This is a partial transcript of "Special Report With Brit Hume," August 8, 2005, that has been edited for clarity.

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JIM ANGLE, GUEST HOST: Sets of talks with two nations apparently determined to have their own nuclear arsenal are in doubt tonight. Six-party talks with North Korea (search) have recessed for three weeks, deadlocked over North Korea’s insistence on some sort of nuclear reactor.

And talks with Iran (search) ended after it rejected a package of economic and political incentives as part of a deal to get Iran to accept tight controls on its nuclear program to prevent the production of nuclear weapons.

Where are we in all of this? For answers, we turn to Peter Brookes, director of the Asian Studies Center at the Heritage Foundation and a former official at the Defense Department and the CIA.

Peter, thanks for joining us.

PETER BROOKES, HERITAGE FOUNDATION: Good to be with you.

ANGLE: Now, today, Iran resumed some of its nuclear activities that had been halted during the negotiations. What are they doing? And does this make it less likely that the talks can be salvaged?

BROOKES: Well, they’re ratcheting up the pressure, that’s for sure. This is an initial step. They haven’t gotten to the point of enriching uranium yet, which would be very dangerous. It could be used for weapons.

So I think they’re ratcheting up the pressure on the EU-3, on the United States. But the big thing, Jim, Tuesday is that the IAEA (search), the U.N.’s nuclear watchdog, meets, the board of governors meets in Vienna, and they will talk about this. There is a possibility they could refer this to the U.N. Security Council.

ANGLE: In which case, you’d essentially have an ultimatum to the Iranians to either give it up or you will face economic sanctions.

BROOKES: There’s a real challenge here, is that Iran believes it’s in compliance with the Nuclear Nonproliferation Treaty. Remember, the Nuclear Nonproliferation Treaty allows you to have a peaceful nuclear energy program. That’s what Iranians say they have.

The other problem is countries like China (search), China who has very tight energy ties with Iran. They signed a $100 billion, 25-year oil-gas deal with Iran. Has said, "We do not support taking Iran to the U.N. Security Council." Very challenging.

ANGLE: Now, some might believe that Iran was pursuing peaceful purposes with its nuclear program if they hadn’t concealed it for 20 years.

BROOKES: That’s right. Absolutely. That’s a real concern. And this could have a major effect in that neighborhood.

Remember, Iran is a Shia Persian country in a Sunni Arab (search) neighborhood. If Iran goes nuclear, other countries, such as Saudi Arabia, right across the Gulf, Egypt, the largest Arab country in that part of the world, could also decide to move in that direction.

ANGLE: So if one of your enemies goes nuclear, you do not want to be left vulnerable yourself.

BROOKES: It’s a classic security dilemma. It’s like keeping up with the Joneses, in terms of an arms race.

ANGLE: And we have the same thing in Asia...

BROOKES: Absolutely.

ANGLE: ... where the North Koreans are doing that, and it makes everybody else in that region nervous.

BROOKES: That’s right. And, of course, if North Korea becomes a de facto nuclear power, a weapons state where it may explode a weapon, it could force or encourage Japan or even South Korea to move in that direction. And then ultimately, Taiwan (search) and China could become involved. It’s very dangerous.

ANGLE: Now, the North Korean talks seem to be, to some extent, back on track. The North Koreans sat back down at the table after a long absence. They seem to be somewhat more amenable to discussing the various incentives that the six-party talks were offering.

Where are we in that set of talks? And that seems vaguely more encouraging than the talks with Iran.

BROOKES: Well, the interesting thing about North Korea is that the North Korean negotiators are on a very short leash. They don’t have a lot of wiggle room. What they’ve probably done is they’ve gone back to Pyongyang (search) and they’re going to have to take this up with the dear leader, Kim Jong Il (search).

And they’ve run out of negotiating points. They’ve made certain points. They’ve got certain responses. They can’t go any further. They’ve got to go back.

The other thing, Jim, is, don’t forget that they’re going to look at what’s going on in Iran. And North Korea, just before the end of the talks, said, "We want to have nuclear reactors, too. We’re allowed to have nuclear reactors for civilian power purposes." And that’s exactly what Iran is asking for, as well.

So they’re watching television, monitoring the Internet, and seeing what’s going on with the Iran negotiations.

ANGLE: Now, the problem with this is that, you know, people are fine with a country developing nuclear power.

BROOKES: Right.

ANGLE: But the same process that produces nuclear power, if taken several steps further, takes you to nuclear weapons.

BROOKES: That’s right. What you can do — when Iran says, "We want to enrich uranium for power purposes to use as reactor fuel," the problem is, is that that same process can make it weapons-grade material, as well. So that’s the real challenge here.

And they have said — the international community has said under the Nuclear Nonproliferation Treaty that you can develop nuclear power, energy for peaceful, civilian purposes but not for weapons. The problem is that it’s only a few steps away from producing weapons.

ANGLE: Now, we’re talking about the North Korean negotiators being on a short leave and having to go back to get instructions. The one thing that’s been difficult to understand in all of this is Kim Jong Il, who one has to say, is a rather odd leader.

I mean, here’s a guy who recently claimed that he’d taken up golf and, in his first round, hit 11 holes-in-one. Difficult to believe, to say the least. And we showed a picture from one of the late-night talk shows recently, was showing him standing with his aides in a very odd array.

Here you go. Here is the picture. And it looks very much like — one of the talk shows pointing out — a Los Lobos album cover. And you see, I mean, with the sunglasses and the guys that — I mean, there is something very odd about this guy. How difficult is it to deal with a country when you have a leader like that?

BROOKES: It’s a real challenge. I don’t think he’s necessarily crazy. He might be delusional. He isolates himself. He doesn’t travel. But he does watch television and he does monitor the Internet. He surfs it endlessly, supposedly.

But he looked through the world through a different prism than we do. And it’s certainly — the regime is based on a cult of personality. The stories go on and on.

The real tragedy here, Jim, is that he’s living well while his people are starving. They spend a third of the GDP, their gross domestic product, on the military. They’ve had a famine going on for 10 years. Over two million people have starved, and it’s a politically induced famine, like most famines are, because of bad economic policies.

So it’s a real, real tragedy. But he’s dangerous, as well. He has one of the world’s largest militaries, spring-loaded to launch into South Korea, if necessary.

ANGLE: OK, so tomorrow we might expect the IAEA to turn to sanctions?

BROOKES: That’s right, turn over to the U.N.

ANGLE: All right, thanks very much, Peter Brookes.

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