This is a partial transcript from On the Record with Greta Van Susteren, May 11, 2004 that has been edited for clarity.

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GRETA VAN SUSTEREN, HOST :  Tonight: a despicable act of terror.

(BEGIN VIDEO CLIP)

NICHOLAS BERG: My name is Nick Berg.  My father's name is Michael.  My mother's name is Suzanne.  I have a brother and a sister, David and Sara.  I live in West Chester, Pennsylvania, near Philadelphia.

(END VIDEO CLIP)

VAN SUSTEREN:  An innocent American is beheaded reportedly at the hands of bin Laden's top lieutenant.  We must warn you the details are gruesome and very disturbing.  Fox's David Lee Miller is in Baghdad with more -- David.

DAVID LEE MILLER, FOX CORRESPONDENT :  Greta, Nick Berg's body was found on Saturday.  His family was told that it had been located on Monday and that it had been mutilated, but nothing, could possibly have prepared them for the video that was broadcast on an Islamic Web site.

Now, as you mentioned, we are not going to broadcast the entire tape right now.  It is simply too horrific.  Even hearing the details is horrible enough.  Five men wearing headscarves and black masks are standing over Berg on the tape.  He is dressed in a bright orange jumpsuit.  After reading a statement, the men then take out a long knife, and they push Berg to the floor.  Then over the next 30 seconds, they decapitate him.  Now, this is not a quick, painless death.  Berg is screaming as his attackers shout in Arabic, "God is great."  They slice at his neck five times, and on the third, his head snaps.  At this point, he is silent, but the attack continues.  Twice more, they continue to cut his neck.  His killers then hold his head up to the camera.

Now, a statement that is posted on this Web site said Berg's murder was in retaliation for abuse at the Abu Ghraib (search ) prison, and they warn there'll be similar executions in the future.  Now, the video on the Web site has a title.  It reads "Abu Musab al Zarqawi shown slaughtering an American."  Now, Zarqawi, you might remember, is a lieutenant of Usama bin Laden, and the coalition has said that -- recently, they believed he was operating here in Iraq.  But it is not clear from the tape if they're being figurative or literal by saying he is participating in this murder, whether or not he simply ordered it, or if, in fact, he is wielding the knife.  We do not know.

The tape, we are told, is being analyzed by the CIA so they can learn more about who was responsible for this horrific murder.  And by the way, Greta, this tape, portions of it, are being broadcast throughout the Middle East on Arabic-language satellite channels.  But they have shown (ph) to edit out the tape in much as the same manner as the Western media -- Greta.

VAN SUSTEREN:  David, thank you.  Let's go to Fox's Rick Leventhal, who is in Nick Berg's hometown of West Chester, Pennsylvania -- Rick.

RICK LEVENTHAL, FOX CORRESPONDENT :  Greta, this is one of those quiet suburban neighborhoods where kids play in the streets and neighbors know and look after each other.  Nick Berg grew up on this street, in the house behind me.  And by all accounts, he was well liked, described as a good kid, always ready to help people out.  Tonight the neighborhood responded to the tragic news of Nick Berg's death with a candlelight vigil and prayer ceremony, showing support for a family in shock, devastated not just by the news of Nick's death but by the way he was killed, struggling to understand why.

Berg grew up here in West Chester, went to Henderson (ph) Senior High School, later formed his own company, traveling to Iraq to try and make money and also help the cause, rebuilding transmission and communication antennas.

His family was worried about him, and so was the neighbor next door, Bruce Houser, who's known Nick for 23 years and says he was like a son to him.

(BEGIN VIDEO CLIP)

BRUCE HOUSER, NICK BERG'S NEIGHBOR :  It just floored me.  I just dropped everything I had in the yard and went in the house, and I couldn't help but to cry because here's someone I watched grow up from a small child to an adult, and someone comes on and tells me that their son is gone, and it has to affect you.

