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

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JIM ANGLE, GUEST HOST: President Bush said this week that the international community will not tolerate Iran (search) building nuclear weapons. Was the president threatening to take action on his own? In an exclusive interview, National Security Adviser Condoleezza Rice (search) says it was an effort to mobilize the international community and press Iran to open up to more international inspectors.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE: The course that we're on at this point is to work with the IAEA (search) and to work with others to do what really needs to be done here. Which is to get into Iran in a more intrusive way, for inspections to make sure that the Iranians are living up to their obligations and that is the course that we're pursuing.

This is a difficult relationship with Iran and there is no doubt that we have a lot of differences with the Iranian government. The president has said that it is important to be associated with the aspirations of the Iranian people. They've had a chance, unlike many places, to express those aspirations a number of times through elections. They always express them in favor through democracy and liberty.

ANGLE (on camera): Well, in fact, the president said that America, that those who should know, those who are protesting, should know that America stands squarely by their side. Is the president trying to just recognize the rightness of their cause or to encourage them in those efforts?

RICE: Well, it's very important to recognize the rightness of their cause and to let them know that there are those in the international community who care that they are expressing their rights. We really do believe that the Iranian leadership needs to be responsive to its own people.

ANGLE: As you know, there is a tortured and sad history in this regard. Former President Bush encouraged Shiites in the south of Iraq to rise up against Saddam in 1991. When he came in and slaughtered them, the U.S. did nothing. You can go all the way back to 1956 when the Eisenhower administration seemed to encourage Hungarian opposition to the Russians. Again, Russian tanks came in and crushed them. The U.S. did nothing.

Isn't this a pretty tricky business in encouraging anti-government opposition in other countries?

RICE: Well, clearly it is important to be responsible and it is important, as a part of that responsibility, nonetheless, to recognize these aspirations and to let people know that they're being noticed around the world.

But the United States doesn't have to do this alone. Every freedom- loving country in the world should be saying to the Iranian government you have to recognize the aspirations of your people. You cannot be a responsible integrated member of the international community if you don't recognize the aspirations of your people.

We have a number of friends and partners in the world, allies in the world, who chose and have chosen to have an engagement strategy with Iran. Part of that engagement, if there is going to be engagement, ought to be about the rights of Iranian people, about the things that the Iranian government is doing to frustrate those rights.

And so, it really is just raising the visibility of that internationally and the president also said that these young people needed to be treated with respect. The world is watching how Iran treats its own people.

ANGLE: Is the U.S. considering a greater engagement, contemplating a greater engagement with Iran?

RICE: The key here is not a matter of engagement, it is a matter of the Iranian government finding a way to deal with the myriad of problems that we have in the relationship. Those include support for terrorism.

The Iranians are an outlier on the Middle East peace process, supporting the rejectionists who are trying to scuttle this very good opportunity for peace that we have. That has to be spoken to. And by the way, it has to be spoken to by not just the United States, by others as well.

We've talked already about the nuclear program. That has to be addressed. Iranian efforts to support subversion in Iraq, in southern Iraq where the Iranians seem to be sometimes interested in trying to import Iranian-style theocracy into Iraq. Those issues have to be addressed and from time to time, when it's important, when we have something to say to the Iranians, we talk to them.

But there isn't any chance that this relationship is going to get better on a broad scale until the Iranians change their behavior.

ANGLE: I'm often struck by the extent to which, whenever the president points the finger at someone or raises a problem with someone, the extent to which so many pundits immediately assume that the president's next act will be to launch military action. Some conservative pundits encourage it, liberal pundits criticize it. But they all seem to assume that the administration is ready to go to war at the drop of a hat. What do you make of all that?

RICE: It's a little hard to understand because from the very beginning, the president has said that different circumstances require different solutions. And we have a broad array of policy instruments that we use.

In the case of North Korea, for instance, even though he's taken no options off the table, the president has been very clear that he believes that this is something that can be resolved through diplomatic means. We have lots of different instruments.

Iraq was a pretty unusual circumstance, a serial abuser of international obligations. U.N. resolutions that he signed on to after he lost the war of aggression, someone who had weapons of mass destruction and weapons of mass destruction programs going back into history that every administration had worried about. Iraq was an unusual circumstance.

ANGLE: The intelligence community -- the intelligence committees rather, are now investigating or at least looking at the intelligence leading up to the war in Iraq. Does this come down as some Republican and Democrats suggest to a question of credibility for the intelligence communities or even credibility for the president and other officials who talked about that intelligence?

RICE: Simply revisionist history for people to suggest that there was no reason to believe that the Iraqis had weapons of mass destruction, or that someone had somehow inflate this threat. You only have to go back to 1999 and the last UNSCOM report and the U.N. report in which they talked about large quantities of missing anthrax and botulinum toxin and what happened to those weapons.

You only have to go back to 1998 when the Clinton administration used military action because of Iraq's rejection of weapons inspections, because they were worried about the weapons of mass destruction there.

The fact is, there is a long intelligence records with many, many, many data points that suggests that the Iraqis not only had weapons of mass destruction, intended to conceal them, had used them before, and were making efforts to improve their capabilities. That's a long history.

And I'm often struck, Jim, that people told us that we should have connected the dots to 9-11 to say that 19 men were going to drive airplanes into the World Trade Center and into the Pentagon, but you have thousands and thousands of dots about the Iraqi program. Including dots that people saw on the ground in 1991 and 1994 and you're not supposed to connect those dots to consider that this was a threat to American security? I think it is revisionist history.

ANGLE: Let me ask you about what is happening in post-war Iraq. There is now a soldier, it seems, is killed almost every day. Some believe, and there seems to be a growing school of thought that this is an organized every, an organized effort that might, in fact, be directed by Saddam Hussein.

RICE: We have no evidence that Saddam Hussein is directing anything and let's remember, he ruled the old-fashioned way: terror and secret police and an army and great resources. This is not Usama bin Laden. This is a different character.

Of course, the president made clear at the time that he said major military operations were over, that Iraq was still going to be a dangerous place for our forces until the country could be secured. The fact is, this is important to American security. We're going to stay the course. And things are getting better. We will have to deal with the security situation. It's being dealt with day-to-day. But it's still a dangerous place, in parts of Iraq. Not the whole country.

(END VIDEO CLIP)

ANGLE: Rice said there is a rumor a day about Saddam Hussein, but the U.S. doesn't really have any idea what happened to him.

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