This is a partial transcript from "On the Record," Sept. 20, 2004, that has been edited for clarity.

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GRETA VAN SUSTEREN, HOST: An American beheaded in Iraq. Just hours ago, video posted on an Islamic Web site confirmed the brutal murder. American contractor Eugene Armstrong was beheaded by terrorists aligned with Abu Musab al-Zarqawi (search), an Al Qaeda (search) associate.

Fox News Foreign Affairs Analyst and former ambassador to Morocco Marc Ginsberg joins us now.

Ambassador, you can read Arabic. What's the Arabic press saying about this story?

MARC GINSBERG, FORMER U.S. AMBASSADOR TO MOROCCO: Well, first and foremost, Greta, the Arabic press is reporting the fact that this is first of three hostages out of 55 civilians that have been killed and that, despite all of the bombings in Fallujah, one Web site, which is very sympathetic to the Jihad and Tawhid (search) group, which is Abu Musab al-Zarqawi's terrorist group in Iraq, is basically saying, "You see, Americans, we are still here and we are going to drive you out and we are going to attack all of the civilians that are working for you because they really are working for you."

And they call George Bush a dog in this, which is, in Arabic, one of the worst things you can do. It one of the worst curses you can say in Arabic against anyone and so the one Web site in particular is aggrandizing the fact that this beheading took place.

VAN SUSTEREN: Is it applauding it? Is it saying this is a great thing, this sends a message to Americans?

GINSBERG: Well, the ostensible reason why apparently — if there's any justification for this gruesome, horrible murder — and my sympathies to the family and the families of the other civilians that are being held, including the British civilian — is that they claim they want to get the women who are held by American authorities out of Iraqi prisons.

The only prominent Iraqi that's being held there is Dr. Rashid, who is otherwise known as Dr. Germ. Now I can't possibly believe that Abu Musab al-Zarqawi is interested only in her. There must be other women that this group claims that they want.

But this is just camouflage. Look, Greta, the bottom line is that there is nothing in the Quran, nothing Islamic that justifies this type of atrocity, and, more importantly, we haven't really engaged in having Americans go and prop up the Islamic clerics in the Middle East, including Grand Ayatollah al-Sistani, to make a fatwa against these terrorists who are committing these type of atrocities.

VAN SUSTEREN: Well, would that be effective? I mean, if you look at what's going on in Iraq, two Sunni clerics were assassinated, apparently, in the last 24, 36 hours. I mean, what's going on there? It doesn't seem like anyone wants to sit down and fix things. It's an all-out war there.

GINSBERG: Well, you can come to that conclusion. I'm prepared to say that there are still many Iraqis that want to avoid the civil war. Abu Musab al-Zarqawi, when we intercepted a memo that he had written to bin Laden just a few months ago, wanted to provoke that civil war. Killing Sunni clerics and blaming it on the Shiites is part of the strategy.

Grand Ayatollah al-Sistani, who is really not having any direct contact, with the United States authorities and, frankly, doesn't want to without there being at least some effort to try to bring about that contact needs to be brought into this. There are other clerics.

VAN SUSTEREN: But the thing is if you talk about even the Iraqis, there's — I mean, I have seen — and I don't read Arabic, obviously, but I've seen no report of any condemnation by the Iraqis when an American civilian gets beheaded. And, in fact, I mean, even Iraqis are running into problems. You have the Kurds that were beheaded recently.

There are many different ethnic groups who are getting beheaded and killed and attacked there.

GINSBERG: Greta, I continue to read the Iraqi media and try to listen to some of the Iraqi radio that is coming out of Iraq. There is significant condemnation on the part of the Iraqi media and Iraqi press against these attacks.

VAN SUSTEREN: Which is great news for us.

GINSBERG: Iraqis are suffering under enormous security threats themselves. They know that if the Americans and others are driven out that the reconstruction will come to an end. They know that Abu Musab al-Zarqawi wants to start the civil war. They're losing confidence in their own government to try to stop him as well as the crime and terrorism that's taking place.

And so, essentially, they're saying where is the support that we can get from elsewhere that is going to find a way to restore some stability in the country because, clearly, their point is the Americans can't accomplish that objective.

VAN SUSTEREN: There's another American who was kidnapped with him as well as a Brit. Is there anything that you read in the Arabic press or any of the Arabic Web sites that suggested they are willing to spare their lives?

GINSBERG: No. If anything, the continuation of the threat is that we killed this first hostage, and, within 48 hours, if you have not released other women from the prisons, we will kill the next hostage, and we will keep killing the hostages and keep kidnapping until you release everyone who we believe needs to be released.

VAN SUSTEREN: And, apparently, these three knew something was up because their Iraqi guards had suddenly started failing to show up for work at their house to protect them. So they were even suspicious that they were targets.

GINSBERG: This is the underlying dilemma that we face in Iraq, is that who do you trust, who can you actually trust to not rat on where Americans are located, what's the soft underbelly of where American forces are, and this...

Part of the problem here, Greta, is that the number of resistance supporters has grown significantly. This is what the U.S. embassy reported to me just the other day, far more than the Pentagon itself has been willing to admit.

VAN SUSTEREN: All right. Well, let's hope the other two who were kidnapped with him are spared.

GINSBERG: God willing, as they say.

VAN SUSTEREN: Nice to see you.

GINSBERG: Thanks, Greta.

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