Key Points:

US Secretary of State Condoleezza Rice was not the only person to call New Zealand an 'ally' today.

Former Prime Minister Jim Bolger used the word, too, when he spoke at a reception tonight for Rice hosted by the NZ-US Council which he chairs.

Bolger referred to Rice's concept of 'transformational diplomacy' – which he described as the US working with partners around the world to create well governed, sustainable democratic states.

'In New Zealand you can find no better ally for this purpose whether in Afghanistan or much closer to home here in the Pacific. '

And Bolger also raised a few eyebrows with his salutory reference to Barack Obama's speech [to 200,000 people] in Berlin this week.

'I want to conclude and borrow and paraphrase a line from the soaring rhetoric of Senator Obama in Berlin two days ago and say that any remaining walls between old friends and allies, the United States and New Zealand, should now come down.'

Rice called New Zealand an 'ally' during a press conference with New Zealand Prime Minister Helen Clark.

'New Zealand is certainly seen as a friend and an ally,' she said in a surprising departure from the 'friend' status held since the Anzus rift in 1984.

She made her comment in response to a question asking whether military exercises between the two countries would resume and whether New Zealand was a friend or an ally.

Her predecessor, Colin Powell, referred to New Zealand  in 2002 as 'very, very, very close friends.'

Rice's reference could have been no slip of the tongue.

She  will have been in no doubt as to the importance New Zealand places on the term 'ally' – that it denotes membership of an elite club of friends.

It seems likely that use of the term today, suitably reinforced by the elder-statesman Bolger, is not a a sign that the US wants to re-admit New Zealand to that club but that it wants to redefine the term for the 21st century.

At a press conference at Government House in Auckland, when asked whether the nuclear issue was a "relic" she said: "As to past disputes, the United States and New Zealand have I think moved on and if there are remaining issues to be addressed, then we should try to address them."

"This is a very broad and deepening relationship and it is going to continue to be so and it by no means a relationship that is somehow harnessed to or constrained by the past."

When asked if the US should lift its ban on defence forces exercising together, she said:

"The relationship is not stuck in the past and there have been a lot of changes in the world since that time. And if there are remaining issue to be addressed then I think we have got to find a way to address them because the relationship between New Zealand and the United States is such a beneficial one and such a fruitful one for co-operation along a wide range of issues."

Rice held her press conference with Foreign Minister Winston Peters after talks here and they are now off lunching together before Rice joins Helen Clark for talks. [We are scoffing a dozen pizzas ordered by the US embassy].

And what a difference a night makes. Peters was composed and charming in stark contrast to his abysmal press conference yesterday where he failed to address reasonable questions about Bob Jones' donation to his party.

It is unfortunate that his domestic political turmoil has infected the Rice visit.

It could have been avoided if Peters had taken a measured approach to the secret donations story and upon his return to New Zealand yesterday acknowledged they were serious issues with serious implications, that he needed to talk to brother and officials about it after Dr Rice had left and that he would report fully and frankly at Parliament next week.

Instead, he finished yesterday's press conference in worse shape than he began, fuelling the story, inflaming Bob Jones who has now accused of lying and so it came up at the Rice press conference.

TV3's Duncan Garner asked him what he thought about Bob Jones having accused him last night of lying.

Peters: "I can't wait to get down to Parliament next week and to deal with the three versions of Bob Jones' stories from Bob Jones. But I want to deal with this matter today which is so much more important.

"Next week you'll get all the answers you need. But all I would ask you to do in the meantime is find out which of the three versions that Bob Jones has given you you believe and today I would like to concentrate on a very, very serious visit to this country and on important issues to do with our relationship in the 21st century. "

He turned to Rice and said she need not answer that question. Much jocularity.

Both the thaw and the Peters-donations issue is bound to come up again when Clark and Rice hold their press conference. soon.