ukraine?

 SEC. CARTER:  OK.  Well, you're right.  Or as you suggest, the -- a principal point of pressure that the United States has been applying to Russia for some time now in account of the fact that Russia is, and we know is participating in fomenting trouble in Eastern Ukraine is the economic pressure.  And of course that's not just ours Jim, and in particular, I guess it's important to note it's -- it's not especially ours.  It's especially European sanctions, because that's -- they have the most economic leverage over Russia.

 I'm not an economist, but I understand that those sanctions are having an effect on Russia, along with plummeting oil prices.  Those are the two factors bringing pressure to bear upon the Russian economy, and so the first line of -- of pressure for us is economic and political.  And we're doing that.

 With respect to the question of Russia's role in there, I think we have abundant evidence of that, the international community has abundant evidence of that, the Europeans have evidence that convinces them to take the strong economic steps that they have, and I -- my understanding is and my observation is that this is having a real effect on the Russian economy, and at some point the Russian people are going to ask themselves whether these kinds of adventures are worth the price.

 STAFF:  Thank you, Jim.  We'll try Jamie McIntyre next.

 Q:  Mr. Secretary, first of all, good to see you again.  It's been a few years.

 I noted at your ceremonial swearing-in ceremony awhile back that former Secretary Perry noted your joint efforts in attempting to denuclearize as you've termed it, North Korea, and that those efforts failed.  And my question to you is, what lessons from that experience do you think would apply to the current situation with Iran?

And Mr. Chairman, if I might follow on this tradition of asking each of you a question, and you can of course chime in if you want, I'm just also curious, with Iran apparently now in line to get these advanced air defense systems from Russia, does that effectively take the military option off the table at some point in the future, or at the very least make it enormously more complicated?

SEC. CARTER:  With respect to the nuclear weapons situation in Iran, which is your question, a couple of things, Jamie.  First, those negotiations that are being conducted by us and our P5-plus-1 partners with the Iranians have the objective of arresting the North Korean -- I mean, not North Korean, excuse me, the Iranian nuclear program.  And they're obviously -- that process isn't complete yet. 

 As the president has indicated, he's looking for a good deal, and there is no deal yet sewn up, so it's going to take some time for Secretary Kerry and Secretary Moniz and the others who are negotiating that to see what kind of agreement they're able to reach with the Iranians, but we've made it clear what is necessary to satisfy us, that the agreement is a good agreement from our point of view.

 For me, here, our role is not to conduct those negotiations, but two other things.  The first is to make sure that we have, as the president says, other options on the table.  And that's something we take very seriously here and we do have other options on the table.

 And the second thing is to continue to play a stabilizing role in the region as a whole with all of our friends and allies, of which we have many there, and continue to strengthen their capabilities and their confidence, so we're doing that. 

 So those are the -- our two jobs here in the Department of Defense, and I'm very attentive to them, as is Chairman Dempsey and everybody else.

 GEN. DEMPSEY:  And to your question about the -- the introduction of the S-300 ordinance, the derivative that they export, the S-20 Charlie air defense system, we've known about the potential for that system to be sold to Iran for several years, and have accounted for it in all of our planning.

Q:  So it wouldn't present a military obstacle if there was a need in the future to conduct a strike inside?

GEN. DEMPSEY:  The military option that I owe the president to both encourage the diplomatic solution and if the diplomacy fails to -- to ensure that Iran doesn't achieve a nuclear weapon, is intact.

Q:  Thank you.

 For both of you, first with General Dempsey, I wanted to ask you about Yemen and Saudi Arabia.  There's wide agreement that the Houthis are backed financially by Iran, but the Saudis seem to take it further, and say that the Houthis are not only supported by Iran, but are controlled by Iran, sort of like Hezbollah in Lebanon.  Do you agree with that, that the Houthis are a proxy or a tool of Iranian power? 

