• With: Aaron Cohen, IMS Security Founder

    This is a rush transcript from "Your World," January 22, 2013. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: In the meantime, three Americans killed in the attack in Algeria -- now a report that weapons from Libya were used in that raid. Libya's described as an ammunitions supermarket for terrorists, reasons why terror expert Aaron Cohen says the nation shouldn't get another cent of U.S. aid.

    But it does, even now. Why?

    AARON COHEN, FOUNDER, IMS SECURITY: Well, I mean, Neil, the problem here is that we are sending millions, if not billions of dollars into Libya. The aid to this country needs to be cut off.

    And the reason why is because the attack that we just saw in this natural gas factory or refinery, which happens to sit on the Libyan border, the weapons that were recovered by the Algerian security forces were the exact same Kalashnikov rifles, the exact same Belgian-made land mines, and the exact same C-5 anti-tank rocket launchers that were made so famous by the Libyan militias on the back of the pickup trucks.

    These weapons, these exact weapons and models were recovered by the Algerian security forces, which means they came from the stockpiles that had been amassed by Muammar Qaddafi and then looted by arms traffickers, and now are freely moving back and forth on these -- on this North African border, which is completely wide open for these traffickers and these militias.

    CAVUTO: Leaving aside our pouring good money after bad in a region to which we have committed over the years tens of billions of dollars and just even in the case of Egypt then give money to the new government that hates us even more, I am wondering, in light of today's developments where Benjamin Netanyahu has to form a coalition government, not nearly as popular as it was before this latest parliamentary election, lay out how the Middle East looks right now.

    COHEN: You know, it's as tricky now as it's always been.

    The Netanyahu government is obviously struggling due to its -- due to the trickiness of the situation. Having said that, though, you know, I think Bibi is a very clever politician and he has got a lot of experience in the region. And he is also a highly decorated soldier coming out of Israel, and he's a very strong leader for the Israelis.

    And I think he is going to be OK, given the climate of the security situation. That's why Israel likes to have Bibi in power, and that's why he continues to get re-elected. It's because he represents that security, which they know is going to be no-nonsense.

    CAVUTO: Well, I take nothing away from a victory. After all, they say it's not the size of the victory. It's just whether you have a W. or an L. after your name.

    And he will have a W. when all is said and done. But he will be dealing with a president who, the argument goes, has not been very supportive, or, for that matter, with whom each leader views the other with some cynicism.

    So, I guess what I am asking, going forward is what you think will be our extended policy toward the Middle East, whether we pour good money after bad in places like Libya and Egypt, et cetera, or whether we reassess it entirely.

    COHEN: I think that there is going to be an entire reassessment, Neil, about putting money into places that are going to -- that are going to continue to be a threat to our national security.

    In regards to Israel, though, obviously, Israel is America's strongest ally. It's their forward operating base in the region in the Middle East. We share information, we share intelligence, we share technology, we share training. We have a joint counterterrorism center in Israel where Americans come and train. And we have had an open flow of information.

    I think that at the end of the day, the entire policy needs to be focused on the countries and will continue to be focused on the countries that are the true ally or the -- the asset to America, which is Israel. And I think, again, countries like Libya and these other -- and other countries that just don't have a grip on their security, it's a problem, and they need to be looked at very closely. And the aid and the funding needs to be retracted.

    CAVUTO: All right, Aaron, thank you very, very much -- Aaron Cohen.

    Content and Programming Copyright 2013 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2013 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.