The following is a partial transcript from the April 23, 2006, edition of "FOX News Sunday With Chris Wallace":

"FOX NEWS SUNDAY" HOST CHRIS WALLACE: The nuclear threat from Iran, a political breakthrough in Iraq and the ongoing worry about Usama bin Laden — all good reasons to talk with our first guests, the chairman of the House Intelligence Committee, Republican Pete Hoekstra, and the ranking Democrat, Jane Harman. And they both join us from their home states.

Congressmen, welcome to "FOX News Sunday."

REP. JANE HARMAN, D-CALIF.: Thank you.

REP. PETE HOEKSTRA, R-MICH.: Thank you, good morning.

WALLACE: Let's begin with this new bin Laden tape that we're talking about today in which he allegedly calls for boycotting the West and also appears to justify more attacks on civilians in the West.

Starting with you, Chairman Hoekstra, what do you make of it?

HOEKSTRA: Well, I think it's part of their ongoing and very sophisticated communications effort. Al Qaeda is very sophisticated in the communications, the words that it uses and the techniques that it uses. It's very, very good on the Web, the Internet.

It recognizes that much of this war, this the battle that we're fighting, is about winning the hearts and the minds of moderate Islam, and they are focused on that. We need to be focused on it.

We're probably going to have a hearing early when we get back on exactly the techniques and the sophistication of the methods that Al Qaeda is using.

WALLACE: You speak about it with such evident sense of how powerful it is. Are they beating us, in fact, Chairman Hoekstra, in that war for the minds of moderate Islams?

HOEKSTRA: I've seen what they're doing on the Internet. It is very, very good. It would make a politician proud. They use the right words. They use instantaneous response. They are quick in getting new messages up on the Net.

And the quality of the materials, the quality of the marketing — the message is very, very good.

WALLACE: Congresswoman Harman, your reaction to the tape and exactly this point that Chairman Hoekstra was making about their P.R. offensive, if you will.

HARMAN: Well, the tape reminds us that four years after 9/11, Usama bin Laden is still at large, the subject of the largest manhunt in history, and we haven't been able to find him. Part of the reason is because we've been bogged down in Iraq.

But I agree that he is very sophisticated, and it's not just about Al Qaeda. It's about copycat organizations. Those are the ones that attacked in London and Madrid and so forth. So the world remains dangerous.

Our challenge is to project America in such a way that we diminish this call to arms. Our values have to be out there. We have to govern by the rule of law. We can't send messages that make us look as bad as those who would attack us.

WALLACE: Congresswoman Harman, let's switch, if we can, to Iraq. More than four months after national elections there, the Iraqis have finally chosen a new prime minister, Jawad al-Maliki, designated him as the prime minister to form a new government.

Congresswoman, what do you know about Maliki, and what will you be looking for to see whether or not he's the right man to lead Iraq now?

HARMAN: Well, what I know is they finally agreed on someone, which I take as some good news. But having two officials in this government is not a government. They have 30 days to pick the other cabinet officials, and then their cabinet has to govern.

I think that if the lights don't go on by August when it's 130 degrees out there, which was the case last August as well, I don't know that they will make it.

And oh, by the way, with gas prices as high as they now are and oil at $70 a barrel, I think their first task should be to stand up oil production and have Iraq pay for the reconstruction of Iraq. I don't know how many more $100 billion checks the Congress of the United States is going to write for this.

WALLACE: Congressman Hoekstra, what do you know about Maliki? He's got a reputation, apparently, as a hard-line Shiite. Are you worried that he may not be able or may not be willing to reach out to the Sunnis and Kurds?

HOEKSTRA: Well, I think the first indications are that he is willing to reach out to the Sunnis. It looks like the head of the parliament is going to be a Sunni, perhaps, with some ties to the insurgents who has already told the insurgents that it's time to lay down arms, it's time to bring this country together, and it's time to move forward.

What we really need now is we need action. We need action on the security front, on the economic front and the political front. Not any one of these steps is a magic silver bullet that says OK, we're now successful in Iraq. Each one is one more step forward in a very difficult and what we're finding is a long process.

But this development in the last couple of days is a very, very positive step forward.

WALLACE: Congressman Hoekstra, let's turn, if we can, to Iran where we seemed to get mixed messages this week from the administration. The top arms control official at the State Department said that Iran has got its foot on the accelerator and is approaching the point of no return in its ability to be able to produce nuclear weapons.

On the other hand, the defense chief, the chief of national intelligence, Negroponte, also spoke and offered a different perspective. Let's take a look at that.

(BEGIN VIDEO CLIP)

JOHN NEGROPONTE, NATIONAL DIRECTOR OF INTELLIGENCE: We believe that it is still a number of years off before they are likely to have enough fissile material to assemble into or to put into a nuclear weapon, perhaps into the next decade.

(END VIDEO CLIP)

WALLACE: Congressman, how close is Iran to actually developing a nuclear weapon, or don't we really know?

HOEKSTRA: I'd say we really don't know. We're getting lots of mixed messages. Obviously, we're getting lots of different messages from their leadership, the stuff that they are saying in public.

It all points out the fact we need to do much better in rebuilding our intelligence community, reshaping it, transforming it, making sure that we give public policy — that we give policymakers the information that they need so that we can make better decisions.

We've got a long way to go in rebuilding our intelligence community. We're focused on this in a bipartisan basis, and we're going to keep trying to build the intelligence community that we outlined in the reform bill that we passed a couple of years ago.