(END VIDEO CLIP)

LEVENTHAL:  Nick's father, Michael, his brother, David, and his sister, Sarah, heard yesterday that Nick had been brutally murdered, but they found out today from a reporter about the video of that murder, and they were hugging and crying on the family's front lawn.  The father says he's glad Nick didn't suffer a long and torturous death, but he didn't want it to become public.  And now the father says his heart goes out to all those others who have lost loved ones in Iraq.  And he is also urging the Army to expedite the release of Nick's body so that they can make the proper arrangements and put this matter behind them -- Greta.

VAN SUSTEREN:  Rick, thank you.

Nick Berg's father, Michael, spoke earlier about his anger with the United States government.

(BEGIN VIDEO CLIP)

MICHAEL BERG, NICK BERG'S FATHER :  I think that they caused his death indirectly by detaining him without any rights.  Even after detaining him, I think they at least had an obligation to get him safely out of the country.

(END VIDEO CLIP)

VAN SUSTEREN:  Joining us on the phone from Montana is Nick Berg's former teacher and family friend, Charlotte KNIGHTON.  Charlotte, your thoughts tonight about Nick.

CHARLOTTE KNIGHTON, FAMILY FRIEND :  Well, my thoughts -- first of all, my heart goes out to his family.  But it's a bigger loss.  It's a loss to our whole country.  He was a very compassionate, creative, talented young man.  And to have lost such a treasure is a real loss.

VAN SUSTEREN:  How do you describe -- what kind of kid was he growing up?

KNIGHTON:  Well, I didn't meet Nick until he was in the 8th grade, in my middle school science class.  I continued to know him even better when he was a member of the Henderson Science Olympiad team, which I helped with.  And he helped with the summer science program that I directed there in the West Chester school district.  The talent that he brought to dealing with little kids, from kindergarten to 5th grade, in the summer science program was very heartwarming.

VAN SUSTEREN:  Do you know why he went to Iraq, Charlotte?

KNIGHTON:  No, I did not.  I've only just today found out this news, and I -- although I knew that the family was concerned, I really did not know why he was there.

VAN SUSTEREN:  And when was the last time you actually had a chance to talk to Nick?

KNIGHTON:  I saw Nick last May, when we were in West Chester.  We've moved to Bozeman, Montana, after I retired from teaching there in West Chester.

VAN SUSTEREN:  All right, Charlotte.  Thank you very much for joining us this evening.

Just hours ago, Senator John McCain, himself a prisoner of war, voiced his disgust.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA:  It's terrible.  It's tragic.  It also shows the stark difference between America and these barbarians.  We have found instances of mistreatment of prisoners.  We are addressing the issue completely.  These people have no regard for humanity or any other common decency, and that's why we've got to win in Iraq.  That's why we have to get rid of these kinds of individuals so the Iraqi people are never cursed with them again.

(END VIDEO CLIP)

VAN SUSTEREN:  Let's bring in Marc Ginsberg, the former U.S. ambassador to Morocco.  Ambassador Ginsberg, we have the tape here in the bureau.  We're not showing it on the air.  But when you see it, it really enrages you, doesn't it.

MARC GINSBERG, FORMER U.S. AMBASSADOR TO MOROCCO, FOX NEWS FOREIGN AFFAIRS ANALYST:  On the 11th of the month again, here we are, this country has another tragedy to deal with.  And I watched the tape.  And this is an American son who went to Iraq to do the best job possible for himself and for his country.

We've got to understand who we're dealing with here.  Abu Musab al Zarqawi and the type of people who he represents and who follow him are, indeed, the enemy that we're trying to beat throughout the Middle East.  And it's important that his execution be put on every Web site, so that every Arab can see what these people are doing to innocent Americans, as well.

VAN SUSTEREN:  Why can't we get him?  This isn't the first time we have heard of al Zarqawi.  We've been on to him for a long time.

GINSBERG:  We have, but we seem to -- he seems to be able to stay one step ahead of the posse.  And the fact is, it goes back to the same point, that until we can get security on the streets of Iraq, we won't be able to get these evildoers off the streets, and, frankly, to give them similar treatment, if not the justice that they deserve.

