The following is a rush transcript of the November 28, 2010, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, ANCHOR: I'm Chris Wallace, and this is "Fox News Sunday." Showdown with North Korea -- how will Washington handle the latest crisis? And how should the U.S. bring terror detainees to justice? We'll get the latest on foreign and domestic flash points from two leading senators, Republicans Lindsey Graham, and Democrat Claire McCaskill.

Then, the president talks turkey this week with congressional leaders of both parties. We'll ask our Sunday group if compromises are possible on the Bush tax cuts and the new START treaty.

And our Power Player of the Week -- how about this for a Christmas present, all right now on "Fox News Sunday."

And hello again from Fox News in Washington. We are headed into a big week here in the nation's capital -- the growing confrontation with North Korea, a presidential summit with the new congressional leaders, and the debt commission finishes its work.

Joining us to discuss it all are two key senators. From his home state of South Carolina, Republican Lindsey Graham. And from her home state of Missouri, Democrat Claire McCaskill.

And, Senators, welcome back to "Fox News Sunday."

SEN. LINDSEY GRAHAM, R-S.C.: Thank you.

SEN. CLAIRE MCCASKILL, D-MO.: Thanks, Chris.

WALLACE: Let's start with Korea. The U.S. and South Korea began naval exercises today in the Yellow Sea, ignoring protests from both North Korea and China. You are both members of the Senate Arms Services Committee.

How should the U.S. deal with the growing threat of North Korea, from North Korea? And how should we respond to China's new call for emergency talks?

Senator Graham, why don't you start?

GRAHAM: Well, number one, you go forward with the exercises. You don't flinch. You know, this is a very unstable regime who stays in power through fear and intimidation. And there'll come a day where the people in North Korea are so frustrated they will act.

But what I worry about is South Korea. I worry about this democracy that we support in South Korea. How much more will they take? China has a chance to change the feature of the Korean peninsula. I'm looking at China to step up their game against North Korea and try to get -- bring them in the fold of a peaceful nation.

So I think we should push China hard and keep the sanctions on North Korea.

WALLACE: Senator McCaskill, really, the same questions to you. How should we deal with North Korea? And you know, China plays this game where they say, "Oh, let's have these talks," but they never really put any pressure on North Korea.

GRAHAM: Right.

WALLACE: Is it time to give up, Senator McCaskill, on China ever restraining the regime in Pyongyang?

MCCASKILL: No, I don't think so. I mean, China obviously borders on this country, and I think China calling for a resuming of the six-party talks is important. Typically, we've been, you know, wanting six-party talks and China has not been as enthusiastic, so I think that's a good sign.

I agree with Lindsey. We need to continue the exercises. We need to take a very strong stand. This is brazen and it's belligerent and it's something that I believe that all of those six countries -- all of the people in the six-party talks need to get to work on, including Russia, I might add, which is why the START treaty is also important here.

WALLACE: Well, that brings me in to my next subject, which is kind of complicated, but Wikileaks. The Wikileaks Web site...

GRAHAM: Yeah.

WALLACE: ... is expected to engage in another massive document dump, this time of State Department cables, within the next 24 hours.

Senator Graham, there is speculation that among the classified documents that are going to be released are embarrassing assessments of Russian leaders, possibly secrets from negotiations with the Russians on arms control.

Really, two questions. One, what do you make of this latest Wikileaks document dump? And secondly, what impact could it -- if it does have this kind of information about the Russians and arms control negotiations, what information could it -- or impact could it have on ratification of the START treaty?

GRAHAM: Well, one, leaking the material is deplorable. I agree with the Pentagon's assessment that people at Wikileaks could have blood on their hands. How they affect START negotiations, I really don't know.

I do know this, that it would be good for the United States and Russia to enter into the START treaty if it is a good treaty. The question for me -- are we sure, are we absolutely certain, that we can proceed with missile defense development apart from the START treaty.

It is my belief you cannot allow the START treaty to interfere with the missile defense of this nation. We are at risk here from Iran, North Korea and other actors. I don't know what the cables may say, but it's just we're at war.

I mean, the world is getting dangerous by the day. And people who do this are low on the food chain as far as I'm concerned. If you can prosecute them, let's try.WALLACE: Well, you talk -- you talk about missile defense. I mean, yes, there is some language in the preamble which...

GRAHAM: Yeah.

WALLACE: ... is non-binding.

GRAHAM: Right.

WALLACE: But the administration says that doesn't in any way bind the U.S. And you had all these Republican wise men like Henry Kissinger and former secretary of state Baker come and say that they think...

GRAHAM: Right.

WALLACE: ... START's important. Why doesn't that persuade you?

GRAHAM: Well, Jon Kyl is a wise man, and he has brought up a very good point. The preamble to the START treaty negotiated with Ellen Tauscher and the Russians indicates that the Russians could withdrawal from the treaty if we develop the fourth stage of missile defense.

Here's a simple question. Are the Russians looking at that preamble as a provision that prevents us from developing strategic missile defense systems? If it -- if it's going to be interpreted by the Russians that way, I need to know before I vote.

If the Russians says -- say that they will withdraw from the treaty if we develop strategic missile defense systems, I need to know that.If they that it doesn't mean that, then I think we're a lot closer to the treaty being enacted.