Updated

The following is a transcribed excerpt from 'FOX News Sunday,' September 12, 2004:

CHRIS WALLACE, FOX NEWS: On this third anniversary of the worst terrorist attack ever on U.S. soil, we're honored to be joined today by Secretary of State Colin Powell (search).

Mr. Secretary, welcome. As always, good to have you with us.

COLIN POWELL, U.S. SECRETARY OF STATE: Thank you, Chris. Good to be here.

WALLACE: North Korea (search), what do you know about the explosion there this week, and do you believe that they're preparing to test a nuclear weapon?

POWELL: We've seen reports of this explosion, but based on all the information that we have, it was not any kind of nuclear event. We're trying to find out more about it and what exactly it was, if anything. But it does not appear to have been a nuclear event.

With respect to reports in the paper this morning that there is activity going on at a potential nuclear test site, we're monitoring this. We have been watching it. We can't tell whether it's normal maintenance activity or something more. So it's inconclusive at this moment, but we continue to monitor these things very carefully.

WALLACE: And is there anything you're doing, any message you're sending to the North Koreans, saying, "Don't take this step"?

POWELL: The North Koreans know this would not be a sensible step for them to take. And it is not just the reaction that they might see in the United States; it's their own neighbors. I mean, they are involved in a six-party framework discussion with the United States and South Korea and Japan and China and Russia. And I think their neighbors would view such a test with great alarm. And for that reason, we'll continue to monitor North Korea.

But remember, all six parties, to include North Korea, say that they are committed to the denuclearization of the peninsula. And that continues to be the goal of the United States and its partners in this effort.

WALLACE: All right. You said this week that our world is safer than it was three years ago on 9/11, but also that there's more work to be done.

This week, Al Qaida's number-two man, Ayman Al-Zawahiri, appeared on a videotape promising to attack U.S. forces. There was a bombing outside the Australian embassy in Jakarta that killed nine. And, of course, there was that terrible attack on that school in Russia that killed hundreds.

How serious is the threat today that Al Qaida or related groups can still hit the U.S. or American interests around the world?

POWELL: It's serious, and not just to American interests, as you described. The assaults in Russia against two airliners, bringing them out of the sky, and against a subway station, and then that horrible scene at the school in Beslan. This kind of terrorist activity no one is immune from it. And so it suggests that we have to do even more together to make sure the civilized worlds join together in the war against terrorism.

Now, fortunately, we have not had another attack like 9/11 over the last three years. President Bush has done everything we can do to protect the nation: the creation of a department of homeland security, better job on our borders, knowing who's coming into the country, more cooperation between our intelligence agencies and between our intelligence and law enforcement agencies and those of other nations. More and more nations are joining in this campaign. The Saudis are going after terrorists in the kingdom in full force.

And so I think that we are safer, but we're not safe yet. There are people out there who wish us harm. And the Russians have people who wish them harm. The Indonesians, the same thing.

And I think what we have seen is that all nations that are civilized and do not accept this kind of action as representing any sort of legitimate political cause are coming together to fight these terrorists.

WALLACE: Mr. Secretary, the central criticism of this administration's war on terror is that all of you took your eye off the ball in Afghanistan and got sidetracked into Iraq. Osama bin Laden is apparently still out there. There are reports that Taliban and Al Qaida forces are regrouping.

Wouldn't we have been better off if we had finished the job in Afghanistan before going into Iraq?

POWELL: We are finishing the job in Afghanistan. We have 18 individuals running for president in Afghanistan. Consider where we were three years ago when the Taliban was running this place. We have 18 individuals, to include the current interim president, Mr. Karzai, competing for an election that's going to take place in early October, to be followed by parliamentary elections. The country is in the process of being reconstructed. NATO is there, under the command of a French general, helping to secure the country.

And so we didn't take our eye off the ball in Afghanistan. Yes, Osama bin Laden is still out there and he's being chased. He's being pursued. We've got the Pakistanis playing a much more aggressive role in their frontier areas to go after Taliban and Al Qaida remnants.

We didn't take our eye off the ball. But Iraq was a danger the president felt strongly we had to deal with, and we dealt with that too.

Two terrible regimes are gone. Fifty-five million people are getting ready for elections in Afghanistan and in Iraq. We're fighting a difficult insurgency in Iraq. But we have to make sure that we prevail over that insurgency — not just us, but the Iraqi interim government, as well.