You know, Greta, it comes down to a fundamental point that we face in the Middle East.  We're not going win this war by military means alone.  We got to shock the conscience of the Arabs who are actually prepared to be on our side by showing them this type of execution.  We're all aggrieved...

VAN SUSTEREN:  But -- but wait...

GINSBERG:  ... from the dishonor of what we saw from this prison scandal.  These are the type of photos that Arabs need to see, as well.

VAN SUSTEREN:  But on the other hand, it seems to empower people.  I mean, people -- I mean, it seems to empower our enemies against us.  I mean, it's the most unthinkable thing.  But you've got Al Jazeera, which apparently has got something on its site that certainly isn't shaming this incident.

GINSBERG:  No, not at all.  In fact, you know, I looked at the site just a little while ago.  And yes, there's no doubt there is a civil war taking place throughout the Islamic world, and we have got to be able to help empower one side that is going to prevail against the other.  And we have got to be on that winning...

VAN SUSTEREN:  But where is that Arab side?

GINSBERG:  That Arab side is sitting on the sidelines right now.

VAN SUSTEREN:  Why?  Why?

GINSBERG:  Because -- because they object to a lot of the policies that we're executing throughout the Middle East.  And we need to be able to deal...

VAN SUSTEREN:  But we can't...

GINSBERG:  ... more effectively with these policies, as well as to show that we are going to persevere and succeed, as Senator McCain said, to define the victory that we need in order to prevail because, let me tell you, Greta, if Abu Musab al Zarqawi could do it to your son, my son or any son, he'll do it.  This is what we're dealing with.

VAN SUSTEREN:  But how do we get that point across?  We can't be weak.  We can't acquiesce.  We've got to be strong.  Where is that Arab that's going to recognize our strength and our effort to -- we want the best, we're not trying to -- we're not trying to create the worst?

GINSBERG:  Because we're going to show them in the end that what -- no matter trepidations and trials we face in Iraq that we are going to bring some security and a decent society to them, that we are going to commit ourselves to solving the Palestinian problem because that ultimately is what's gnawing so much at the Arab psyche about our attitude in the Middle East, that we are going to...

VAN SUSTEREN:  Name the Arab leader who you think is going to be the first one to step up to support us.

GINSBERG:  Well, I know that other -- there are those that are right now supporting us.  King Abdullah of Jordan, the king of Morocco, President Mubarak, the president of Tunisia.  There are Arab leaders who do not want to see us fail in this effort.  And we have got to be able to, in effect, empower them to help us succeed, as well.

VAN SUSTEREN:  All right, looking at that tape, is there anything significant about the dress or anything at all that sort of should tip us off about these...

GINSBERG:  As soon as I saw the dress, unlike what I had seen when I was on air with you several weeks ago about the soldier from Ohio that had been captured, they were wearing black.  And they were wearing -- they were wearing the outfit of what I would call a -- not so much someone's about to commit martyrdom, but someone who is about to commit murder in the name of Allah.

VAN SUSTEREN:  And how courageous, with hoods on, so we can't identify them.

GINSBERG:  Well, of course, they're doing that.  You know, I mean, this is what we're facing throughout the Middle East.  They lack the courage to be able to show the world who they are.

VAN SUSTEREN:  In the tape, there's a mention of Bush, President Bush, and also President Musharraf.

GINSBERG:  Yes.

VAN SUSTEREN:  President Musharraf -- is he -- is he helping us as much as he can?  He's in a precarious situation.

GINSBERG:  He's in a precarious situation.  The offensive on the Pakistani-Afghani border failed to apprehend the Taliban and Al Qaeda terrorists that we were after, and now he's pulled his troops back because of the political pressure domestically.  That's not going to make it any easier for us to ultimately win that other war that we're fighting in Afghanistan, as well, without the support of Pakistan.

VAN SUSTEREN:  Ambassador Ginsberg, always nice to see you.

GINSBERG:  Thank you, Greta.

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