Following is an edited transcript of Fox News Sunday, Feb. 3, 2002. 

TONY SNOW, HOST, FOX NEWS SUNDAY: Now joining us with the latest on the war on terror and the administration's strategy for battling what the president calls the "axis of evil," National Security Advisor Condoleezza Rice. 

Let's begin first with the case of Daniel Pearl, the Wall Street Journal reporter. Is the government of Pakistan giving us permission to put people on the ground to assist in this investigation? 

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISOR: We're getting very good cooperation from the government of Pakistan, and we're working hard with them. Obviously, they are in the lead here. This is in Pakistan. 

We certainly hope that the kidnappers understand that they're doing, whatever cause they are promoting, no good here, and that Daniel Pearl needs to be released and released right away. 

SNOW: Pakistan's in the lead, but we may have some people on the ground? 

RICE: Well, Pakistan is being extremely cooperative. We are, as you know, working with them across a broad variety of fronts right now, and we couldn't be doing better with Pakistan in trying to solve this difficult situation. 

SNOW: What is the long-term impact, if any, of this case? 

RICE: Well, I think that it just shows that it's a rather dangerous place right now and a rather unstable place, this region of the world. 

Ultimately, the best circumstance is going to be when we can complete this mission, when Pakistan is fully stable, along the lines that President Musharraf outlined in his speech a couple of weeks ago. 

But these things do happen. They are always extremely difficult on the family, on the country. We just hope that this can come to a resolution very, very quickly. 

SNOW: Let's turn to the State of the Union address. The president talked about the axis of evil. Now, that has drawn a series of cat calls from a number of people. 

Let me first read you a quote from former Secretary of State Madeleine Albright. She was on the Today show the other day. She was asked about the "axis of evil" quote and, in particular, about talking about Iran, Iraq and North Korea together, as part of that axis of evil. 

She said, "I think it was a big mistake to lump those three countries together. Our allies are not supportive of what we are doing in Iraq or Iran or North Korea." 

SNOW: Is she right? 

RICE: I don't believe that she's right. 

This administration has probably been more successful in rallying the world and rallying a coalition against serious threats than any administration in recent memory. 

And we're going to continue to do it in the way that we're doing it, which is to speak with a kind of clarity about the threats, to pursue diplomacy, to pursue means — to use means at our disposal to deal with those threats. 

But you don't get anywhere by pulling punches about the nature of regimes like the Iraqi regime or the North Korean regime. It's not as if anybody really believes that these are good regimes that are just engaging in a little bad policy. 

The president was being very clear to the world that this is a serious threat. It's time to get serious about it, and we'll use a multiplicity of means to do that. 

SNOW: Did the previous administration pull its punches when characterizing those regimes? 

RICE: I've just said that the United States, under President George W. Bush, is not going to pull any punches. 

SNOW: Is that new? 

RICE: Well, from time to time, the United States has fallen into a tendency to soften the edges around issues like this. 

I think that we learned, all the way back with Ronald Reagan, that you don't soften the edges. You call out a threat when you see it, and there is nothing that pits diplomacy and clear talk as enemies of one another. 

We've seen in this war on terrorism that speaking plainly is the way to rally people, not the other way around. 

SNOW: Do we expect any of these nations to respond to that clear rhetoric by changing their behavior? 

RICE: Well, we will see. But this was a call not just to these regimes. It clearly put them on notice. 

And, by the way, this is not a change in policy. They've been on notice for some time. 

But it also was a call to the international community, to our friends and our allies, to do what all of us must do in terms of non- proliferation, in terms of cutting off the vehicles for these regimes to get these weapons, and the president made that very clear. 

SNOW: You mentioned our allies. Jack Straw, who's the British foreign minister, also had something to say about the president's speech, again referring to the "axis of evil" locution. He thinks it's just political. He said: "The president's State of the Union speech is best understood in the context of the midterm elections in November, it seems to me." 

Was that at all helpful? 

RICE: Look, this is not about American politics, and I assume that, when the British government speaks about foreign policy, it's not about British politics. 

This is the United States of America that bears a disproportionate responsibility for peace and security and stability in the world, speaking clearly about a threat, a call to arms to get serious about the world's most dangerous regimes getting the world's most dangerous weapons. 

SNOW: You have mentioned repeatedly, "We're speaking clearly, we're speaking frankly, we're speaking the truth." 

So, when you hear diplomats from around the world get up and criticize and say, "this is coarse, this is shocking," what are they telling you privately? 

RICE: Well, in many quarters, what we're hearing is, well, you know, "The United States is very powerful, we would — the United States is going to have to take care of some of these problems, we would like to be consulted, we want to be a part of that." 

The United States of course is going to consult and is going to work with its allies. The president said in the speech, we want to work with our allies and with our friends on these problems. 

