Tomorrow the United States will join the Soviet Union and 33 other nations at a European disarmament conference in Stockholm. The conference will search for practical and meaningful ways to increase European security and preserve peace. We will be in Stockholm with the heartfelt wishes of our people for genuine progress.

We live in a time of challenges to peace, but also of opportunities to peace. Through times of difficulty and frustration, America's highest aspiration has never wavered. We have and will continue to struggle for a lasting peace that enhances dignity for men and women everywhere.

I believe that 1984 finds the United States in the strongest position in years to establish a constructive and realistic working relationship with the Soviet Union. We've come a long way since the decade of the seventies, years when the United States seemed filled with self-doubt and neglected its defenses, while the Soviet Union increased its military might and sought to expand its influence by armed forces and threat.

Over the last 10 years, the Soviets devoted twice as much of their gross national product to military expenditures as the United States, produced six times as many ICBM's, four times as many tanks, twice as many combat aircraft. And they began deploying the SS - 20 intermediate-range missile at a time when the United States had no comparable weapon.

History teaches that wars begin when governments believe the price of aggression is cheap. To keep the peace, we and our allies must be strong enough to convince any potential aggressor that war could bring no benefit, only disaster. So, when we neglected our defenses, the risks of serious confrontation grew.

Three years ago, we embraced a mandate from the American people to change course, and we have. With the support of the American people and the Congress we halted America's decline. Our economy is now in the midst of the best recovery since the sixties. Our defenses are being rebuilt, our alliances are solid, and our commitment to defend our values has never been more clear.

America's recovery may have taken Soviet leaders by surprise. They may have counted on us to keep weakening ourselves. They've been saying for years that our demise was inevitable. They said it so often they probably started believing it. Well, if so, I think they can see now they were wrong.

This may be the reason that we've been hearing such strident rhetoric from the Kremlin recently. These harsh words have led some to speak of heightened uncertainty and an increased danger of conflict. This is understandable but profoundly mistaken.

Look beyond the words, and one fact stands out: America's deterrence is more credible, and it is making the world a safer place -- safer because now there is less danger that the Soviet leadership will underestimate our strength or question our resolve.

Yes, we are safer now, but to say that our restored deterrence has made the world safer is not to say that it's safe enough. We're witnessing tragic conflicts in many parts of the world. Nuclear arsenals are far too high, and our working relationship with the Soviet Union is not what it must be. These are conditions which must be addressed and improved.

Deterrence is essential to preserve peace and protect our way of life, but deterrence is not the beginning and end of our policy toward the Soviet Union. We must and will engage the Soviets in a dialog as serious and constructive as possible -- a dialog that will serve to promote peace in the troubled regions of the world, reduce the level of arms, and build a constructive working relationship.

Neither we nor the Soviet Union can wish away the differences between our two societies and our philosophies, but we should always remember that we do have common interests and the foremost among them is to avoid war and reduce the level of arms.

There is no rational alternative but to steer a course which I would call credible deterrence and peaceful competition. And if we do so, we might find areas in which we could engage in constructive cooperation. Our strength and vision of progress provide the basis for demonstrating with equal conviction our commitment to stay secure and to find peaceful solutions to problems through negotiations. That's why 1984 is a year of opportunities for peace.

But if the United States and the Soviet Union are to rise to the challenges facing us and seize the opportunities for peace, we must do more to find areas of mutual interest and then build on them.

I propose that our governments make a major effort to see if we can make progress in three broad problem areas. First, we need to find ways to reduce, and eventually to eliminate, the threat and use of force in solving international disputes.

The world has witnessed more than 100 major conflicts since the end of World War II. Today there are armed conflicts in the Middle East, Afghanistan, Southeast Asia, Central America, and Africa. In other regions, independent nations are confronted by heavily armed neighbors seeking to dominate by threatening attack or subversion. Most of these conflicts have their origins in local problems, but many have been exploited by the Soviet Union and its surrogates. And, of course, Afghanistan has suffered an outright Soviet invasion.

Fueling regional conflicts and exporting violence only exacerbate local tensions, increase suffering, and make solutions to real social and economic problems more difficult. Further, such activity carries with it the risk of larger confrontations. Would it not be better and safer if we could work together to assist people in areas of conflict in finding peaceful solutions to their problems? That should be our mutual goal.

But we must recognize that the gap in American and Soviet perceptions and policy is so great that our immediate objective must be more modest. As a first step, our governments should jointly examine concrete actions that we both can take to reduce the risk of U.S.-Soviet confrontation in these areas. And if we succeed, we should be able to move beyond this immediate objective.

Our second task should be to find ways to reduce the vast stockpiles of armaments in the world. It's tragic to see the world's developing nations spending more than $150 billion a year on armed forces -- some 20 percent of their national budgets. We must find ways to reverse the vicious cycle of threat and response which drives arms races everywhere it occurs.

