This is a rush transcript from "The O'Reilly Factor," August 14, 2008. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: The top story tonight: how the [Russia-Georgia] situation will affect the presidential election. Joining us now from Dallas, FOX News analyst Karl Rove.

All right, so I made a provocative statement there. Your former boss, President Bush, has said Putin spit in his eye. Now you may remember, and I don't know whether you remember this or not, when Putin visited the president at his ranch in Crawford, Texas, and had the hat on and they were running around, I criticized that. I said this is a bad guy. He's a bad guy. And mainstreaming him as some kind of American friend was wrong. I said it way back then. I'm standing by it. What say you?

KARL ROVE, FORMER BUSH ADVISER: Well, look, you want to have a cordial relationship with the leader of Russia in order to make your message heard, but — and I don't think that Putin spit in the eye of the president. What I think he did was threw down the gauntlet to the West and to NATO and to the United States, saying that he was intent upon reasserting control, Russian control over the Caucuses, Ukraine, the former Soviet Republics, now called the "Stans," and the old central European empire of the Soviet Union. And we can't let this stand.

I thought it was interesting. Senator Obama said, let's have a United Nations resolution. Doesn't he recall that Russia is a permanent member of the U.N. Security Council and can veto any resolution? The only time that we have conducted an action under the authority of the United Nations over the objection of the Russians is when the Russians walked out before the Korean War. I mean, they — and this is meaningless to go before the United Nations Security Council…

O'REILLY: No, I believe it's meaningless.

ROVE: ...for a resolution.

O'REILLY: But I think what Obama wants to do is have the resolution and show the world that Russia would veto it and that everybody else is stacked up against Russia. But…

ROVE: Well…

O'REILLY: ...I believe it's meaningless because the United Nations can't do anything. If they can't stop Darfur, which they can't, they can't do anything.

But look, here's my problem as an American, not as any kind of journalist or anything like that. From the jump, I thought Putin was a bad guy, all right? And I saw President Bush do everything possible to convince Putin to be a world player.

In response to President Bush's generosity of spirit, Putin sells missiles to Iran, sophisticated high-tech gear to Iran, our biggest enemy, all right. Does this invasion, and this is an attempt to bring down the Georgian government, a freely elected government, all right. He doesn't respect President Bush, obviously. And he's taunting America, Mr. Rove.

ROVE: Well look, again, this is a broader issue than just Georgia. He's not — this is not just about…

O'REILLY: I got the broad issue.

ROVE: I mean…

O'REILLY: The only entity in the world that could stop the Russians are us. Europe is not going to do it.

ROVE: Well…

O'REILLY: U.N.'s not going to do it.

ROVE: Well, first of all, don't write off the Europeans so quickly. I thought it was an interesting thing on Sunday, the president — this all started on Friday. On Sunday, the president is in communication with Sarkozy. Sarkozy taking a very strong lead in keeping Europe united and putting this on the European agenda. So look, NATO is important, and the Europeans understand the importance of NATO. So I wouldn't write Europe and NATO out of this particular situation too early.

O'REILLY: I would be stunned, because with the national gas and oil that Europe buys from Russia, that they would confront Putin in any meaningful way.

ROVE: Yes. But remember, they understand that if Putin gains control over the pipeline that comes out of Azerbaijan through Georgia and into Turkey, that he will have closed off the access to all that oil and gas that's in the Caspian Sea Basin. And they do not want that.

O'REILLY: Absolutely.

ROVE: They're starting to understand that they have become too dependent upon Russian gas. They saw what happened a year and a half ago when the Russians said to the Ukrainians, "We don't like the way you are doing this. So we're going to cut off your natural gas supplies." They saw the callousness with which the Russians were using their oil.

O'REILLY: Listen, everybody knows — everybody but NBC News knows Russia's the bad guy. Everybody knows that, but the far-left kooks. The problem is we don't know what to do about it. Now we're sending humanitarian aid with a carrier coming in, a U.S. carrier, coming in off of the coast of Georgia. But Putin, you know, he's going to do what he wants to do, Mr. Rove. And at this point…

ROVE: No, look, look.

O'REILLY: ...we don't have enough power to stop him.

ROVE: Yes, well, look, we can't stop him. And look, first of all, this points out the president was absolutely right.

O'REILLY: We can or we can't? We can or we can't?

ROVE: We can. We can.

O'REILLY: We can.

ROVE: In this — we can. And first of all, this shows the president was absolutely right last year when he attempted to get NATO membership for both Ukraine and Georgia. If Georgia and Ukraine were members of NATO, there's no doubt in my mind Putin would have thought twice about doing what he did.

O'REILLY: OK, so why did the Europeans say no? They didn't want to provoke who?

ROVE: Russia, of course.

O'REILLY: Thank you, thank you.

ROVE: Yes.

O'REILLY: So your thesis doesn't hold.

ROVE: Yes, it does.

O'REILLY: The Europeans aren't going to confront — no, it doesn't. The Europeans aren't going to confront Putin, because if they had, as you rightly pointed out, supported the NATO entry, which they didn't, because they're afraid of him. So Putin is basically push, push, push. Go ahead.

ROVE: Well, look, this is going to be a clarifying act for the Europeans. They're going to see now the brutality of this regime. I was in Yalta in Ukraine last month with Shalkazabili (ph). And you could tell that there was a great deal of angst by the nations that were once part of the Soviet empire about Russia's belligerent attitude towards them. And there were a lot of Europeans at this conference…

O'REILLY: All right.

ROVE: ...about 120, 150 European leaders. And they're getting the message. And this will clarify.

O'REILLY: It will absolutely clarify a lot of things.

ROVE: Very interesting — yes, it's very interesting how the Germans are responding, the French are responding, and the Brits are responding.

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