This is a partial transcript of "Special Report with Brit Hume", March 17 that has been edited for clarity.

Watch "Special Report With Brit Hume" weeknights at 6 p.m. ET

BRIT HUME, HOST: Shortly after the vice president's speech at the Reagan Library in Simi Valley, California, I spoke to him by satellite. Here is part of that interview.

(BEGIN VIDEO CLIPS)

HUME: I wanted to ask you first about what happened today. The Mount Lebanon Hotel in Baghdad was blown up by what is clearly a terrorist attack; a number of people dead. Your reaction to that, what does it say to us about how well things are going there?

CHENEY: Well, I think it's one more example, Brit, of the kind of thing we've seen a lot of in recent months, that the terrorists are increasingly desperate as we get closer and closer to that period of time, when we begin to hand off sovereignty back to the Iraqis.

Of course, come June 30, we hope to stand up an interim government in Iraq made up of Iraqi citizens, who can receive sovereignty and begin to govern themselves to a much greater extent than they have today. I think the terrorists recognize that that's a major milestone, if you will.

HUME: I heard you say that you hope to turnover control to a civilian government there. Is that now just a hope and not a set plan, not an expectation?

CHENEY: No, I think we're making major progress towards it. Within the last couple of weeks, the Iraqi Governing Council (search) signed this new basic law that will provide sort of an interim constitution for them. It's a major success story, major milestone. It's one of the most progressive documents ever developed in that part of the world, with regard to safeguarding minority rights and establishing a government.

And that in and of itself was an absolutely essential step and it's completed. It's been done. Everybody signed up to it. Twenty-five members of the Governing Council, all 25 signed, Shiia (search), Sunni (search), and Kurd (search). So we are making progress, and June 30 is the deadline by which we want to begin the process of transferring sovereignty to an interim Iraqi government.

HUME: What do you now -- looking back to the decision that was made by you and the president and others to go to the U.N. to seek authority, or additional authority, and to seek support, what in the end came of that? Did you get anything that has ended up helping at all by going to the U.N.?

CHENEY: Well, I think we did, Brit. I think an American president has an obligation to the American people to demonstrate that you've gone the last mile to try to achieve your objective by other means. That the resort to military force and putting American lives at risk is the last step. We went the extra mile to try to resolve the issue diplomatically...

HUME: You did?

CHENEY: ... and get him to come into compliance. And I think it was important for us to make that point before we committed U.S. forces.

HUME: Let's assume for the sake of discussion, sir, that he had complied. It appears now based on what has been found there that he probably or may well -- he may well be that he could have. That is, to say he could have outlined what he did with a lot of the weapons that have not been found there in any stockpiles. And if he pulled to Libya, you would still have a terrorist sympathizing dictator in power in Iraq and you would still be faced with a need to deal with him, wouldn't you?

CHENEY: Well, he certainly would have fairly dramatically altered if, in fact, he had come clean and had gotten rid of his capabilities and done what Moammar Gadhafi (search) has now done in Libya.

The effort would have had to be mounted, obviously, to deal with other aspects of his behavior, such as the fact that he had hosted terrorist organizations over the years. But we could then have gone to work on those aspects of his behavior.

You know, it's a hypothetical. The fact of the matter was he never did comply with the U.N. Security Council resolutions, and that's one of the reasons that we felt justified in doing what we did. I think it was absolutely the right decision to make. I think the world is better off today that we're safer and more secure because Saddam Hussein is in jail, his sons are dead, and his government is gone.

HUME: But he might still be in power had the U.N. resolution been obeyed. Can you say today that there's -- that we are any more well regarded in Europe or elsewhere in the world as a result of having gone to the U.N.?

CHENEY: Well, I can't say that. I think there were some at the U.N. who did not want us to do what we did. Some who refused to vote for a second resolution. Obviously the French and the Germans disagreed with the course of action we took.

As the president has said repeatedly, and I think he is absolutely right, that the United States cannot be in a position where we seek a permission slip from the United Nations, or anybody else, when it comes to defending the security of the country. I think that's absolutely dead on.

HUME: Let me give you something that Senator Kerry made a -- a statement Senator Kerry said today, among others. I know you had something to say about him that received plenty of attention as well. But let me let you hear something he said today that I thought might interest you.

KERRY: As I said yesterday about the events in Spain, they cannot become the reason to leave. And I call on Prime Minister Zapatero (search) to reconsider his decision and to send a message that terrorists cannot win by their acts of terror.

HUME: Your reaction?

CHENEY: Well, I think it's a good statement. I think it's something that we would find we could agree with. I think that, in fact, if free societies allow terrorists to change their policies of those governments, then the terrorists win.

That's their objective is to change and modify the policies of the democratically elected governments in order to achieve their purposes. And it's important they not be permitted to do that. I sense the sentiments that Senator Kerry (search) expressed there are ones we could all agree to.

HUME: Let me ask you about something else that he said. He made a speech today that was focused very much on military preparedness and the lack of it. Let me let you react to something else he said.

KERRY: Tens of thousands of troops were deployed to Iraq without the most advanced bulletproof vest that could literally make the difference between life and death. Lives and blood will always be the cost of war, but we should never send young Americans into harm's way more exposed to danger than they have to be.

HUME: And he made the accusation, in particular, that body armor was lacking. That proper body armor, the most advanced body armor, was not available to our forces, and he laid the blame at the door of the Bush administration for that. Your reaction, sir?

CHENEY: Well, the facts are that -- that the outset of the campaign there was only one factory producing the latest, newest, state-of-the-art body armor. There are now six that are up and running.

I believe the chief of staff of the Army and the vice chief -- vice chairman of the Joint Chiefs have testified recently that all of our troops in Iraq are now properly equipped with the newest body armor. So there were -- the main problem had been just the sheer capacity to produce these items early on.

The real question here, of course, though, is, Brit, that the money to pay for all of this was in the Iraq supplemental that we approved last summer. The president asked for the funds to provide for many urgent needs for the troops in Iraq, and it passed in the Senate overwhelmingly. I believe there were 12 votes against it. John Kerry voted against the appropriations bill that would, in fact, have gone to pay for that body armor.

HUME: Mr. Vice President, on what has been a busy day for you, thank you very much for taking this time.

CHENEY: Well, thank you, Brit. It's a pleasure as always.

HUME: Thank you, sir.

(END VIDEO CLIPS)

Copy: Content and Programming Copyright 2004 Fox News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2004 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, Inc.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.