But I would say to everyone, let's step back here, and instead of worrying so much about what the president said on Tuesday night, let's put equal energy into working to make sure that these regimes don't these weapons of mass destruction. 

SNOW: Let's figure out what the president's going to do, then. 

Before we do that, I want to touch one other sort of breaking piece of news. Yasser Arafat, chairman of the Palestinian Authority, has an op-ed piece in today's New York Times. 

Now, we've distilled a couple of quotes out of it, and I want to show them to you, and ask if this is the kind of proposal that is at all going to advance the cause of peace in the Middle East. 

Writes Chairman Arafat, "There can be no solution to the Israel-Palestinian conflict that the legitimate right of these innocent civilians" — that is, Palestinians who no longer live in what is now Israel — "continue to be ignored. Left unresolved, the refugee issue has a potential to undermine any permanent peace agreement." 

Then he turns to the issue of Jerusalem. He says, "The Palestinians have a vision of peace. It is a peace based on the complete end of the occupation and a return to Israel's 1967 borders, the sharing of Jerusalem as one open city and as the capital of two states, Palestine and Israel." 

RICE: The way to get to a final resolution of the Israeli-Palestinian conflict is through a process that is very well defined, starting with Oslo, and through a series of discussions, all the way up to mechanisms like Tenet and Mitchell. 

RICE: This is not helpful. 

SNOW: This is not helpful. 

RICE: This is not helpful. 

What Chairman Arafat needs to do is to deal with the terrorists in his midst. He knows what he needs to do. He knows that there are Hamas and Hezbollah elements around him. He knows that Karine A affair, the shipment of arms apparently purchased from Iran and shipped through Hezbollah, is a violation of the Oslo accords. 

We are asking nothing more of Chairman Arafat than we have asked of every other leader in the world. If he's going to be the leader of the Palestinian people and if he wants to achieve the vision that he's laying out here, he knows how to do it, and it begins with dealing with the terrorists in his midst. 

SNOW: So you think he has not. He says he's committed to doing it. Is that mere words for you at this point? 

RICE: We don't believe that we've seen 100 percent effort. We've never said that there has to be 100 percent result before we get back to pursuing a peace arrangement here. But he has not done enough, and it is very clear that he can do more to disable the terrorist networks. 

Terrorism is not in the service of any cause, no matter how good the cause. The Palestinian people have a process through which they can pursue their aspirations. And as their leader, Chairman Arafat really should get about the business of removing this terrorist threat so that they can get back to the peace negotiations. 

SNOW: Now, talking about the "axis of evil" again, the locution, was this purely rhetorical, or is it the president believes that the people who are running Iran, Iraq and North Korea are themselves evil? 

RICE: I would challenge anyone to say that someone who gasses his own people, as Saddam Hussein did, is not evil. That someone who starves his people while he feeds his army and pursues weapons of mass destruction and proliferates ballistic-missile technology around the world is just misguided. Or to say that in Iran, where you do have an elected part of the Iranian government, that the hopes of the Iranian people continue to be frustrated by an unelected few. It's pretty clear the nature of these regimes. 

SNOW: Are these nations a clear and present threat to us? 

RICE: They are a clear and present threat to us and to all of the responsible and civilized world, because the Iranians who spread and support terror around the world, the North Koreans who proliferate these weapons, the Iraqis who make a region of great importance to us unstable clearly are a clear and present threat to America, America's interests and America's allies. 

SNOW: Defense Secretary Donald Rumsfeld says this week, when you're dealing with threats like this that you should, quote, "rule out nothing, including the use of ground forces." Is he right, even in these countries? 

RICE: The president of the United States should never rule out options in advance. We do have a number of instruments of national power and we are employing them already. I would point to the fact, for instance, that American military power has helped to keep the Korean peninsula stable since 1953. 

So we have a lot of elements of military — of national power, not just military power. But you can't rule out anything. 

SNOW: Given present military commitments, do we have the wherewithal right now, if we so decided as a matter of national policy, to remove Saddam Hussein from power? 

RICE: The United States, working with the international community, recognizes that Saddam Hussein was a threat before September 11; he continues to be. And this is someone who has flaunted his obligations from 1991 when he was defeated in the Gulf War. 

We will see how we deal with Saddam Hussein. 

SNOW: But it's — this is purely a theoretical question. Do we have the means — if somebody said tomorrow we've got to do it, will we have the means? Or would we have to wait as we did before? 

RICE: Well, I don't think theoretical and hypotheticals are going to do us any good here. 

SNOW: All right. 

RICE: The president is looking at options concerning Saddam Hussein. 

SNOW: We have said that we want a regime change in Iraq. Do we want a regime change in Iran? 

