Following is a transcripted excerpt from Fox News Sunday, June 2, 2002.

BRIT HUME, FOX NEWS: On Friday, the State Department said only essential diplomats would remain in India and that some 60,000 other Americans should consider leaving.

For more on all this, we're joined by India's ambassador to the United States, Lalit Mansing. Also here with questions is Fox News contributor Juan Williams, national correspondent of National Public Radio.

Good morning, Mr. Ambassador. Welcome to you, sir.

LALIT MANSING, INDIA'S AMBASSADOR TO THE U.S.: Thank you.

HUME: Your colleague from Pakistan said, upon leaving here, that you will not be in the same with room with her. What is that all about?

MANSING: No. I have very friendly relations with her. We get together...

HUME: Did you talk while you were here?

MANSING: I didn't see her, otherwise I would have greeted her. She came to my house for dinner the other day.

HUME: Oh, she did?

MANSING: Yes.

HUME: All right. Well, that's interesting to know.

Let me ask you about some of the issues that she raised. She says, for example, that you won't attend this conference, the troops amassed on the border, and that they have renounced first use of nuclear weapons. What about all that?

MANSING: Well, let's get to the bottom of this. Why did this situation arise? For the last 15 to 20 years, we've been facing terrorism coming across the borders from Pakistan. And today, we are facing a violation of our borders, terrorist groups coming in, killing our women and children, threats of use of nuclear weapons against us. We are in a situation where we have to defend our country, and that's exactly what we're doing.

HUME: Now, you heard what the president said and what your colleague from -- counterpart from Pakistan said about the stopping of those raids. In your judgment, have they stopped?

MANSING: They haven't.

HUME: And in recent days, even?

MANSING: No. This is why you probably heard a tone of exasperation in President Bush's statement saying this has to stop. He was asking President Musharraf to stop these incursions, because he had said he would stop them. He hasn't done so, so far.

HUME: And, now, what is your sense now about whether war could be avoided?

MANSING: The war can be avoided if Pakistan can be persuaded to switch off terrorism.

HUME: Now, are you prepared to -- with this massive deployment, are you prepared to go to war over these raids?

MANSING: No. War is not an option of our choice.

We've been facing a series of terrorist attacks. We have lost more than 1,000 people after September 11. And the last attack on the 14th of May was particularly gruesome, when the terrorists went to an army camp and killed, basically, women and children.

Now, our leaders have taken the line that, look, we have to respond. But we have diplomatic options, and the last choice is military action. For the last six months, we have been exercising the diplomatic option. Now we are coming to a stage when we are running out of these diplomatic options.

This is why it's important for Pakistan to listen to what President Bush and other world leaders are saying: Stop the export of terrorism into India.

JUAN WILLIAMS, FOX NEWS: Ambassador Mansing, why is it that India has not allowed democracy for the people of Kashmir? India is renowned as a great democracy in that region, but yet, the people of Kashmir have not been allowed to vote as to whether or not they would become an independent state.

MANSING: Now, that's a different point altogether. There the question of their being asked to vote, whether they want to become independent or other (ph). But the people of Kashmir have exercised their democratic rights. They have taken part in every single election, which as been held in India in the last 50 years. That's more than what we can so for the Pakistan-occupied Kashmir.

For that matter, that's more than what you can say about Pakistan. How many elections can you count, which have been held in Pakistan?

We have democracy, and the people of Kashmir enjoy the benefits of democracy.

WILLIAMS: But no referendum on independence?

MANSING: The referendum idea came up in a U.N. Security Council resolution in 1948. And Kofi Annan, who went to Islamabad last year, said this resolution can't be implemented. It's a non-binding resolution. You can't revive a document which is 50 years old and say, what about it?

The reason why the referendum couldn't be held out (ph), was that the U.N. had prescribed conditions for the referendum: Number one, there'll be a ceasefire. Number two, Pakistan will have to withdraw from the territory it had occupied. Number three, you have the referendum. Pakistan never withdrew from the territory.

HUME: So are you prepared -- so if Pakistan did these things, there would be a referendum? Is that what you think?

MANSING: If Pakistan had done those things in 1948, they would have in the referendum.

HUME: What if they did them now?

MANSING: Fifty years later, the people of (inaudible) and Kashmir have exercised their democratic rights. They have constituted an assembly. They have got their own legislature, their own government. You can't go back to 1948 and say, now let's have a referendum. Things have changed.

WILLIAMS: Now, Mr. Ambassador, the Russian leader Vladimir Putin has said that he would like to have a sit-down meeting with the leader of Pakistan and India. Is that in the future?

MANSING: No. Our prime minister has said that we don't favor such a meeting for a simple reason: If you have a meeting, you must have something to discuss. It is not as if we didn't have meetings. In 1999, our prime minister went by bus to Lahore to have a meeting with his Pakistan counterpart.

Last year, our prime minister invited General Musharraf to come to Delhi and to Agra for talks. Well, what happens is, when you across the table, the Pakistanis say, "There is no terrorism, there is nothing to discuss."

So our point is, well, you have to make up your mind. Do you want to pursue terrorism or do you want to pursue a dialog? You have to choose.

HUME: Well, it's an interesting question, though, sir, because here you've described your disappointment at earlier diplomatic efforts.

MANSING: That's right.

HUME: But this situation has clearly worsened. There's a very great flashpoint there. Nuclear weapons on each side.

MANSING: Yes.

HUME: And this is a bona fide crisis. And an opportunity presents itself in this Kazakstan session to have a meeting between the two leaders. And yet, it is India that says no.

MANSING: No.

HUME: Now, previous disappoints aside, sir...

MANSING: Yes.

HUME: ... why not pursue every possible opportunity?

MANSING: No, there is a simple solution to this. The whole thing arose because there is cross-border terrorism from Pakistan. Now, all the world leaders -- President Bush, Kofi Annan, Tony Blair, President Putin -- everybody's telling Pakistan, stop it. If Pakistan stops terrorism, there is no question of troop deployment to the borders. So why don't we address the simple question of asking Pakistan to stop cross-border terrorism?

WILLIAMS: Well, with this attitude, you will never have any negotiations.

But let me just quickly ask, earlier we heard the ambassador from Pakistan say to Brit Hume and Fred Barnes that the line between the two capitals that would inform them of an early-warning system with regard to the use of nuclear weapons is not working. Is that right?

MANSING: Oh, that's not right. The telephones are working. We have embassies in both countries. The Directors General of military operation on both sides have a hotline, and they speak to each other. As a matter of routine, every Tuesday they speak to each other.

It's not as if communications don't exist. Last week, even while talk of war was going on, the delegations of India and Pakistan met in Delhi to discuss the sharing of the rivers which are common to India and Pakistan.

Let's not assume that there is a total breakdown of communications.

HUME: Mr. Ambassador, thank you very much for coming in.

MANSING: Thank you.

HUME: Do come back.

MANSING: It's a pleasure to be here.