This is a partial transcript of Special Report with Brit Hume, July 16, that has been edited for clarity. Click here to order the complete transcript.

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TONY SNOW, GUEST HOST: North Korea told the U.S. this week that it had reprocessed enough plutonium (search) to produce several nuclear weapons. Although Secretary of State Colin Powell (search) is still committed to a diplomatic solution to the matter and with the bulk of U.S. troops in Iraq, is military action out of the question? For answers, we turn to retired U.S. Air Force Lieutenant General Tom McInerney, a FOX News military analyst.

Let's lay the groundwork here. The North Koreans keep blustering. We don't know if they have nuclear weapons in addition to those already thought to be in their position, do we?

RETIRED AIR FORCE LT. GEN. TOM MCINERNEY: Well, I think we…as CIA (search) estimates they may have one or two times. The question is how they're packaged? Are they in a weapons system, in a Scud or are they in a bomber? But the question is, they think it's an estimate.

SNOW: OK. The other thing is they're claiming they've reprocessed the all spent fuel rods from the Pyongyang (search) nuclear facility. But again, nobody knows, do they?

MCINERNEY: Well, we don't know exactly. We're taking their words for it. But in the negotiations they have said offline to us that No. 1 they do have nuclear weapons. No. 2, they're going test them and No. 3, they're going to sell them.

SNOW: All right. So the United States first and foremost wants to put an end to the nuclear capability of the North Koreans. In the past, we've offered them diplomatic recognition, economic relations, security guarantees and they still said no. Why on earth would anybody think diplomacy is going to work?

And let's turn to the question that we asked at the beginning of this segment, what about a military option, given all that's going on in the world, is there really an effective military option available?

MCINERNEY: Yes, there is Tony. And there is a growing case for preemption. I do not want to have a war over there. But if they will not negotiate, we cannot let them have nuclear weapons and sell them to terrorists that end up here in the United States. So, Korea is an excellent place for us to have a preemptive war or a war. It is the optimum place for U.S. forces.

First, it optimizes our naval forces: two naval carrier battle groups off of East Coast, a Marine amphibious force off the East Coast. The distances are much shorter than we just experienced in Iraq, where we used to fly 800 Sorties a day in Iraq. We will fly 4,000 Sorties a day. So…and we know exactly where every one of those artillery pieces are that they're trying to use Seoul as a terror target.

SNOW: All right. Now, people hearing this are going to say, whoa, whoa, whoa, whoa. Wait a minute, we've had a war in Afghanistan, we've had a war in Iraq. The entire world is already arguing that the United States has imperial ambitions. And you've got a war-mongering cowboy as president. That's the caricature. Wouldn't that get worst if the U.S. were to engage in military action in North Korea?

MCINERNEY: It would. Don't want to do it. But wouldn't it really be worse if they detonated terrorist 10 nuclear weapons in the United States? We must think what is the worst they could do to us and so we don't want that to happen.

SNOW: There have been persistent questions about whether neighboring neighbors nation would come aboard. South Korea has been frankly frightened of the nuclear capability. The Chinese haven't exactly dived into the matter. And the Japanese have limited resources. The Russians, nobody knows exactly what kind of commitment they have.

So here we have a map there, and we can see North Korea. What kind of commitments now do you think we have in place from the neighboring nations; the ones that stand to gain or lose the most from North Korean adventurism?

MCINERNEY: Well, clearly they all lose. And China does not want a nuclear North Korea. Japan clearly does not want to have a nuclear North Korea. South Korea doesn't, even Russia. And so it's in the objectives…diplomatic objectives of the five nations, the four plus the United States, to negotiate with North Korea to get verified removal of those nuclear weapons. So it's in everybody's interest.

If North Korea goes nuclear, South Korea is going to go nuclear, Japan is going to go nuclear, Taiwan is going to go nuclear. And China does not want that. China gets somewhere between 60 and $100 billion of U.S. investment and trade and a whole host of other ways that they do not want to lose from the United States. So I believe that those five nations are vitally interested in negotiating.

Now what is very interesting, I find, Tony, the South Koreans in the last eight years have gone more to the sunshine policy, we want to get along with them. And what happens? The North Koreans continue to blackmail.

SNOW: Well, here's an interesting thing. You think that the use of force or the threat of force or the possibility of force, might force them back to the table, correct?

MCINERNEY: Well, I think if they know we can do this in 30 to 60 days, they will have to relook at this.

SNOW: Perhaps in token of their seeing you on the air in just the last couple of minutes, the following bulletin has run on across the wire. North Korea (search) seems ready to resume three-way talks with China and the U.S., according to an un-named U.S. official. And the U.S. has not ruled out further three-way talks.

Is it acceptable to have China (search) there as an intermediary?

MCINERNEY: We must have. And it must be more than three-way talks. North Korea continues to try to blackmail us and say just the U.S. and North Korea. No way. Our government wants all five nations involved. Clearly, China and South Korea definitely must be involved, as well as China.

SNOW: Final question, while we're talking about these military options. Are the Chinese, the Russians, the South Koreans, the Japanese are they aboard with the possible use of preemption?

MCINERNEY: I don't think they all…I don't think they want that. They want to do it diplomatically.

SNOW: No, but failing diplomacy?

MCINERNEY: Failing diplomacy, I think that they would support the U.S. rather than having these weapons go to terrorists.

SNOW: All right. Tom McInerney, thanks as always.

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