This is a partial transcript from On the Record with Greta Van Susteren, December 19, 2003.

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GRETA VAN SUSTEREN, HOST:  Will the capture of Saddam help bring democracy to Iraq?  And now that he's captured, who is the biggest threat to the region?

I recently sat down with Deputy Secretary of State Richard Armitage (search), and I asked him if the Sunnis, Shiites, and Kurds would ever find a way to live together.

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RICHARD ARMITAGE, DEPUTY SECRETARY OF STATE:  Well, one hopes, but that's where we have to spend the majority of our time.

The Sunni held sway for not just 35 years in Iraq but literally for hundreds of years, and now they're dispossessed, and we have to find a way to bring the Sunni minority (search) into an appropriate role, both in economic terms and in governance terms, while maintaining a very low (UNINTELLIGIBLE) communal violence.

Thus far, things have been OK, and we've got to continue to work on that.

VAN SUSTEREN:  How do you do that, though?  I mean it almost seems like an impossible task, especially when it goes back so many -- you know, so many, many years of bad blood.

ARMITAGE:  Well, I think we have to rely on the countries in the area who, in the majority, are Sunni, to try to use their influence with the Sunnis to persuade them they will be brought into an appropriate governance role.

They have to work rigorously with the Shia who have been put upon, particularly for the last 35 years in Iraq, to let them see the best way forward is to have an appropriate and majority rule in governance of their country.

We've got to make sure that the fruits of any economic reconstruction are spread throughout the country.  So it's a tough task.

VAN SUSTEREN:  In terms of Iran, what do you foreshadow in the next year in terms of any relationship we have with Iran?

ARMITAGE:  Well, we -- we've got a real bone to pick with Iranians, and that's the fact that they have in their possession Al Qaeda (search) [members], and we want them.

And whether they're turned over to us or turned over to countries of their origin, it -- it's the same to us.  We want them out of Iran and where they can be questioned so we can gain knowledge.

If the -- if the Iranians are not forthcoming, then there cannot be an improvement in our relationship.

VAN SUSTEREN:  And in terms of the nuclear facility, whether they're doing it for conventional use, they've got an awful lot of oil, or for weapons, what's the status of that?

ARMITAGE:  Well, the -- the IAEA (search) decision was quite a good one.  The Iranians have said they'll sign the additional protocol.  Of course, the test of this will be in verification to make sure they're not cheating on the agreement.

But at a minimum, I think you can say retarded.  The international community has retarded the able of the Iranians to develop illicit nuclear activities.

VAN SUSTEREN:  Do you trust the Iranians?

ARMITAGE:  No.

VAN SUSTEREN:  Syrians?

ARMITAGE:  No.

VAN SUSTEREN:  Do you trust -- but you trust General Musharraf?

ARMITAGE: ... Trust General Musharraf because he sees very much that his interest and our interests are, at present, very compatible.  I don't think that President Assad (search) in Syria has come to that conclusion, nor have the Iranians.

VAN SUSTEREN:  Who's the bigger problem for us in the immediate future -- Syria or Iran?

ARMITAGE:  Oh, Iran, clearly.  Iran has a well-developed appetite for weapons of mass destruction and documented delivery systems.  They have an unrequited hatred for Israel, and they have no love lost for us.

So I think they're -- they're clearly in the longer run the threat.  It doesn't have to be so, but they have to make some decisions if they want to change the equation.

VAN SUSTEREN:  And how do they see their position now that Iraq is -- now that Saddam is gone and we're trying to build a democracy there?

ARMITAGE:  Well, in the short-term, I think they see that they have some small conformity of views, particularly in the South.  They don't need the southern part of Iraq to be heated up.

So they're not using their influence in an overtly negative way, though, clearly, privately and through the use of money, they're trying to buy clerics and buy influence.

In the longer run, I think a democratic -- a truly democratic nation on their borders will give them some cause for worry.  They are nominally democratic in Iran.  But, of course, that nominal democracy has been hijacked by theocrats.

VAN SUSTEREN:  Do you think they're behind the insurgents -- Iran is behind the insurgents or not?  In Iraq.

ARMITAGE:  No, I don't think so.

VAN SUSTEREN:  Who do you think...

ARMITAGE:  But I think that Iran certainly does not do what she needs to do to control her borders and allows particularly Ansar Islam, A.I., to cross back and forth over the Iranian border and, therefore, find some safe haven in Iran.

VAN SUSTEREN:  Thank you, sir.

ARMITAGE:  Thank you.

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