And also, so far, the Houthis and Al Qaida both seem to be gaining territory during the Saudi airstrikes.  Do the Saudis have anyone on the ground on their side in Yemen to fight as their proxy?  And for Secretary Carter, post Tikrit, what role do you expect the Shia militias to play in Iraq in the U.S.-supported Iraqi offensive?  Thank you.

 GEN. DEMPSEY:  So, to the question about the degree of control that Iran exerts over the Houthis, if you look back at the history of their relationship, they have not exerted control in the same way that they exert control over Lebanese Hezbollah, for example.  But they are a source of resources for the -- for the Houthis.  And the Houthi leader himself Abdul-Malik is -- you know, considers himself to be one of the heirs of the prophet and the Zaydi Shia, which is the sect of Shia Islam from which the Houthis draw their inspiration, has an aspiration to restore that empire, which existed centuries ago that included all of Yemen and parts of southern -- southern Saudi Arabia.

 So, I don't see them as having the same kind of relationship as Lebanese Hezbollah has with Iran, but they clearly have a relationship with them.  And to that extent, the Saudis are -- are right to be concerned.

Q:  On the -- the second question.

GEN. DEMPSEY:  Yeah, I forget what it was.

Q:  Do the Saudis have anybody on the ground to fight as their proxy?

GEN. DEMPSEY:  Yeah, I -- I won't speak to who's on the ground doing what for many of the coalition partners, but I will tell you that General Lloyd Austin, our Central Command commander, is in Riyadh, or was in Riyadh today for a day-long consultation with the -- with the Saudi leadership on their campaign plan.

SEC. CARTER:  So, with respect to Shiite militias in Iraq, which was your question to me, this is a subject that we discussed with the prime minister and the defense minister of Iraq, who are here this week.  And the -- the -- to go back to the kinda the important point there with which they agreed, it's important the -- all forces acting against ISIS in Iraq be under the control of the central Iraqi government.  That is the principle that we certainly adhere to, and that's the principle that the prime minister has.

 Therefore, to get to your point about Shiite militias, there are Shiite militias that have that characteristic and there are those that don't.  And the prime minister made it quite clear that the latter, that is ones that were not under his command and control, were not welcome there; would not participate in their operations; and would not be supported.  And they certainly won't be supported by us.

We support forces that are under the command and control of the Iraqi government, irrespective of their sectarian makeup, which is the whole point.  The way things got the way they did in Iraq is the collapse of a multi-sectarian approach.  And what Prime Minister Abadi is trying to do in his own government is to create a fight against ISIL that consists of Shia forces, Sunni forces, and Kurdish forces in sectarian makeup, but all under the control of the government in Iraq.

And it is that -- it is those forces and only those forces that we will provide support to.

 Q:  Mr. Secretary, do you think it's time for Saudi Arabia to consider winding down its airstrikes?  Could further airstrikes risk destabilizing or prompting a wider role? 

 And General Dempsey, the Russian -- your Russian counterpart today talked about targeting NATO missile defense systems.  The Russian defense minister talked about U.S. exercises on tactical nuclear weapons.  How worried are you about stepped up rhetoric by Russia?  And how worried are you about aggressive acts like the air intercept last week?   

 SEC. CARTER:  Well, to get to your first point, we're assisting the Saudis to protect their own territory and to conduct operations that are designed to lead ultimately to a political settlement to Yemen.  And that is our understanding and our objective.  And that -- that's why we're working so closely with the Saudis.  As the chairman indicated, General Austin's been in Riyadh earlier today.  We're coordinating very closely with them, both on the military objectives and on the political objective.

 GEN. DEMPSEY:  So Julian, on the issue of Russian rhetoric about the missile defense system, this goes back a very long time.  And we have channels that remain active in getting together with the Russians and laying out the intentions, the capabilities of the -- of the air defense system as a way of trying to assure them that that is not being built against them.