With regard to nuclear weapons, the simple truth is America's total nuclear stockpile has declined. Today we have far fewer nuclear weapons than we had 20 years ago, and in terms of its total destructive power, our nuclear stockpile is at the lowest level in 25 years.

Just 3 months ago, we and our allies agreed to withdraw 1,400 nuclear weapons from Western Europe. This comes after the withdrawal of 1,000 nuclear weapons from Europe 3 years ago. Even if all our planned intermediate-range missiles have to be deployed in Europe over the next 5 years -- and we hope this will not be necessary -- we will have eliminated five existing nuclear weapons for each new weapon deployed.

But this is not enough. We must accelerate our efforts to reach agreements that will greatly reduce nuclear arsenals, provide greater stability, and build confidence.

Our third task is to establish a better working relationship with each other, one marked by greater cooperation and understanding. Cooperation and understanding are built on deeds, not words. Complying with agreements helps; violating them hurts. Respecting the rights of individual citizens bolsters the relationship; denying these rights harms it. Expanding contacts across borders and permitting a free exchange or interchange of information and ideas increase confidence; sealing off one's people from the rest of the world reduces it. Peaceful trade helps, while organized theft of industrial secrets certainly hurts.

Cooperation and understanding are especially important to arms control. In recent years we've had serious concerns about Soviet compliance with agreements and treaties. Compliance is important because we seek truly effective arms control. However, there's been mounting evidence that provisions of agreements have been violated and that advantage has been taken of ambiguities in our agreements.

In response to a congressional request, a report on this will be submitted in the next few days. It is clear that we cannot simply assume that agreements negotiated will be fulfilled. We must take the Soviet compliance record into account, both in the development of our defense program and in our approach to arms control.

In our discussions with the Soviet Union, we will work to remove the obstacles which threaten to undermine existing agreements and a broader arms control process. Examples I've cited illustrate why our relationship with the Soviet Union is not what it should be. We have a long way to go, but we're determined to try and try again. We may have to start in small ways, but start we must.

In working on these tasks, our approach is based on three guiding principles -- realism, strength, and dialog. Realism means we must start with a clear-eyed understanding of the world we live in. We must recognize that we are in a long-term competition with a government that does not share our notions of individual liberties at home and peaceful change abroad. We must be frank in acknowledging our differences and un- afraid to promote our values.

Strength is essential to negotiate successfully and protect our interests. If we're weak, we can do neither. Strength is more than military power. Economic strength is crucial, and America's economy is leading the world into recovery. Equally important is our strength of spirit and unity among our people at home and with our allies abroad. We're stronger in all these areas than we were 3 years ago. Our strength is necessary to deter war and to facilitate negotiated solutions. Soviet leaders know it makes sense to compromise only if they can get something in return. Well, America can now offer something in return.

Strength and dialog go hand in hand, and we're determined to deal with our differences peacefully through negotiations. We're prepared to discuss the problems that divide us and to work for practical, fair solutions on the basis of mutual compromise. We will never retreat from negotiations.

I have openly expressed my view of the Soviet system. I don't know why this should come as a surprise to Soviet leaders who've never shied from expressing their view of our system. But this doesn't mean that we can't deal with each other. We don't refuse to talk when the Soviets call us imperialist aggressors and worse, or because they cling to the fantasy of a Communist triumph over democracy. The fact that neither of us likes the other system is no reason to refuse to talk. Living in this nuclear age makes it imperative that we do talk. Our commitment to dialog is firm and unshakeable, but we insist that our negotiations deal with real problems, not atmospherics.

In our approach to negotiations, reducing the risk of war, and especially nuclear war, is priority number one. A nuclear conflict could well be mankind's last. And that is why I proposed over 2 years ago the zero option for intermediate-range missiles. Our aim was and continues to be to eliminate an entire class of nuclear arms. Indeed, I support a zero option for all nuclear arms. As I've said before, my dream is to see the day when nuclear weapons will be banished from the face of the Earth.

Last month the Soviet Defense Minister stated that his country would do everything to avert the threat of war. Well, these are encouraging words, but now is the time to move from words to deed. The opportunity for progress in arms control exists. The Soviet leaders should take advantage of it.

We have proposed a set of initiatives that would reduce substantially nuclear arsenals and reduce the risk of nuclear confrontation.

The world regrets -- certainly we do -- that the Soviet Union broke off negotiations on intermediate-range nuclear forces and has not set a date for the resumption of the talks on strategic arms and on conventional forces in Europe. Our negotiators are ready to return to the negotiating table to work toward agreements in INF, START, and MBFR. We will negotiate in good faith. Whenever the Soviet Union is ready to do likewise, we'll meet them halfway.