And we will prevail. And there will be elections.

WALLACE: Let's talk about Iraq, because there was a sad milestone this week. Now more than 1,000 Americans have been killed. And, as you say, the fighting there seems to be getting worse, not better.

More U.S. troops have died since the handover of power on June 28th than died during the actual fighting during the invasion. Insurgents control parts of central Iraq and Baghdad. And U.S. Secretary-General Annan says the violence threatens the possibility of elections in January.

Couldn't this go on for years?

POWELL: It will go on for some time. This insurgency isn't going to go away. But with the buildup of Iraqi security forces, which is well under way now — a lot of money is going into these forces, and they're being trained and equipped, more police forces, more military forces, more national guard forces, border patrol forces — increasingly, Iraq will be able to deal with its own security problem.

And I think the insurgency can be brought down to a level, and I'd like to see it go away entirely. I want to see it defeated. But I think, over time, you will see it being brought under control.

We said at the time of turnover that this is the time of maximum danger as the insurgents come after us. Why? They don't want this new government to succeed. They don't want elections to take place. They want to go back to the past. They want to go back to the days of Saddam Hussein and developing weapons of mass destruction, filling mass graves, human rights violations. And we're not going to let them go back. We can't let them go back.

And so this is not the time to simply take counsel of our fears and say, "Oh, this is terrible, terrible." We've faced challenges like this in the past and we've overcome them, and we'll overcome them in this instance, as well.

WALLACE: As I mentioned, U.N. Secretary-General Annan says that he thinks the violence could threaten these national elections that are the next key moment.

POWELL: And...

WALLACE: Let me just ask you, can you sit here and say today those elections will be held in January?

POWELL: I can say to you right now that the prime minister, Mr. Allawi, is determined to go forward with these elections.

You mentioned several cities in the Sunni triangle that are in some state of siege right now. In fact, insurgents are controlling one or more of them — Fallujah being the one that I have in mind.

POWELL: Some of the others, such as Samarra, we are slowly working with the Iraqi government, helping them restore control there and to put legitimate authority in there.

And so our strategy for the next several months, our political and military strategy, will be to recover each of these places and put them firmly back under civilian control, under the control of the Iraqi interim government, so that elections can be held.

But there are so many other towns and cities throughout Iraq that are not under insurgent control. They're under control of a government that is becoming increasingly capable with each passing day.

WALLACE: John Kerry now says that Iraq is the wrong war at the wrong place at the wrong time. Is any of that right?

POWELL: It is a war that succeeded in removing a dictator — a dictator who was a threat to his own people, a threat to the region and a threat to the international order. And so we did the right thing at the right place and the right time to get rid of that dictator and to give the Iraqi people a chance for peace.

You would almost think that it is the fault of the United States that these terrible people, these insurgents and terrorists are out there. They are the ones that we ought to be focusing our energy on defeating and not just wring our hands about the fact that it's going to be difficult.

It is going to be difficult. And we didn't underestimate that difficulty. That's why we're leaving a larger force there.

WALLACE: But wait, the president said he did miscalculate.

POWELL: We did miscalculate the difficulty. We were not miscalculating the challenge we're facing now. And that's why secretary Rumsfeld has left a larger force there than we expected to be leaving there a few months ago. When the situation changes, you adjust to the situation.

The solution here is to make sure that we keep a strong coalition force there and we build up Iraqi forces as quickly as possible to bring this insurgency under control.

WALLACE: Senator Kerry's main strategy, he says, is that he could get more nations to contribute more troops and more money to help us in Iraq. Is there something that you, as secretary of state, are not doing?

POWELL: Well, I'm not sure what Senator Kerry has in mind. Perhaps he'll be more specific as to how he's going to get France and Germany and nations like that, or Russia, to contribute troops. We made it clear that...

WALLACE: Do you think there's anything that could be done to get them to contribute?

POWELL: They've said clearly they're not going to contribute troops. They're going to participate in reconstruction efforts, they're going to support us in the U.N. politically and diplomatically. But I have seen nothing to suggest that there is any incentive or anything one can do with these nations that would cause them to change their very strongly held policies that they are not going to put combat troops into Iraq.

WALLACE: So when John Kerry says that's his...

POWELL: I can't speak for Mr. Kerry, and I won't speak for Mr. Kerry. I'm just saying...

WALLACE: Are you saying that's a false...

