Dr. Teltschik, thank you. Thank you Minister President Stoiber. There are so many distinguished people in this room that it is impossible to recognize all of them. I would like to extend a hearty greeting to my fellow Americans and the distinguished American delegation led by our co-chairmen Senator John McCain and Senator Joe Lieberman.

It's a pleasure to return to Munich for this conference. I realize that I am a stand-in and that all of you really would have preferred to come here to listen to the man who people in America including the President of the United States are now describing as America's latest matinee idol of the over seventy set. But I will do my best to stand in for Secretary Rumsfeld.

Ten years ago, at the end of the Cold War, many people -- on both sides of the Atlantic -- said that we didn't need NATO any more. Some said that the threat had gone away. Others said that America's involvement in European security was no longer needed. Ten years later, NATO continues to be the key to security and stability in Europe, most notably in the Balkans, where, as President Bush said in Warsaw last June, "we went in ... together, and we will come out together." And now, for the first time in its history, NATO has invoked Article V, not because of an attack on Europe, but because the United States itself has been attacked by terrorists operating from abroad.

Following the attacks of September 11th, those who might have consigned NATO to oblivion can no longer question the value of this alliance of nations dedicated to freedom. The ensuing war on terror has underscored that our transatlantic ties are not obsolete. They are essential.

The response of NATO to September 11th demonstrates that this alliance of democracies can deal with uncertainty and uncharted territory.

As we have waged this war on terror, we have been harvesting the fruit of more than 50 years of joint planning, training and operations within the NATO framework.

For the first time in the Alliance's history, AWACS from NATO are helping to monitor U.S. airspace to prevent further terrorist attacks. Seven NATO AWACS, flying out of Tinker Air Force Base, are patrolling the skies of the United States, relieving a significant burden on our own AWACS fleet, which is strained by operations in two theaters. In Afghanistan itself, individual NATO countries, along with many others from around the world, are contributing to the war effort and to the post-Taliban reconstruction effort.

In Afghanistan alone, our partners are contributing 3,500 troops to Operation Enduring Freedom and to the International Security Assistance Force in Kabul, that is nearly half of the 8,000 non-Afghan forces in the country today. Indeed, because we have been deliberately working to keep our footprint in that country small, we have had far more offers of help than we have been able to use thus far -- but don't worry, the campaign is far from over.

Twenty-seven coalition partners now work together at the United States Central Command Headquarters in Tampa, and sixteen nations serve side by side in the theater. Most of them NATO allies. Another 66 nations have contributed support in various forms throughout the campaign. And we could not possibly have achieved what we have so far without the support and assistance of a number of countries in the region, most importantly, Pakistan.

Today, I would like to focus briefly on four questions that are important in addressing the security challenges that we face today:

First,

What have we learned from the events of September 11th?

Second,

What can we learn from the conduct of the war on terrorism so far?

Third,

How can we expand the alliance against terrorism, particularly within the Muslim world?

And fourth,

How can we build a stronger security foundation for the 21st Century?

For too many years, the international community treated terrorism as an ugly fact of international life, one with tragic and occasionally terrible consequences, but something we could manage to live with. Often terrorism was treated simply as a problem of law enforcement. The goal was to catch terrorists, try them, and punish them, hoping that doing so would deter others -- but it didn't. People spoke frequently of retaliation -- but they rarely acted. And when they did act, it was more often against the lower-level perpetrators of terrorist acts than against those who were ultimately responsible.

September 11th changed all of that. On that day we learned, at enormous cost, that the problem goes beyond crime and punishment. The attacks of that day not only demonstrate the failure of previous approaches, they underscore the dangers we will face if we continue living with terrorism. What happened on September 11th, as terrible as it was, is but a pale shadow of what will happen if terrorists use weapons of mass destruction.

Our approach has to aim at prevention and not merely punishment. We are at war. Self-defense requires prevention and sometimes preemption. It is not possible to defend against every threat, in every place, at every conceivable time. The only defense against terrorism is to take war to the enemy. The terrorists' great advantage is their ability to hide, not merely in the mountains of Afghanistan, but in the towns and cities of Europe and the United States. We need to hunt them down relentlessly, but we also need to deny them the sanctuaries in which they can safely plan and organize and to deprive them of the financial and material resources they need to operate -- as Secretary Rumsfeld has said, "we need to drain the swamp" in which they live.

No one who has seen the images of September 11th can doubt that our response must be wide-ranging; nor should anyone doubt the far greater destruction terrorists could wreak with weapons of greater power. As President Bush has noted, what has been found in the caves of Afghanistan indicates the scope of what we could face: diagrams of American nuclear power plants and water facilities, maps of our cities and descriptions of landmarks, not just in America but around the world, along with detailed instructions for making chemical weapons.

Since September 11th, we have acquired a visceral understanding of what terrorists can do with commercial aircraft, something that seemed remote and hypothetical before. We cannot afford to wait until we have a visceral understanding of what terrorists can do with weapons of mass destruction, before we act to prevent it.

