This is a partial transcript from "On the Record," December 28, 2006, that has been edited for clarity.

GRETA VAN SUSTEREN, HOST: Tonight: Get ready. They are feuding on fire. That's what I call it. The TV titans are at it again, another round in the Rosie-Trump war of words today, and it just keeps getting nastier. The trash talking began when Rosie dissed Donald for giving Miss USA a second chance. He fired back. He called her a loser. And the ugly schoolyard back-and-forth is escalating. The latest? He's a pimp, says Rosie. She's a low-life, says the Donald. There's no end in sight, or at least not in the next few minutes because joining us by phone now, the Donald, Donald Trump.

Welcome, Donald.

DONALD TRUMP, PRES. & CHAIRMAN, TRUMP ORGANIZATION: Hi, Greta.

VAN SUSTEREN: So Donald, how did this feud get started?

TRUMP: Well, it all began, as you said, when I gave a very lovely young woman, Miss USA, Tara Conner — when I gave her a second chance. Rosie hated the fact that I gave her a second chance, hated it. She went on "The View." I got calls from people saying that Rosie was spewing all sorts of venom. She went on "The View," and she just went crazy.

And you know, I believe I did the right thing. I know I did the right thing. I gave somebody who was in trouble a second chance, not a bad thing to do. And Rosie is a low-life. I mean, I've known Rosie for a long time. She's not talented. She's not smart. She's not funny. She's a bully, and she bullies people around and they don't fight back. Well, I fought back, and I think I've exposed Rosie really for what she is, which is not much, not a very smart woman and certainly not very attractive.

VAN SUSTEREN: What's the rub about — why would she even care that you're giving someone a second chance?

TRUMP: Well, she'd probably want to give her a second chance. She gives plenty of women second, third and fourth chances. And you know, as far as I'm concerned, Rosie is — hey, the toughest situation that I can imagine is being Rosie's girlfriend in this case, Kelly (ph). She seems very nice. But can you imagine Kelly having to kiss this woman good night? I mean, Rosie to me is absolutely the pits. I know Rosie for a long time. You know, I've known here for a long time. I understand the real Rosie. She's a nasty person who's not very smart.

VAN SUSTEREN: When you say you've known her a long time — let's go back. When did you first meet Rosie?

TRUMP: Well, I've met her, you know, over the years. I've seen her perform once. She's been — she's worked for me at my places every once in a while. I've seen her perform. I never liked her performance. I never liked her humor. It's nasty humor. But I've never liked her.

I was at one performance where practically everyone walked out because her mouth is so foul. She's not a very talented person. Interestingly, she failed with her show. You know, her show did very poor ratings. She went off the air. She then did a magazine which was a total catastrophe, I mean, a total disaster, called "Rosie." In fact, the head of the company was, like, on a rocket ship. He had a great career going. He was going only in one direction. Because the magazine failed so badly and because she was so nasty to him and because the guy just didn't know how to fight back, he ended up losing his job. So he went from being the star to losing his job over Rosie's failed magazine.

And Barbara Walters, who's a friend of mine, she resurrected Rosie. She took Rosie out of the garbage dump. Rosie had just failed with the show, the magazine, the whole thing. She was down at a low point, and she resurrected her. And I can tell you, Barbara called me a few days ago. Barbara is no fan of Rosie.

VAN SUSTEREN: What did she say to you?

TRUMP: She said very simply, Donald, I have to put up with it.

VAN SUSTEREN: And did you ask beyond that? I mean...

TRUMP: No, I don't care. I mean, look...

(CROSSTALK)

VAN SUSTEREN: How did the conversation start?

TRUMP: What's Barbara going to say? Is she going to say, you know, I'm going to fire her? I think, eventually, she probably will fire her. And you know, the sad part is, "The View" has not done well in ratings. They're doing a little better this year because people like me — I mean, frankly, I watched Kelly Ripa. She was treated very unfairly by Rosie. I watch other people get just — just lambasted by Rosie. For some reason, they don't fight back.

When I went after Rosie, the next day, Rosie went on "The View," didn't say a word about me, not one word, and in fact, she was, like, pathetic. She was stumbling. She was fumbling. She was stuttering. She was, like, gone. Her girlfriend was sitting in the front row to give her some courage.

But Rosie's a bully, and when you hit a bully between the eyes, the bully always falls, and that's what happened.

VAN SUSTEREN: Donald, do you think this feud — because it's gained so much attention. I mean, all the cable shows have been doing it. It's all (INAUDIBLE) Is this going to actually help the ratings on "The View"? Because there certainly is a lot of intrigue right now, at least among some people, about this feud.

TRUMP: Well, sadly, I'm helping the ratings on "The View." And I've been on "The View," and they're fine and it's find. But it's not a big success show. Sadly, this helps the ratings on "The View," but long-term, Rosie will fail, just like she's always failed. I believe she has essentially a death wish. But long-term, I believe that Rosie will fail very, very substantially. I think she'll end up being fired. Nobody can stand her. And certainly, Barbara Walters has said to me she does not like Rosie.

