This is a partial transcript of Special Report with Brit Hume, November 20, that has been edited for clarity. Click here to order the complete transcript.

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BRIT HUME, HOST: While the U.S. concentrates on building up forces and building up an alliance against Saddam Hussein's regime in Iraq, things have not exactly been calm next door in Iran where the ruling mullahs are facing increasing trouble in a political atmosphere that seems, in many ways, the reverse of that which prevails in other Muslim countries.

It's hard to determine exactly what is happening inside that largely closed country but one person who keeps a close and keen eye and has good sources if Michael Ledeen of the American Enterprise Institute who joins me now, Michael hello.

MICHAEL LEDEEN, AMERICAN ENTERPRISE INSTITUTE: Thanks.

HUME: Nice to see you.

LEDEEN: Happy to be here.

HUME: What is going on in Iran right now?

LEDEEN: Well, you know for more than a year now the Iranian people have been demonstrating almost constantly their displeasure with the regime, and they've been calling for a change in the political system of Iran. They have had it.

HUME: The political system in Iran is one in which there is a secular government of sorts, presided over one Mohammad Khatami.

LEDEEN: Right.

HUME: But the un-elected religious powers, the mullahs, presided over by one Ayatollah Khameini.

LEDEEN: Khameini.

HUME: Khameini, excuse me, is the real power, right?

LEDEEN: Right. It's a theocracy. It's a religious ruling class and there is an elected government but it doesn't really matter because it has no power and every now and then they whine and complain that they don't really have power. Then they push bills through the parliament insisting that they really do have power and then those bills are annulled by the ruling theocrats and then they go back to whining some more.

In the meantime, the population has really been vaccinated against radical Islam and you have 65-plus percent of the Iranian people who are under 25 years of age and they're just sick to death of all of this. The most popular television show in Iran is "Baywatch," which is not approved by the mullahs and they get it through satellite dishes and so forth broadcast from Las Angeles and so on. And, these kids are just sick and tired of it and they want to be a normal country and so they've been demonstrating.

HUME: Their attitude toward America, these young people?

LEDEEN: Love it.

HUME: Not just "Baywatch" they love America.

LEDEEN: No, no, love America. There was, in fact, a poll taken by the government a couple of months ago in which the people were asked would they like better relations with the United States and 70-plus percent knowing that they were answering a question coming from their government said yes, we'd love to have better relations with the United States, and then they did the usual popularity polls.

Who do they like, who do they not? And, the Ayatollah Khameini came in next to last of all the major figures in the country, so they're not at all hesitant about expressing their disgust with this regime.

HUME: And recent disgust has been occasioned by a case of someone who said something was getting to be a slur against Islam, sentenced to death, and how did the populous come out on that issue?

LEDEEN: This is a history professor at one of the universities in Tehran, named Hasham Aghajari and he was asked and questioned by some students, do we have to take as gospel whatever these mullahs say to us. And he said, "well why should you be like monkeys and just blindly follow whatever the religious leader says. Think for yourself." And then the government didn't like that and sentenced him to death for blasphemy.

And then the students have demonstrated and rioted again, and what's interesting, is that a few days ago in the face of these ongoing demonstrations all over the country, in every major university in Iran, and now in the last couple of days spreading into the streets of some of these cities, and involving people who are certainly not students.

Some old ladies, for example, have been demonstrating, some workers in various key sectors of the economy. The supreme leader suddenly said well, maybe we should reconsider this verdict. It's the first...

HUME: Khameini said this?

LEDEEN: Khameini said that and that is the first time the regime has blinked publicly.

HUME: And, what do you think that signifies?

LEDEEN: Well, it's the most important thing because the thing that brings down regimes, monster regimes, is when the rulers suddenly look at themselves as not fulfilling the will of God, but just normal people trying to keep their jobs.

And then, they start worrying about their popularity and doing things instead of just saying to the people, I'm inspired by God. You do this or die. They start to say well maybe we can work this out and then the Iranian version of Gorbachev emerges and then it's (UNINTELLIGIBLE).

HUME: So, your sense is that this could be the beginning of the end for these guys?

LEDEEN: Yes, it could be. I mean it's the first time I've seen it. I mean we always knew that the Iranian people wanted to get out of this and they wanted to bring down the regime, but up until this last week, we had never seen a sign that the rulers were willing to do anything else except kill anyone who protested.

HUME: Now, is there a problem with -- I mean do the rulers have within -- who controls the army and the organs of the police and so on that would be the way that you enforce such oppression?

LEDEEN: The regime, they're not all that confident in these forces of repression. They keep on changing people all the time. And recently, they've even brought in foreign thugs to beat up students because they obviously don't trust their own thugs.

HUME: Now, one quick question, we only have a few seconds left. Is there any likelihood that Iran would help the U.S. in the conflict with Iraq?

LEDEEN: No. No, no, no. They'll pretend to help us in the conflict of Iraq and then stab us in the back as soon as they have the chance.

HUME: But they don't have a real use for Saddam, though, right?

LEDEEN: Well, but they think that Saddam is first and they're next and so they're going to have to fight us sooner or later, and they'd rather fight us in Iraq than fight us in Iran.

HUME: Got you. Michael Ledeen, great to have you, thanks for coming.

LEDEEN: Thank you, Brit.

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