RICE: Well, certainly in Iraq we believe that the only chance here is if you have a regime that the Iraqi people actually deserve instead of the regime that they've got, because Saddam Hussein has been very clear that he's not going to live up to his obligations. 

With Iran, we will see. I think that there is some ferment in Iran. There clearly is a part of the Iranian government that was elected. But whether this regime is going to change its behavior is really what we are looking at. 

We did have some fruitful help from the Iranians in Afghanistan. That's very clear. 

But the Iranian regime as a whole has continued to do the things that we are concerned about with Iran. 

SNOW: So that regime as a whole, we would like to — if it doesn't change its behavior, we need it to change? 

RICE: Every regime in the world needs to be responsible, and every regime in the world should be responsible to its own people. 

SNOW: A couple of things that may be bothering us. Number one, it appears perhaps — can you confirm this — that there is some porousness on the Iranian border and a fear that Al Qaeda members are escaping to sanctuary there. 

RICE: This is one of the things that we're concerned about with the Iranians, that there maybe some porousness on that border. 

We're even concerned there may be Iranian attempts to surreptitiously influence Afghan politics at a very delicate time. And the president spoke out very clearly, saying that the Iranians should not try to interfere in what is a very delicate political situation in Afghanistan. 

SNOW: In other words, in other words, stop supporting Ismail Khan? 

RICE: No, Ismail Khan is a person with whom the Iranian interim authority has contacts. He's likely to be a very important part of the Afghan government going forward, the Afghan solution going forward. 

But the Iranian government, which is obviously a neighbor of Afghanistan, will have relations with Afghanistan. No one is concerned about that. But it should be above board, it should be transparent, and it should not be a surreptitious effort to influence Afghan politics. 

SNOW: For those not keeping score at home, Ismail Khan is a very important and influential tribal leader in the western part of Afghanistan. 

Let's move on very quickly to a couple of other topics. Number one, threat level. Do we worry that there are still active Al Qaeda cells here in the United States? 

RICE: We do worry that there are active cells, terrorist cells in a number of places, possibly even in the United States. And that's why we've asked the American people to continue to be vigilant. That's why you see the kinds of security measures that you're seeing. 

Director of Homeland Security Tom Ridge works at this every day, along with the attorney general and with the FBI. And we believe we're making some progress, but this is going to be a long struggle. 

SNOW: How big a threat is cyberterror? 

RICE: Cyberterror is a threat. And I think that what we're trying to do there is to work with multiple players, and there are a lot, most of them in the private sector, of course, who have every reason also to be concerned about the ability to render our very important networks — or to disable our very important networks. 

SNOW: Do we have any recent evidence that Usama bin Laden is alive? 

RICE: We have no recent evidence that he's alive or dead. And we proceed on the premise that he probably is, and we proceed on the premise that we're going to continue to hunt him down until we eventually get him, no matter how long that takes. 

SNOW: The president the other day, in the State of the Union address, talked about a series of non-negotiable demands and they include human rights and religious tolerance. 

Is democracy a non-negotiable demand in the long run? 

RICE: In the long run, democracy is the only answer for a state that really wants to be modern and creative. States are at various places along the continuum trying to get to that goal, but the United States has to speak about the preference for democracy. 

SNOW: Well, we've talked about all of these conditions, yet none of them apply to a number of our allies, including the Saudis. Are we going to demand those of the Saudis? 

RICE: The United States cannot impose its will or culture on anyone. There are obviously different histories and cultures here. 

But we are going to speak out very forthrightly, more forthrightly than perhaps U.S. governments have in the past about the importance of these values, about our bedrock faith that this is the only way to build a modern society. And that's conversation we can have with all of our friends. 

SNOW: And do we want them to shut off the funding for madrasas in Pakistan? 

RICE: Well, we do believe that the educational system is the place to begin in creating an atmosphere of tolerance. We've learned that in the United States, and we believe it's a model for everybody. 

And it's not just the United States; there are a lot of Islamic countries that have identified this as an issue — Bahrain, Oman, Qatar, and, clearly, Musharraf, when he gave that speech a couple of weeks ago focusing very much on the educational system as the place to begin reform. 

SNOW: Final question. I'm going to throw you a hardball now. Who wins the Super Bowl? 

RICE: Well, if New England is still in it in the fourth quarter, New England may win this one. 

SNOW: That's not an answer. Who's going to win the Super Bowl? 

(LAUGHTER) 

RICE: That's as far as I can go, Tony. 

(LAUGHTER) 

SNOW: This is somebody who wants to be the NFL commissioner, and therefore is not going to risk off ticking off any team. 

RICE: That's right. 

SNOW: Condoleezza Rice, thanks for joining us. 

RICE: Thank you. 

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