The following is a transcribed excerpt from Fox News Sunday, July 20, 2003.

TONY SNOW, FOX NEWS: Meanwhile, the Center for Strategic and International Studies has a issued a report on reconstruction efforts in Iraq. Among the findings: The next 12 months will be critical to the success or failure of the Iraq reconstruction effort. The potential for chaos is becoming more real every day.

Joining us in his first Sunday morning interview, the U.S. civilian administrator of Iraq, Ambassador L. Paul Bremer.

Ambassador, let's start with that assertion by CSIS. Next 12 months are critical, and actually the next three months in terms of making peace in the streets. True?

AMBASSADOR L. PAUL BREMER, U.S. CIVIL ADMINISTRATOR IN IRAQ: Well, we're certainly in a critical phase now. There's no question about that. It's going to be a tough job. Nobody ever said it was going to be easy, and we're certainly in an important phase.

But I think it's important, Tony, to look at how far we have already come in less than three months. We've got a beginning of a government there, with a governing council, which was stood up exactly a week ago today. We have began to restore essential services back to their pre-war levels. And we're beginning to attack fundamental economic reforms, which are very necessary, given the very substantial underinvestment in infrastructure over a period of 35 years.

So we've made a great start. Sure, we've got some hard work ahead of us, but we've come a long way already.

SNOW: Let's talk about making peace in terms of dealing with opposition, then we'll move to the reconstruction piece.

Do you think that some of Saddam's forces already had plans for opposition, even before the war began, and that they prepositioned personnel and weaponry before the war?

BREMER: Well, it's possible. There has been some evidence of planning for the possibility of losing the war militarily and going into some kind of insurgency or organized resistance.

We certainly are seeing now organized resistance at small-level, squad-level organized resistance, by professional killers. These are guys who are trained soldiers. It's not a massive uprising by disgruntled factory workers. These are professional killers, members of the Fedayeen Saddam, Baathists, former members of the Republican Guard.

But it's important to remember that these attacks are in a very small area of the country, a country which was traditionally Saddam's area of support, and they pose no strategic threat to us. We will overpower them.

SNOW: What do you think the impact was this week of having yet another audiotape, which the CIA now has concluded was the voice of Saddam Hussein?

BREMER: You know, I've said since I got over there that I think it would be a lot better for us if we know that Saddam was either confirmed dead or was in our captivity. It certainly gives his bitter-end supporters an opportunity to say, you know, Saddam is still alive so we're still working for his return.

Dead or alive, this guy is finished in Iraq. There is no public support for him. He is not coming back. But it would certainly be better if we had him in our hands or if he were dead.

SNOW: Do you think he still believes he could make a comeback?

BREMER: Well, it's hard to get in the mind of -- that is as sick as this guy's mind was. But if you study people like him -- I've been reading German history. Adolf Hitler, as late as the 23rd of April, 1945, two days before he committed suicide, was still ordering phantom divisions around in Germany under the impression that they still existed.

So this kind of a mind is very difficult to understand if you're normal, I think.

SNOW: Do you think he's still in Iraq?

BREMER: I think he's probably still in Iraq. We don't know exactly where. He's probably located somewhere in what we call the Sunni triangle, the area from Tikrit, which is his original home, south to Baghdad. And this is the area where most of the attacks are taking place.

SNOW: There are reports now that you and the U.S. military forces are eager to get Iraqi troops back up and running and taking over a lot of the policing duties taking place. Correct?

BREMER: We have basically four different things we're doing with the Iraqis.

First, we started recruiting this week for a new Iraqi army. We will, within a year, have about a division of forces there.

BREMER: That will be a defensive armed force, not involved in domestic policing.

Secondly, we have opened a police academy, where we're trying to recruit some 65,000 police in the course of the next 18 months, to basically do policing in the cities.

Thirdly, we are going to begin to stand up a border guard force, made up of Iraqis, to help us defend the borders. And most importantly, we've starting this week to raise an Iraqi civil defense corps, which will be made up of Iraqis who will be under American military command, to help us basically with the armed part of the work we're doing.

SNOW: In other words, they're going to help you sniff out the bad guys.

BREMER: I think they will. And John Abizaid, who's the CENTCOM commander, told the press yesterday, which is what I think is right, that we will, by having Iraqis help us, we're likely to get better intelligence on who it is we're fighting.

And intelligence really is the heart of the matter here. We got to know who these people are, and then we've got to seek them out and either capture them or kill them.

SNOW: Also, you need to start paying those soldiers, because there are a lot of restive former soldiers who thought they were going to get paid.

BREMER: Well, as it turns out, we made the decision about three of four weeks ago to begin to pay the soldiers. We started pay on the 15th of July, and that particular problem is pretty quiet right now. I hope it stays quiet.