Facing that danger, countries must make a choice. Those that stand for peace, security and the rule of law -- the great majority of countries in the world -- stand united with us in this struggle between good and evil. Those countries that choose to tolerate terrorism and refuse to take action -- or worse, those countries that continue to support it -- will face consequences. As President Bush made clear, every nation now knows that we cannot accept and we will not accept states that harbor, finance, train, or equip the agents of terror. They have been warned; they are being watched, and they will be held to account.

What can we learn from the conduct of the war on terrorism so far?

President Bush and Secretary Rumsfeld have repeatedly emphasized that the war on terrorism will be a long struggle. Although much has been accomplished already in Afghanistan and in attacking terrorist cells worldwide, even in Afghanistan there is much work to be done.

So perhaps, it is a bit premature to draw conclusions. Yet, I think there are already important lessons to be learned from the campaign so far.

From the beginning, Secretary Rumsfeld has emphasized the importance of setting the key goals and the key concepts of the operation correctly. Recently, he made a list of those concepts that have been critical in our action so far. It's a long list actually, but let me share with you today a few of the most significant ones.

One of the most important concepts concerns the nature of coalitions in this campaign and the idea that "the mission has to determine the coalition, not the other way around." Otherwise, as the Secretary says, the mission will be reduced to "the lowest common denominator."

As a corollary of that, there will not be a single coalition, but rather different coalitions for different missions, what the Secretary calls "flexible" coalitions.

In fact, our policy in this war has been to accept help from countries on whatever basis is most comfortable to them. Some will join us publicly; others will choose quiet and discrete forms of cooperation. We recognize that it is best for each country to characterize how it is helping, instead of our doing it for them. Ultimately, this maximizes their cooperation and our effectiveness.

Perhaps our most important coalition partners have been the Afghan people themselves. We leveraged the desire of the Afghan people to be liberated from the Taliban and to be rid of the foreign terrorists who brought so much destruction to their country. And from the very first day, we emphasized humanitarian operations as part of our military effort.

Another key concept was not to rule out anything, including the use of ground forces. From the beginning, we understood that this would not be an antiseptic, "cruise missile war." We were willing to put "boots on the ground" where and when appropriate.

Indeed, military success in this campaign was only truly achieved when we inserted Special Forces on the ground, dramatically improving the effectiveness of the air campaign. We saw soldiers armed with rifles, maneuvering on horseback, using advanced communications to direct strikes by 50-year-old bombers. When reporters asked Secretary Rumsfeld about the reintroduction of the 19th century horse cavalry in modern war, he said: "It's all part of my transformation plan."

How can we expand the alliance against terrorism, particularly within the Muslim world?

The fight against terrorism is not just a fight of the Western countries, but of all who aspire to peace and freedom throughout the world, and most emphatically in the Muslim world itself. From my own experience as American Ambassador in Indonesia, a country with the largest Muslim population of any in the world, I know that the vast majority of the world's Muslims have no use for the extreme doctrines espoused by such groups as Al Qaida and the Taliban. To the contrary, they abhor terrorism and they abhor the way the terrorists have not only hijacked airplanes but also have attempted to highjack one of the world's great religions.

To win the war against terror we have to reach out to the hundreds of millions of moderate and tolerant people in the Muslim world, including the Arab world. They are on the front line of the struggle against terrorism. By helping them to stand up against the terrorists without fear, we help ourselves. Equally important, we help to lay the foundations for a better world after the battle against terror has been won.

Our goal needs to be more than just defeating the terrorists and eliminating terrorist networks. As President Bush said in his State of the Union message, "we have a great opportunity during this time of war to lead the world toward the values that will bring lasting peace.... America, the President said, will take the side of brave men and women who advocate these values around the world, including the Islamic world, because we have a greater objective than eliminating threats and containing resentment. We seek a just and peaceful world beyond the war on terror."

No leader has taken greater risks in the struggle against terrorism than President Musharraf of Pakistan and no country has more at stake in this fight.

And right here in NATO we have an ally, Turkey, that is a model for the Muslim world's aspirations for democratic progress and prosperity. Turkey, too, deserves our support. Those who would criticize Turkey for its problems confuse what is problematic with what is fundamental, focus too much on where Turkey is today and ignore where it is going.

What is fundamental is Turkey's democratic character. A Turkey that can overcome its present problems and continue the progress that country made over the course of the last century can become an example for the entire Muslim world -- an example of the possibility of reconciling religious belief with modern secular democratic institutions.

Indonesia is another important example of a nation seeking to build a democratic government based on a culture of tolerance.

And, we need more examples of success in the Arab world itself. Where countries are struggling to make progress, as Jordan and Morocco are doing, they need our support. It is no accident that Jordan today is making one of the largest contributions to the coalition in Afghanistan, or that King Abdullah has condemned terrorism in clear and heart-felt language. And our support should extend beyond governments to those "brave men and women" of whom President Bush spoke.