VAN SUSTEREN: Prior to this — prior to you giving Miss USA a second chance, and the fights escalating with Rosie, did you have any sort of friendship with Rosie at all?

TRUMP: Well, again, Rosie actually came to my wedding to Marla. She was actually at the wedding. It wasn't that I wanted her there. I guess Marla wanted her there, but I certainly didn't want her there. Rose is somebody that I've known over the years. She's just not somebody I've ever respected. And you know, sadly, she probably figured that out pretty easily.

And when it came time to really — you know, for doing something that I think was the right thing, giving somebody a second chance who right now is in rehab and doing very well and I think is going to be really an example for a lot of young men and women, and older men and women, too, by the way — when I gave her the second chance, Rosie went nuts. The beauty is, when I attacked Rosie, she was, like — you had to see her the second day. It was like a totally different person, stumbling and fumbling.

VAN SUSTEREN: So where does this fight go? I mean, if you and I are talking a month from now, what do you think is going to — what will have transpired in the preceding 60 days, do you think?

TRUMP: Well, I'd rather be...

VAN SUSTEREN: Or 30 days.

TRUMP: ... talking about more important things. Rosie is not an important subject. Rosie is somebody that I don't enjoy talking about because I don't find her interesting. I mean, I know her. She's no intellect. She's not smart. I don't think she's funny. I guess some people like her humor, but not very many. I don't think — she's controversial, and that's what's helping her right now. But ultimately, the controversy I think leads to her destruction.

I'd rather be talking, especially on FOX — I'd rather be talking with the fact — you know, what's happening in Palm Beach right now. They're asking me — I have a club called the Mar-a-Lago Club, which is the great mansion of Marjorie Merriweather Post and E.F. Hutton. I put up the American flag, and the town of Palm Beach wants me to rip down the American flag. They want me to take it down because they say I put it up without permits. And I'm saying, You don't need permits to put up the American flag. I would much rather be talking about the American flag then some slob like Rosie.

VAN SUSTEREN: All right, let's talk for a second about the American flag. You are suing Palm Beach because they have this — they've objected to your flag, is that right?

TRUMP: Well, again, I have a club, a very successful club. It's the largest house in Palm Beach by far, one of the largest houses in the country. I put up a flag that's a similar proportion to the flag at the White House. The building is actually bigger than the White House. And everyone loves it. Everybody is in love with it. The flag looks magnificent. Proportion, everything is absolutely beautiful.

The town of Palm Beach wants it taken down. Now, if you went for permits with Palm Beach, they would have absolutely never given it to you. There's no chance of giving it to you. So they would have absolutely never given it. But the town of Palm Beach wants me to rip down the American flag, which is, in my opinion, an absolute desecration and a disgrace.

And everybody wants it. Everybody loves it. We're getting mail 100- to-1, literally 100-to-1 in favor. So I would much rather be talking about something like that, which is important, than talking about the Rosie thing.

VAN SUSTEREN: Is this — I mean, the flag is a large one, I understand. What is it, about a 50-foot flag?

TRUMP: The flag is not really large, it's just a proper proportion for the property. It's a large flab, but not by any means the largest flag. It's a proper proportion for the property.

VAN SUSTEREN: Would they — would they be agreeable if it were a smaller flag? I'm trying to figure out, you know, what the dispute is. It is the size of the flag or the actual flag?

TRUMP: It's over the size of the flag. They want a flag to be put on that's four feet by six feet. You know what that is? That's the size of a small door. The flag of four by six on a tiny pole. If you put that up in front of Mar-a-Lago, it would look ridiculous. This flag has beautiful proportion to the house.

I mean, that's what I do. I've made a lot of money building buildings. I know what sells. I know what doesn't sell. I know what things are supposed to look like. The proportion here is absolutely correct. It's right. Everybody loves it. The town wants its ripped down. They want the flag ripped down. It's a disgrace. It's a desecration. And it really is very sad for the country, and especially nowadays.

VAN SUSTEREN: All right. This flag — right now, I assume that you have not taken the flag down, is that right?

TRUMP: Oh, I have not taken it down. No, it's just the opposite. I sued the town of Palm Beach for $10 million for discrimination, for harassment, for lots of other things, with all money to be going to the returning Iraqi war veterans, the soldiers that have been so brave to go over to Iraq.

VAN SUSTEREN: And hasn't the town sort of figure out that maybe this isn't a — you know, a good fight to get into, whether — whether the — or I don't know what the laws are or the rules are, but that this isn't a particularly good fight to pick?

TRUMP: Well, it's inconceivable — frankly, it's inconceivable that they haven't figured that out yet. I think they will because I think law's on my side. You don't need permits to put up the American flag.

VAN SUSTEREN: All right, let's go back to Miss USA. You said she's doing well, Donald?

TRUMP: She is doing well.

VAN SUSTEREN: And when do you expect her to get out of rehab?