POWELL: I'm not going to say anything. I'm going to say that we have worked with France and Germany and Russia and a number of other countries that feel likewise, and they have made it clear that under no circumstances do they intend to put troops there.

Now, the other side of that coin is that so many nations have been willing to put troops there. Some 30 nations are standing alongside us in Iraq, and there are 40 nations involved in the coalition in Afghanistan. A French general commands the NATO force in Afghanistan. So there are nations who have been willing to stand up to these challenges. And when the going got rough, they stayed with it. And they're taking losses.

Why are they doing that in the face of public opinion that is of a different mind? They're doing it because they know they're doing the right thing. They're doing it in order to give the people of Afghanistan and the people of Iraq the same thing that they have acquired since the end of the Cold War, and that's freedom and the opportunity to pick your own leaders.

WALLACE: Mr. Secretary, in your 1995 autobiography, you wrote the following: "The policies determining who would be drafted and who would be deferred, who would serve and who would escape, who would die and who would live, were an anti-democratic disgrace. I am angry that so many sons of the powerful and well-placed managed to wangle slots in Reserve and National Guard units."

Does First Lieutenant George W. Bush fall into that category?

POWELL: I disagreed with the policies that were in place at that time. I didn't think it was the right set of policies for the challenge the nation was facing. But those are the policies that were in place at that time.

And President Bush and Senator Kerry volunteered to serve their nations under the policies that were in place. And they both served honorably, and they both were discharged honorably.

With respect to where we are now, we have a voluntary army. And if we ever go back to conscription — and I don't think we will have to go back to conscription under any sort of circumstances I can see — I hope that at time it will be the kind of conscription that was put in at the end of the Vietnam War. And that is, everybody is equally liable to be called to serve the nation in time of conflict.

POWELL: But, you know, we shouldn't linger about what might or might not have been done or happened 35 years ago. I think what the American people want to know now is, what are we going to do today, what are we going to do tomorrow, what does the future look like?

WALLACE: Do you feel the same way about attacks on George Bush's service in the National Guard as you do about attacks by the Swift Boat Veterans on John Kerry's service in Vietnam?

POWELL: Both men volunteered to serve their nation under the policies that were in existence at that time. Both men did serve their nation, and both men were honorably discharged.

And the last thing I'm going to do is get involved in this debate about who did what when and who earned what where and who was where when.

WALLACE: A couple of questions, important questions, I want to ask you, and we're beginning to run out of time.

This week you took a big step and called what's been going on in Sudan "genocide." And the U.S. has drafted a U.N. resolution that threatens consideration of sanctions if Saddam's government does not stop the violence.

Critics say, one, there's no deadline and that the U.N. made the same threat in July. Why isn't the world taking action, and is there anything you, as secretary of state, can do to push harder?

POWELL: Well, we've done a lot as an American government. We have been in the forefront of this issue and this effort for months.

We arranged the cease-fire in April, which has been tenuous and hasn't been as successful as I would have liked.

I went to Darfur in Sudan earlier in the year. Kofi Annan was there with me. And between, I think, our two efforts, we succeeded in opening up the humanitarian pipeline. Now we've got to fill it with more donations and more money coming in.

Where we have not had success of the kind we were hoping for was to bring the security situation under control. And the Sudanese government has to do more. That's why this resolution is strong.

Now, the question is, well, why didn't you apply sanctions right away? Well, you know, the Security Council is a body of 15 nations, and we put forward a strong resolution, but you already see that there are a number of countries on the council that don't want to see a resolution that tough. And we're going to have to work our way through this as an international body.

The United States will continue to lead the way and show the way and put pressure on the Sudanese government and put pressure on the Security Council to take action.

WALLACE: Finally, it was the conventional wisdom in this town that Colin Powell couldn't wait to leave office at the end of the president's term, but recently there have been suggestions that maybe, just maybe, that you'd like to stick around in a Bush II term, assuming that he gets reelection.

Would you consider it?

POWELL: The only wisdom that is about on this subject, whether it's conventional or unconventional, is that I serve at the pleasure of the president.

WALLACE: But would you consider it, if he said to you...

POWELL: I serve at the pleasure of the president. And this is a matter for the president and I to discuss to determine mutual pleasures.

(LAUGHTER)

WALLACE: Mutual pleasures.

Mr. Secretary, thank you so much. Always a pleasure to have you.

POWELL: Thank you, Chris.

WALLACE: Thanks an awful lot.