• This is a rush transcript from "Your World With Neil Cavuto," June 19, 2009. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: Well, their supreme leader all but telling them to shut up, but Iranian protesters will not stand down. And now the White House says, don't stand down; let them protest. And now, for an entire Middle East on tenterhooks, let her rip?

    Welcome, everybody. I'm Neil Cavuto.

    And how is this all that different from this? Tiananmen Square 20 years ago, thousands of pro-democracy demonstrators reportedly killed as the government cracks down after issuing a warning — Remember the warning? — cease and desist.

    Are we seeing the same thing happening right now, two decades later, in Iran, as the supreme leader issues this warning?

    (BEGIN VIDEO CLIP)

    AYATOLLAH ALI KHAMENEI, SUPREME LEADER OF IRAN (through translator): I am asking everyone to end this method. This is not a correct way. If they won't put an end to the methods, they will be responsible for its aftermaths and crisis.

    (END VIDEO CLIP)

    Video: Watch Cavuto's interview with Senator John McCain

    CAVUTO: Well, meanwhile, the House in the United States issuing its own resolution condemning Tehran's crackdown on the very same day that Senator John McCain took the administration to task for not speaking out more against the crackdown.

    The senator, the former presidential nominee, joining me right now from Capitol Hill.

    Senator, good to have you.

    SEN. JOHN MCCAIN (R), ARIZONA: Hi, Neil. How are you?

    CAVUTO: The administration did say, if people wanted to protest there, that it is their right, that is their want, they should. What do you think of that?

    MCCAIN: Well, I think it is a movement in the right direction, from saying they don't want to meddle, and their basically hands-off position that they have taken.

    But I think that there should be a solid statement, such as one we just passed through the United States Senate, that all — all of us have certain basic human rights, and they should be allowed to exercise them, and that we should support people's right to protest without being beaten and killed in the streets of Tehran and cities all over Iran.

    CAVUTO: All right. So, yours is obviously much more strongly-worded, but to what extent can this administration go? I mean, the rap against U.S. involvement in Iran, whether it was through support of the shah that brought Khomeini and back and forth, is that anything we say or do could complicate things and make them worse.

    What do you think of that?

    MCCAIN: I think it is — it's the height of — frankly, it's a betrayal of what was declared on the 4th of July 1976, that all of us are endowed with certain inalienable rights.

    And one of those rights is to be able to disagree with your government peacefully, and not be subject to beatings and killing in the streets of — of any country. And, by the way, we sent an envoy over to Iran to tell the shah of Iran that we had to leave.

    But, look, the point is that, all during the Cold War, there was the liberal elites who said we should not do anything to upset the Russians, whether it be the Prague Spring or the workers in Poland, in Gdansk.

    And there was Ronald Reagan who, said, "Take down this wall," called them an evil empire, said he is ready to negotiate, but we have a fundamental right and respect of human rights.

    And to say we don't want to — quote — "meddle," of course, is — is — is not in keeping with that tradition in any way. In fact, it's a direct contradiction of it.

    CAVUTO: Let me ask you, Senator, if you were president right now, and you heard the supreme leader in Iran effectively telling these protesters, knock it off, or there is going to be trouble, what would you say? What would you do?

    MCCAIN: I would say, we support the rights of all human beings, especially those in Iran who want to peacefully protest and disagree with their government. We support those fundamental, inalienable rights.

    In 1832, I believe it was — or 1823 — Daniel Webster defended the rights to the Greeks to rise up against their oppressors. It is a long tradition and should be adhered to. And to say that, somehow, that we will harm our ability to negotiate means that we are giving a green light to oppressive governments.

    And this certainly is an oppressive one.

    CAVUTO: All right. So, let's say the commander, supreme leader, ayatollah hears is, Senator, and says, "Well, that is all well and good, but I'm going through with this. I'm cracking down on these guys."

    And it could be a very ugly, bloody weekend. What is the United States to do then? What is our posture going to be? How do we move forward? Because this could get very bloody.

    MCCAIN: Well, you know, and there may be those indications, since the supreme leader said that they were not going to tolerate further demonstrations in the street.

    If they do, we have to judge it by what the situation as it unfolds. By the way, the French president, the German chancellor, and the British prime minister far more strong in their words in support of these protesters than the president of the United States. Interesting turnaround.

    CAVUTO: Yes.

    You know, I know you are not a market wonk. You're not that nerdy. But I am, Senator. And the markets have, by and large, here and there ignored this, do you think to their detriment, to their peril? They are obviously not thinking this is going to amount to much.

    So, oil prices really have not moved. Markets have not moved. Are they whistling past the graveyard? What — what do you think?

    MCCAIN: I don't know.

    I think, when the president failed to support the protesters and their peaceful, basic human rights, he was walking on the other side of the street. I don't know how the market reacts over time. I know that they're very dispassionate.

    But, clearly, if this disrupts relations over time with Iran, it could have some effects on — on the Persian Gulf, where a lot of the world's oil supply is concerned. But the markets are not known for their humanitarian ideals. But the American people are.

    CAVUTO: Yes.

    (LAUGHTER)

    CAVUTO: You're saying that they — they — they might be a little too sanguine. I understand what you are saying.