From the transcript: (h/t Laura Rozen at The Cable)

Q: President Bush framed the war on terror conceptually in a way that was very broad, "war on terror," and used sometimes certain terminology that the many people -- Islamic fascism. You've always framed it in a different way, specifically against one group called al Qaeda and their collaborators. And is this one way of --

THE PRESIDENT: I think that you're making a very important point. And that is that the language we use matters. And what we need to understand is, is that there are extremist organizations -- whether Muslim or any other faith in the past -- that will use faith as a justification for violence. We cannot paint with a broad brush a faith as a consequence of the violence that is done in that faith's name.

And so you will I think see our administration be very clear in distinguishing between organizations like al Qaeda -- that espouse violence, espouse terror and act on it -- and people who may disagree with my administration and certain actions, or may have a particular viewpoint in terms of how their countries should develop. We can have legitimate disagreements but still be respectful. I cannot respect terrorist organizations that would kill innocent civilians and we will hunt them down.

But to the broader Muslim world what we are going to be offering is a hand of friendship.

Q: Can I end with a question on Iran and Iraq then quickly? ...

Q: Will the United States ever live with a nuclear Iran? And if not, how far are you going in the direction of preventing it?

THE PRESIDENT: You know, I said during the campaign that it is very important for us to make sure that we are using all the tools of U.S. power, including diplomacy, in our relationship with Iran.

Now, the Iranian people are a great people, and Persian civilization is a great civilization. Iran has acted in ways that's not conducive to peace and prosperity in the region: their threats against Israel; their pursuit of a nuclear weapon which could po