As difficult as it is to think about other challenges in the middle of this great effort, we must think beyond the war on terrorism if we wish to build a solid foundation for peace and security in this century. Strengthening and enlarging NATO and building a new relationship with Russia are key to that foundation in Europe.

In Warsaw last June, President Bush emphasized the importance of "NATO membership for all of Europe's democracies that seek it and are ready to share the responsibility that NATO brings." That is as important today as it was before September 11th.

Contradicting the gloomy predictions that were heard at the time, of the first round of NATO enlargement, that round did not build a new wall down the middle of Europe. It did build new structures, but those structures are bridges, not walls.

As we plan for the Prague summit, we should heed President Bush's call "not to calculate how little we can get away with, but how much we can do to advance the cause of freedom." All those countries that aspire to be members of NATO need to work seriously to meet the standards of membership, and the standards of membership should be kept high. But experience has shown that NATO enlargement has strengthened security and stability throughout Europe. All countries have benefited from this process, including Russia.

Today we also have an historic opportunity to build a new relationship with Russia. Recently, the United States and Russia have engaged in a new dialogue that is fashioning a new strategic relationship.

We have made a conscious decision to move beyond a relationship with Russia centered on preserving the mutual threat of massive nuclear destruction to a relationship that is based instead on common security interests: a relationship that is normal among states that no longer regard themselves as deadly rivals. In moving toward a normal, healthy relationship, we have been able to set aside the fears of the past and plan for radical reductions in the legacy nuclear forces of the Cold War.

NATO as an alliance has a crucial role to play in integrating Russia into the framework of European security. In the Joint Statement they issued after their November meeting in Crawford, Texas, President Bush and President Putin affirmed their determination to "work, together with NATO and other NATO members, to improve, strengthen, and enhance the relationship between NATO and Russia."

NATO has seized this opportunity by resolving to find ways for the Alliance and Russia to work together "at 20." It is important to get started with practical, concrete forms of cooperation that build on NATO's and Russia's mutual security interests. It is also essential, as NATO and Russia work together where we can, that NATO retain its independent ability to decide and act on important security issues.

But as NATO enlarges, and as NATO builds a new relationship with Russia, we must not forget that NATO is fundamentally a military alliance. And NATO's credibility and ability to prevent war depends critically on its military strength.

A key objective for the Prague summit should be to launch a military transformation agenda. One that can have profound implications. During the Cold War we sized and shaped our forces against specific geographic threats. Yet, the only Article V attack in NATO's history came from an unexpected source, in an unexpected form. What this tells us is that our old assumptions, our old plans, and our old capabilities are out-of-date. Article V threats can come from anywhere, in many forms.

Rather than trying to guess which enemy the Alliance will confront years or decades from now, or where that may occur, we should focus on what capabilities adversaries could use against us, on shoring up our own vulnerabilities, and on exploiting new capabilities to extend our military advantages. That is the essence of a capabilities-based approach to defense planning.

We are in a new era, facing new risks, and we must have new capabilities.

To conclude, let me emphasize that at the heart of NATO's success and its ability to play such a crucial role in greatly changed circumstances over such a long period of time is not only its military strength but the values that are at the core of this alliance. What Ronald Reagan once called "man's instinctive desire for freedom and self-determination" has brought about extraordinary and wonderful change over the last twenty years -- the end of the Cold War and of the tragic division of Europe, the demise of totalitarian and authoritarian regimes, on both sides of the Cold War divide. And today, the desire for freedom is a powerful force in the war on terrorism.

The democracies of the world govern by the rule of law and the consent of the governed. The Taliban, like other tyrants, ruled by terror. It is not an accident that every state that sponsors terrorism also terrorizes its own people.

And that is one of their fundamental weaknesses.

The desire for freedom and self-government is also what has held this Alliance together for more than half a century. As President Reagan said on the 40th anniversary of the D-Day Invasion: "We are bound today by what bound us [then] -- the same loyalties, traditions, beliefs. We were with you then; we are with you now. Your hopes are our hopes; and your destiny is our destiny."

That spirit is alive and strong twenty years later. I had the distinct pleasure just a few days ago of meeting with the members of the crew of the German Navy destroyer, the Lutjens. Just two weeks after September 11th, the destroyer Lutjens asked for permission to come alongside the USS Winston Churchill in the English Channel. When Lutjens drew close enough, the U.S. sailors were moved to see an American flag flying at half-mast. As they drew even closer, our men could see the entire Lutjens crew manning the rails in their dress uniforms, displaying a handmade sign that said, "We Stand By You." One young American Naval officer, calling it "the most powerful thing I have ever seen in my entire life," reported back home: "...there was not a dry eye on the bridge as they stayed alongside us for a few minutes and we cut our salutes. ...The German Navy did an incredible thing for this crew.... To see the unity that is being demonstrated throughout Europe and the world makes us all feel proud to be out here doing our job."

As an alliance, we have never been stronger. We have never been more united. We have never been more resolved to move forward together. Let us make this journey with the promise of one ally's sailors to another: "we stand by you."

Thank you very much.