TRUMP: I would say probably a week-and-a-half. And my people say that things are really going nicely for her.

VAN SUSTEREN: And then she resumes her responsibilities as Miss USA, which includes what? What would you expect her to be doing? What...

TRUMP: Well, she does a lot of things. I mean, they visit dignitaries from all over the world, heads of countries, heads of state. They do lots of charitable work, breast cancer work, AIDS work, lots of different charities, raise tremendous amounts of money.

And it is a hard — you know, it is a hard life. This is a young girl from Kentucky who's very beautiful, who came to New York and got swept away, like so many other people. I mean, they come to New York, the "Big Apple." It's a tough place, as you know, Greta, and she just got swept away and into a certain life that she never knew before, and certainly not to that extent, and it's been a tough period of time for her.

And I wanted to give her a second chance. And I will tell you, even the people at the Miss USA pageant — it's Miss Universe, Miss USA — even the people at the pageants wanted her out. They wanted her out. They didn't want to give her a second chance. I didn't want to do that. It's two weeks before Christmas. The last thing I wanted to do is ruin somebody's life. I mean, you take it away from her, you ruin her life, in my opinion. So I gave her a second chance. I thought it was a nice thing to do, and that's when Rosie came and spewed her venom.

VAN SUSTEREN: Do you think Rosie's venom was directed at her or was this really directed at you?

TRUMP: Oh, it was totally directed at me. I mean, Rosie would love to kiss this girl good night. I mean, this is only directed at me, Greta, believe me.

VAN SUSTEREN: And in terms of — and Barbara Walters — is she the one who originated the phone call to you or did you call Barbara after this...

TRUMP: No, Barbara called me. Barbara apologized. Barbara told me that she's got a terrible situation going with this woman, that nobody likes her, and just grin and bear it. Barbara said, Let's wait until January, and we'll get it all straightened out and you'll come on the show. I said, No, thank you.

But you know, hey, look, Barbara's terrific. She's been a friend of mine for a long time. There's nothing she can say but to justify Rosie, but she cannot stand Rosie O'Donnell. That I can tell you.

VAN SUSTEREN: Are you saying that you will not go on "The View " with Rosie under any circumstances and sort of — whether it's duke this out or however you want to characterize it?

TRUMP: Well, I've been on "The View," many times. In fact, I was on fairly recently doing "The Apprentice." "The Apprentice" comes on on January 7. "The Apprentice" ratings have been extremely good. In fact, the last show that we had finished number two for the week. At certain points, "The Apprentice" was the number one show on television. It's been an amazing success.

I've been on "The View" many times, but I have no intention of going back on "The View." They did something that I thought was despicable. A friend of mine is Danny DeVito. Danny DeVito went on "The View." I saw a clip of it. He was really funny. He was absolutely funny. He was brilliant. They sent out a release and started spewing that he was a drunk, that he was an alcoholic.

And I called Danny DeVito, and I said, You ought to challenge those people because you weren't at all drunk. You were really funny. You were hitting on all 12 cylinders. And you ought to go and challenge those people. He told me, No, Donald, I don't want to do that. I don't — I said, But Danny, there was nothing wrong with you. You were great. He said, Well, I don't want — "The View" put out something and they put out the word that he was drunk, and he was not drunk. So that's when I lost respect for "The View." And frankly, Rosie I never had respect for because I know her too well.

VAN SUSTEREN: Is — was — when — Barbara Walters, though, wasn't she on the day that Danny DeVito was on? And did you take that up with her?

TRUMP: Well, I really don't know who it is, I'm just saying it was the show. And I'm not blaming, you know, the slob O'Donnell for that. I'm just saying that the show itself put out something that Danny was drunk. Danny wasn't drunk. I watched it. He was really funny. If anything, it was the opposite. He was totally on. And I said, You ought to hold a news conference and challenge it, Danny, because it was all over the press that Danny DeVito was drunk, and he wasn't drunk.

VAN SUSTEREN: Do the things that Rosie says — I mean, she said some pretty nasty things. There's been an exchange back — do they ever hurt?

TRUMP: It's not a question of hurting. I like the truth. You know, if somebody says the truth — I'll give you an example. Last month, I was on the cover of the "Forbes 400." That's the richest people. I was on the cover. I'm their cover, the richest people. And Rosie said that in the 1990s, I went bankrupt. Now, I never went bankrupt. She knows I never went bankrupt. In fact, she said I went bankrupt three times, and I never went bankrupt.

So you know, she lies. She lied about many other things, and now today, she comes out with the word "pimp." Now, do you notice she didn't mention my name? She talked about this, like, almost a fictitional character. But she never mentioned my name.

Rosie lies. Rosie's got problems. But I've known that about Rosie a long time. The world I think has now — they really get to understand the real Rosie, and I brought that out. But other people should have brought it out before me.

VAN SUSTEREN: All right, Donald, thank you for joining us. And happy New Year, Donald.

TRUMP: Well, thank you very much. Greta.

VAN SUSTEREN: Thank you, Donald.

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