WALLACE: But, Chairman Hoekstra, I mean, almost everyone agrees this is the major foreign policy issue or challenge facing this country today, and you're saying we really don't know what's going on in Tehran?

HOEKSTRA: Hey, sometimes it's better to be honest and to say there's a whole lot we don't know about Iran that I wish we did know, and we as public policymakers need to know that as we're moving forward and as decisions are being made on Iran, we don't have all of the information that we would like to have.

And that's nothing more than being honest, being honest with the American people of saying in some of this stuff, we wish we had the information, but right now we don't.

WALLACE: Congresswoman Harman, you've also been quite critical. You say the information we have on Iran is thin. You've said some of it may be, in fact, Iranian disinformation.

How can we be talking about what to do, how soon to do it, the possibility of military strikes, if we really are that much in the dark?

HARMAN: Well, I hope the White House is listening to what Pete Hoekstra just said. We don't know. Our intelligence is thin. I don't think we have enough sources. I don't think our analysis is sharp enough.

I'm not comfortable that even if we knew more that the White House would be listening clearly to the intelligence case. They apparently did not in Iraq. It was not a very strong case.

But those who tried to speak truth to power were shut out. This is not a time to be saber-rattling in our government, talking about the military option. We don't know enough.

And my view is at our peril, we risk any good outcome if we don't join with the world, especially China and Russia, and try to help the U.N. or at least the group of concerned nations isolate Iran if we don't have full transparency into its nuclear capabilities.

Just the fact that the Iranian government is making a lot of noise doesn't prove their capability. Remember, the Iraqi government made a lot of noise, and they had nothing.

WALLACE: Congresswoman Harman, let's change subjects. I want to talk to you about leaks, because the CIA dismissed a senior officer this week, apparently reportedly a veteran named Mary McCarthy, for leaking classified information to reporters including material about secret U.S. prisons overseas for terror suspects.

Congresswoman, after it came out that the president had authorized the disclosure, partial disclosure, of the National Intelligence Estimate about weapons of mass destruction in Iraq, you had the following to say, and let's put it up on the screen. "The president is revealed as the Leaker in Chief."

Congresswoman, do you really see any comparison between these two actions?

HARMAN: You bet I do. I don't know this woman, and I do not condone leaks of classified information. However, while leaks are wrong, I think it is totally wrong for our president, in secret, to selectively declassify certain information and empower people in his White House to leak it to favored reporters so that they can discredit political enemies.

That is wrong. That is unprecedented. I've never, ever heard about that happening in another administration, and it's a double standard.

WALLACE: But, Congresswoman Harman, isn't there a big difference? She was breaking the law. He wasn't.

HARMAN: Well, he wasn't breaking the law because the president claims to have power that no one else has. And he should be reminded that the Constitution starts with Article I, not Article II.

The inherent powers of the presidency are not unlimited. He's been ignoring Congress. He's been refusing to brief the full Intelligence Committees on the NSA program. I think that's a violation of law.

Presumably he's doing that because he's afraid we will leak, and yet he and his administration are the ones who leak selectively. And so I am not condoning what this woman allegedly did in the CIA. Of course, I'm not condoning that. But I think having a double standard is absolutely wrong.

WALLACE: Congressman Hoekstra?

HOEKSTRA: Well, it's clearly not a double standard. The president, the executive branch, but especially the Office of the President — the courts have clearly said they have the responsibility and the authority to decide what is classified and what is not classified.

This person in the CIA thought that they were above the law. They thought that the law did not apply to them. They have put America at risk. They have put our troops on the front lines at risk because they broke the law.

That is exactly — you know, you're exactly right. They broke the law. They're above the law. It's wrong. You know, and the country and our troops are at greater risk because of the decisions that this person made.

WALLACE: Finally, and we have less than two minutes left, your committee issued a very critical report. This week is the first anniversary of the creation of the director of national intelligence.

And your committee, as I say, issued just a couple of weeks ago a very critical report in which you said that Director Negroponte, if he continues on the path that he is — and let's put it up — will create another layer of large, unintended and unnecessary bureaucracy.

Starting with you, Chairman Hoekstra, what's the problem?

HOEKSTRA: Well, Jane and I both have a passion for creating a quick and nimble and effective intelligence organization where the Office of the DNI is a chief executive officer directing the agency and directing long-term strategic planning.

We've got a passion for getting this right. We're going to monitor it. We're going to work with the director to make sure that it's not a new level of bureaucracy, but it makes the entire intelligence community more effective because that's what we need against the threats that we have out there today.

It was a shot across the bow to Director Negroponte, saying we're watching, we need to work together, we've got a lot of challenges, let's move and let's move together.

WALLACE: Congresswoman Harman, we've got about 30 seconds left. Bottom line, is our intelligence in the war on terror today better or worse, sharper or, you know, more in the dark, about what's going on than it was a year ago?

HARMAN: It is not good enough. And the concept behind intelligence reform was to create a unified command structure, much as we have in the military, a command structure across 15 agencies, not a bureaucracy.

We've said that Mr. Negroponte should stop calling himself ambassador. He's a director. In order to change cultures, you have to lead. You have to make some people mad at you. You have to send new signals.

We've got to have better intelligence on Iran. We've got to have better intelligence on the battlefield in Iraq. We've got to know more about what China and Russia are up to. It's a very dangerous world, as this new UBL tape makes very clear, and we are still behind the curve, and it worries me very much.

WALLACE: Congresswoman Harman, Congressman Hoekstra, thank you both so much for joining us today, and please come back.

HOEKSTRA: Great. Thank you.

HARMAN: Thank you.