SNOW: How long do you think the United States is going to need a contingent of 150,000 troops in Iraq?

BREMER: Well, I don't like to get into the numbers game, Tony. It's really -- first of all, it's a military matter, it's not my matter. I think we have enough troops there now.

I think, as John Abizaid said yesterday, we need to make some readjustments in the kinds of troops we have. They can be lighter and more mobile. We don't need a lot of tanks and heavy artillery there anymore. That war is over.

So I don't get into the numbers game. Let's just get this small group of bitter-enders dealt with, and then we'll see what implication that has for our troop strength.

SNOW: Do you see a military role for the United Nations?

BREMER: It's hard to see how the United Nations can play, itself, a military role.

One of the lessons of most of these post -- these transitions we've seen in Bosnia, Kosovo and so forth is the importance of unity of command. For the time being, all of the military forces are, and I think should remain, under American military command.

Now, there are 19 other countries already on the ground there working under our command. So it's not as if we don't have an international force there. We have a very international force.

SNOW: We don't need additional help, not even from NATO?

BREMER: Well, you know, you talk about -- of course I think it would be useful if NATO endorsed what we're doing. But if you think about NATO, all of the NATO -- major NATO countries are already there, with a couple of exceptions. And I mean, the Italians, the Spanish, the Dutch, the Norwegians, the Danes, the Czechs, the Bulgarians, the Hungarians -- you can go down the list -- the British, of course. By far, the majority of NATO countries are already represented on the ground with forces.

SNOW: So the Indians who had promised 17,000 troops, we don't -- they have backed away from that promise. We don't need those forces?

BREMER: I think it would be useful to have other countries there, like India. I notice the secretary of state has said that we should consider a Security Council resolution if that would help get the Indians there. If it can be done in a way that preserves unity of command, obviously, that would be helpful.

SNOW: All right. Kofi Annan wants a timetable. What's your reaction?

BREMER: Well, the timetable really is in the Iraqis' hands now, I would say to the secretary-general, because the key question now is writing a new constitution. That has to happen before there can be elections, and elections will lead to a sovereign Iraqi government, at which time the coalition itself will have done its job. It doesn't mean that there won't have to be security forces there. But the part that I'm responsible for, the civilian administration, goes out of business the day there is a sovereign government.

We hope that a constitutional conference will be convened in September. How long will it take the Iraqis to write their constitution? I don't know. The timetable should be laid down by the Iraqi people.

SNOW: Would you expect, a year from now, to have an elected Iraqi government and a functioning constitution?

BREMER: I think it's quite possible. If the Iraqis can write a constitution in six or eight months, and then that can be followed quickly by elections, it's possible that we could indeed have a sovereign government in a year.

SNOW: What about Iran? There are all sorts of reports of adventurism. I know you're concerned about it.

BREMER: Yes, the Iranians have not played a particularly helpful role in Iraq since the war. We've raised that with them. There is evidence of Iraqi intelligence and Rev Guard -- Revolutionary Guard -- activity in Iraq, which I don't think is helpful.

I think it's very hard to put together a country that is as shattered as Iraq is by 35 years of dictatorship, when the neighbors are trying to pick it apart.

SNOW: Are you worried that Iran, by placing some troops within Iraq's borders, is trying to annex some Iraqi territory?

BREMER: Well, the incursion that we've seen by the Iranians so far is pretty minor. It's between a kilometer and a half and three kilometers on seven border posts in the south. It's not a very hospitable part of Iraq to annex. It's in the marshes.

But nonetheless, symbolically, it's important, and we think they should pull back.

SNOW: How long will it take to get electricity up to pre-war levels in Baghdad?

BREMER: We are expecting to be back at pre-war levels in the whole country in the next six weeks or so.

It's important to remember that Saddam underinvested in power, as he did in everything, and that pre-war, there was already a 2,000- megawatt shortage country-wide, about a third below what is needed.

So even when we get back to everything stood up that was there before the war, we're going to have a significant power lack (ph) that's going to have to be built over the next years.

SNOW: What do you say to those who are arguing that we are now suffering casualties at an unsustainable rate?

BREMER: Well, like any American, I obviously regret the death of any service man or woman. It's a tragedy for them and for their families.

But I think it's important to keep this in perspective. First of all, we fought and won a war in three weeks, which was a model in terms of low casualties -- incidentally, on both sides. Very few collateral damage on the civilian side, on their side. Almost no collateral damage to physical structures.

The problem we have in Iraq now with reconstruction is not what was done during the war. It's the terrible underinvestment there before the war.

We can, I think, impose our will, as we must, on the very small number of people who are trying to stop us with minimal casualties, and I think that's what has to be our goal here.

SNOW: Ambassador Bremer, thanks for joining us.

BREMER: Nice to be with you.