And we've -- we've done this for several years.  Most of the time, we agree to disagree, but the rhetoric is unsurprising, I supposed I could say.  And those channels remain open, as they do for dealing with things like unprofessional or reckless intercepts.  And this intercept was in fact both unprofessional and reckless and foolish, actually, in the sense that it's -- it was conducted for no apparent reason.

And so what we're -- what we're doing is contacting the Russians through appropriate channels to ask them to investigate the incident and determine whether it was purposeful or if it was an isolated instance by a hot-blooded pilot.  But it is -- it's serious. 

Q:  You don't have an answer yet?

GEN. DEMPSEY:  I don't. 

 Q:  For Chairman Dempsey, you mentioned a moment ago that with the coalition concentration into the military offensive in the north, it almost sounds as if there may be insufficient forces or resources to keep Ramadi from falling.  How critical would it be if it fell into the hands of ISIS to the overall war effort?  And in terms of Beji, it appears anyway that ISIS controls the city of Beji and much of the surrounding territory surrounding that critical infrastructure of that refinery.

 And they've made advances on that.  Are the Iraqi and U.S. forces -- coalition forces going to be able to hang onto the refinery?  Or what would that mean if ISIS were able to secure that refinery?

GEN. DEMPSEY:  So, I'll answer the question about Ramadi first.  I think that, you know, Ramadi is not -- first of all, it's already a humanitarian problem because of the -- the Iraqi citizens who are now refugees, many of whom have flowed into Baghdad.  And so we're working with the Iraqi government to ensure we deal with that.

GEN. DEMPSEY:  I -- the city itself is -- it's not symbolic in any way.  It's not been declared, you know, part of the caliphate, on the one hand, or central to the future of Iraq.  But we want to get it back.  I mean, the issue here is not -- is not brick and mortar.  It's about defeating ISIL.  So, as I said, this -- I -- you know, I would much rather that Ramadi not fall, but it won't be the end of the campaign should it fall.  We got to get it back.  And that's tragic for the people, as have -- as we've seen along the way.

 Baiji's a little different, of course.  Baiji is part of the Iraqi oil infrastructure.  Once the Iraqis have full control of Baiji, they will control all of their oil infrastructure, both North and South, and deny ISIL the ability to generate revenue through oil.  So Baiji is a more strategic target.  And I -- and that's why the focus right now is, in fact, on Baiji.

Q:  And how serious is the ISIL threat to the refinery right now?

GEN. DEMPSEY:  Well, it's serious in the sense that they've penetrated the outer perimeter.  It's a very -- you've been there, I think.  It's -- it's an extraordinarily large expanse of facility.  The -- the refinery itself is at no risk right now, but -- and we're focusing a lot of our ISR and air support there.

STAFF:  We'll go to Craig Whitlock and then probably one question after that.

Q:  A follow-up question on Iraq.  I wanted to ask you about the proximity of U.S. military personnel to the fighting, and if that has changed at all in recent days or weeks.  Were there any U.S. military-controlled areas or JTACs or people calling strikes in Tikrit?  And has U.S. offered to do that in Ramadi?

SEC. CARTER:  First of all, with respect to Tikrit -- and this is actually true -- the more general answer to your -- your question -- our troops that are there are in a -- the locations that we've previously identified, where they're there for train, advise and assist.  There are not JTACs embedded with Iraqi security forces, and there were not in Tikrit.

We're still able to be effective in providing air support to Iraqi forces because we do have Americans in their command centers, and practiced the methods by which we would ensure that the targets that were given to us were valid targets.  Did everything that we usually do to ensure that there are -- is no collateral damage or that collateral damage is minimized.

 So we're going through all the steps that we normally do to ensure that air strikes can be both effective and precise.  But we're not using our own forward air -- forward controllers to do that in Tikrit or anywhere else in Iraq.  That hasn't changed.

STAFF:  Last question -- Nancy.

