Washington -- Secretary of State Colin Powell said the Bush administration has no plan for conflict with Iran, Iraq or North Korea. But, he said the administration is looking at a variety of options for regime change in Iraq.

President Bush "has no plan before him right now that is a plan for a conflict," Powell said in testimony before the Senate Budget Committee in Washington February 12.

President Bush called Iraq, Iran and North Korea the "axis of evil" in his State of the Union speech on January 22. Before the Senate Budget Committee, Powell said the "axis of evil" phrase describes "a clear-headed, realistic policy."

"Most people understand the president is not looking for a war, we're looking for peace. But you don't get peace by sticking your head in the sand and ignoring evil where it exists," Powell said.

The secretary said the United States seeks dialogue and peaceful solutions but will not ignore its ultimate responsibilities if diplomacy and political action are not successful.

Turning to Iraq, Powell said the United States is working to improve the sanctions on the Iraqis "to make sure they do not succeed in their horrible quest to develop weapons of mass destruction."

He added the United States is examining its options with respect to regime change because the Bush administration believes "the people of the region, the people of the world, and the people of Iraq would be better off with a new regime."

Powell said the Bush administration has a dialogue with Iran despite the absence of diplomatic relations. He noted that Iran played helpful roles in the Bonn conference that set up the interim authority in Afghanistan and in the Tokyo conference on the reconstruction of Afghanistan.

At the same, Powell said Iran has been engaged in "troubling" actions involving trying to ship arms into western Afghanistan. Powell noted that Iran continues to develop weapons of mass destruction and the means of delivering them.

With respect to North Korea, Powell said the United States offers dialogue and provides fuel and food while keeping 37,000 troops in South Korea as a deterrent to North Korean aggression.

Commenting on the Middle East, Powell said President Bush "will not rest" until a cease-fire is established and negotiations based on the Mitchell peace plan are resumed between Israelis and Palestinians.

Ultimately, the Bush administration envisions "two states living side-by-side in that troubled land -- one the Jewish state called Israel, the other, a Palestinian state called Palestine," Powell said.

Powell said he received a letter from Palestinian leader Yasser Arafat on February 10 regarding the Karine A ship that Israeli forces captured in the Red Sea in early January carrying 50 tons of arms destined for the Palestinian Authority.

The secretary called the letter "somewhat positive" and said the Bush administration is in contact with Arafat and his close associates about doing more to stop terrorist attacks against Israel. Powell said he believes that Arafat has the authority to crackdown on terrorism, calling him the "elected leader of the Palestinian Authority."

Powell rejected a recommendation from Senator Robert Byrd that the United States condition its nearly $5 billion in combined annual aid to Israel and Egypt on progress toward peace between Israelis and Palestinians.

The secretary said Egypt has been "enormously supportive" of the U.S. peace efforts and has been applying pressure to Arafat to bring the violence under control.

As for Israel, Powell said it would be a misguided policy to threaten to withhold funds at time that Israel is suffering from terrorist attacks

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)