We seek to reduce nuclear arsenals and to reduce the chances for dangerous misunderstanding and miscalculations, so we have put forward proposals for what we call confidence-building measures. They cover a wide range of activities. In the Geneva negotiations, we proposed to exchange advance notification of missile tests and major military exercises. Following up on congressional suggestions, we also proposed a number of ways to improve direct channels of communications. Last week, we had productive discussions with the Soviets here in Washington on improving communications, including the hotline.

Now these bilateral proposals will be broadened at the conference in Stockholm. We're working with our allies to develop practical, meaningful ways to reduce the uncertainty and potential for misinterpretation surrounding military activities and to diminish the risk of surprise attack.

Arms control has long been the most visible area of U.S.-Soviet dialog. But a durable peace also requires ways for both of us to diffuse tensions and regional conflicts.

Take the Middle East as an example. Everyone's interest would be served by stability in the region, and our efforts are directed toward that goal. The Soviets could help reduce tensions there instead of introducing sophisticated weapons into the area. This would certainly help us to deal more positively with other aspects of our relationship.

Another major problem in our relationship with the Soviet Union is human rights. Soviet practices in this area, as much as any other issue, have created the mistrust and ill will that hangs over our relationship. Moral considerations alone compel us to express our deep concern over prisoners of conscience in the Soviet Union and over the virtual halt in the emigration of Jews, Armenians, and others who wish to join their families abroad.

Our request is simple and straightforward: that the Soviet Union live up to its obligations. It has freely assumed those obligations under international covenants, in particular its commitments under the Helsinki accords.

Experience has shown that greater respect for human rights can contribute to progress in other areas of the Soviet-American relationship. Conflicts of interest between the United States and the Soviet Union are real, but we can and must keep the peace between our two nations and make it a better and more peaceful world for all mankind.

Our policy toward the Soviet Union -- a policy of credible deterrence, peaceful competition, and constructive cooperation -- will serve our two nations and people everywhere. It is a policy not just for this year, but for the long term. It's a challenge for Americans; it is also a challenge for the Soviets. If they cannot meet us halfway, we will be prepared to protect our interests and those of our friends and allies.

But we want more than deterrence. We seek genuine cooperation. We seek progress for peace. Cooperation begins with communication. And, as I've said, we'll stay at the negotiating tables in Geneva and Vienna. Furthermore, Secretary Shultz will be meeting this week with Soviet Foreign Minister Gromyko in Stockholm. This meeting should be followed by others, so that high-level consultations become a regular and normal component of U.S.-Soviet relations.

Our challenge is peaceful. It will bring out the best in us. It also calls for the best in the Soviet Union. We do not threaten the Soviet Union. Freedom poses no threat. It is the language of progress. We proved this 35 years ago when we had a monopoly on nuclear weapons and could have tried to dominate the world, but we didn't. Instead, we used our power to write a new chapter in the history of mankind. We helped rebuild war-ravaged economies in Europe and the Far East, including those of nations who had been our enemies. Indeed, those former enemies are now among our staunchest friends.

We can't predict how the Soviet leaders will respond to our challenge. But the people of our two countries share with all mankind the dream of eliminating the risk of nuclear war. It's not an impossible dream, because eliminating these risks are so clearly a vital interest for all of us. Our two countries have never fought each other. There's no reason why we ever should. Indeed, we fought common enemies in World War II. Today our common enemies are poverty, disease, and above all, war.

More than 20 years ago, President Kennedy defined an approach that is as valid today as when he announced it. ``So let us not be blind to our differences,'' he said, ``but let us also direct attention to our common interests and to the means by which those differences can be resolved.''

Well, those differences are differences in governmental structure and philosophy. The common interests have to do with the things of everyday life for people everywhere. Just suppose with me for a moment that an Ivan and an Anya could find themselves, oh, say, in a waiting room, or sharing a shelter from the rain or a storm with a Jim and Sally, and there was no language barrier to keep them from getting acquainted. Would they then debate the differences between their respective governments? Or would they find themselves comparing notes about their children and what each other did for a living?

Before they parted company, they would probably have touched on ambitions and hobbies and what they wanted for their children and problems of making ends meet. And as they went their separate ways, maybe Anya would be saying to Ivan, ``Wasn't she nice? She also teaches music.'' Or Jim would be telling Sally what Ivan did or didn't like about his boss. They might even have decided they were all going to get together for dinner some evening soon. Above all, they would have proven that people don't make wars.

People want to raise their children in a world without fear and without war. They want to have some of the good things over and above bare subsistence that make life worth living. They want to work at some craft, trade, or profession that gives them satisfaction and a sense of worth. Their common interests cross all borders.

If the Soviet Government wants peace, then there will be peace. Together we can strengthen peace, reduce the level of arms, and know in doing so that we have helped fulfill the hopes and dreams of those we represent and, indeed, of people everywhere. Let us begin now.

Thank you.

Note: The President spoke at 10 a.m. in the East Room at the White House.