OLYMPIA, Wash. – Gov. Chris Gregoire pledged Monday to work with the Legislature to pass property-tax limits if the courts throw out the voter-approved Initiative 747.

"She knows how radioactive this is," said I-747 sponsor Tim Eyman, who was unhappy with Gregoire's decision not to simply re-enact the 1 percent limit that voters adopted. He said he'll rerun a 1 percent initiative if the courts toss out I-747.

The governor also expressed alarm about the potential of North Korean missiles reaching Seattle, and called for withdrawal of troops of Iraq "as timely as we possibly can." It was her first comment on Iraq, which has divided her party.

Gregoire also complained about a new federal requirement that 760,000 Washington Medicaid recipients prove their citizenship by July 1 or face being cut from the federal rolls.

A King County Superior Court judge last week threw out I-747, Eyman's 2001 initiative that limits annual property tax hikes to 1 percent. The previous cap was 6 percent a year.

The state is appealing, but it's not certain how quickly the case will be resolved by the state Supreme Court.

But Democrat Gregoire said if the ruling eventually goes against the I-747 limits, she will work with both parties in the Legislature to reach a compromise.

She declined to state a position on the correct percentage, but indicated that perhaps neither the old number nor the 1 percent cap is the best solution.

The 6 percent, she said, clearly begins to tax people out of their homes and the 1 percent limit appears to cause cutbacks on core local services that people need.

"I think we need to have an open discussion about this," she told a wide-ranging news conference. "We need to have a delicate balance here. We need to make sure people can afford to pay their property taxes and we need security for those homes, whether that's firefighting or law enforcement possibilities.

"I clearly do not believe 6 percent is anything the public at large, particularly our lower income and our first home owners, can afford.

"I will be looking to my colleagues in the Legislature ... to find some continuing relief from the tax burden on property taxes."

Eyman said it a "mother-knows-best" plan by Gregoire because she wants to substitute a more liberal property tax cap.

"Voters said 1 percent. One percent means 1 percent. I know that sounds like a broken record," he said in an interview. "Voters find it galling to hear elected officials say they know better."

Eyman said he's convinced that I-747 will pass judicial muster on appeal and that Gregoire's negotiations with the Legislature will never be needed.

"For her, it's 'Message: I care,"' he said. "It's window dressing and will all be moot."

Gregoire touched on other topics:

—IRAQ. The governor made what she described as her first remarks on Iraq, saying she was prompted by "the very disturbing news of North Korea and a three-stage rocket that literally could reach Seattle."

She said that underscores the need for security to "be at the forefront of our thinking and our attention. ... It also tells me very clearly that it is very important that we, as timely as we possibly can, insure that we are turning Iraq over to the Iraqi people and bringing our troops home so that they are ready and prepared to do whatever is necessary to defend this country.

"I am disturbed by what we are hearing (about Korea). ... To me, this points out that we need to bring our troops home. This is another wake up call."

—MEDICAID. Gregoire said Washington and other states are pushing back against new federal guidelines on a requirement to prove the citizenship of all federally enrolled Medicaid recipients, including those in nursing homes. She said it will be a hardship for many patients, including tribal members who have learned that they cannot rely on federal identity cards and must produce birth certificates.

Gregoire said the state will have to spend $5 million verifying citizenship and that the government won't reimburse the state. She said the state has no reason to believe that illegal immigrants are covered by the federal government, although the state does pay for about 9,000 children of undocumented workers.

—BRITISH COLUMBIA. Gregoire planned to travel to Vancouver, British Columbia, for a meeting with Premier Gordon Campbell and his cabinet on Tuesday. Border security, economic development, tourism, and pandemic flu are among the items of discussion, she said.