 Q:  My question is for you, General Dempsey.  Prime Minister Abadi came out today at CSIS and said that Tikrit was a model.  Is that your assessment, given that there have been reports of looting and executions happening in Tikrit?  And I was wondering if you could speak, both of you a little bit more broadly about, what is the strategic threat that -- that is posed in Yemen such that it demands the U.S. provide intelligence to Saudi Arabia?  What -- what is the U.S. strategic interest in that -- in that fight in Yemen?

 GEN. DEMPSEY:  Let me -- I'll start with the question about whether Tikrit is a -- is a model.  It's a model of how to integrate the efforts of the counterterror systems -- the CTS -- Iraqi security force CTS, a conventional brigade, and the -- that part of the popular mobilization forces that are under direct control of the Iraqi government.  It is a model in that sense.  Because it's the first time those three groups ever worked together under the central control of the Ministry of Defense.  And we were able to support that and provide the necessary fires to let that -- to let that campaign reach a successful conclusion.

 We're -- we've watched, and are continuing to watch the reports of whether there were looting or burning and -- or atrocities conducted afterwards.  Although we've seen some images, they were -- and the investigation is ongoing collaboratively with the Iraqi government, there is no evidence of widespread activity.  There was likely to be some isolated instances.

 We've actually got a long history of being able to deal with this.  The Leahy Amendment tells us that we can support those forces that behave in a way consistent with our values.  And when a particular unit does not, we isolate it and we no longer support it.  So if this investigation reveals that a particular part of either the Iraqi security forces or the popular mobilization force did not behave appropriately, we won't support it going forward.

 Q:  I'm sorry -- who conducts -- who is conducting this investigation, though?

GEN. DEMPSEY:  Well, the Iraqi government -- President Abadi -- Prime Minister Abadi himself declared that he was taking responsibility for that investigation.

 Q:  And when you say "isolated incidents," can you give us a sense of how many?  How many are involved, and the specific --

GEN. DEMPSEY:  You know, I can't from memory.  I mean, there is a -- a certain village South of -- South of Tikrit where there was evidence of buildings that had been scorched on the outside -- the masonry.  In some cases, that was probably the result of the fighting, and in others, it probably was, in fact, the result of misbehavior.  But they're trying got sort that out.  Not so much in Tikrit, by the way.

That was a strategic -- (inaudible).

Q:  Yeah.  And, I'm sorry -- Saudi Arabia and -- Saudi Arabia and why -- can you explain -- I'm curious if you could elaborate on the U.S. strategic interest in providing intelligence to -- to Saudi Arabia against the Houthis.

GEN. DEMPSEY:  Sir?

SEC. CARTER:  I -- I can do that.  Two things there.  I mean, first -- first of all, Saudi Arabia is a longstanding friend and ally of ours.  And we have undertaken to help them protect themselves and their own border, and so forth.  And that's a longstanding -- in accordance with a longstanding obligation and friendship that we have with them.

With respect to events in Yemen, we are supporting their operations in Yemen in the way I described earlier. The objective there is to restore a political process there in which a legitimate government can be established in Yemen and things can settle down there.  That's good for the people of Yemen, first and foremost.  It's good for Saudi Arabia that doesn't need this on its Southern border.  And as the earlier questions indicated, it's good for us, among other reasons, because of AQAP's presence in Yemen.  But for that to occur, it'll require more than military action.

GEN. DEMPSEY:  Yes.

SEC. CARTER:  It'll require a political settlement.  And that, in turn, is going to require the Houthis to want to pursue a political settlement, as well.

Q:  Given that, then did the U.S. agree with the decision by Saudi Arabia to conduct air strikes in the first place?

SEC. CARTER:  We supported that.  We're not only supporting that verbally.  We were -- we're supporting that with -- with assistance.  And, again, on route to a political settlement.  That's where things need to go.  And, by the way, I had opportunity to speak to Ban Ki-moon, the secretary general of the United Nations about precisely that today.  So that's where we would like to see this thing headed for everybody's sake.

STAFF:  That concludes our press conference.  Thank you very much. We look forward to doing the next one.

Q:  You don't want to say anything about the gyrocopter trick?

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