This is a rush transcript from "On the Record," June 19, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Former U.S. ambassador to the United Nations John Bolton joins us live. Good evening, Ambassador. And with the Ayatollah that now saying, either, you know, Stop or else, what -- what do you foresee as the -- or what does "or else" mean, in your mind?

JOHN BOLTON, FORMER U.S. AMBASSADOR TO THE U.N.: Well, I think it clearly means a crackdown by the security forces. You know, up until now, Mousavi and the demonstrators have been technically, at least, within the law. They're appealing the election results. They've asked for a recount. But what Khamenei's speech today did, basically, was to say, We're finished with the legal process. The decision is clear. And now, candidate Mousavi, if you speak out against this decision, you're not simply contesting the election, you're going against the regime.

So Mousavi unquestionably stands at the Rubicon tonight, and a lot will depend on what he has to say. I haven't seen reports that he has said anything since Khamenei's speech, which, by the way, was at the Friday prayers, the worship services for the Muslims of the country, a very important symbolic step by Khamenei to use the Friday prayers to get his message out.

VAN SUSTEREN: Well, when you look at these crowds, you look at some of the violence, some of the video that we do have, the fact that media is essentially being pushed out of the country -- there are a few still there like George McLeod -- and this hasn't happened in 30 years, and you've got the supreme leader now coming out and making this statement, it doesn't seem like this is in any way going to quiet down. It almost seems like it's really going to that brittle breaking point. And then what happens?

BOLTON: Well, again, I don't think we know what Mousavi himself will do. He may decide that it's time to pack it in. That doesn't necessarily mean, of course, that his supporters are going to follow his decision. So I do think that the possibility of confrontation, of moving from a pre- revolutionary movement to outright revolution, is before us right now. And the first test will be on Saturday in Teheran, as the people decide whether to come into the streets or not, and then whether the Revolutionary Guard decides to deploy their forces and use them.

VAN SUSTEREN: Ahmadinejad says that United States is meddling, that we're involved in it. Are we involved in it?

BOLTON: Well, I wish that it were true, but I don't think that it is. And I think that we've seen what -- how the Iranian authorities view President Obama's attempt to keep hands off. They're going to blame us anyway. They're already blaming other foreign influences, including the United Kingdom. And that will be one of the justifications for the use of force when it comes, that the people in the streets don't reflect the real opinions in Iran, that they're agitators supplied by foreign money, foreign governments, and that that's one of the rationales to crack down.

VAN SUSTEREN: So what would you -- what would you want us do, at this point? I mean, we're sort of -- I mean, we're looking at these incredible tapes, but what would you expect the Obama administration to be doing?

BOLTON: I don't honestly expect the Obama administration to do much of anything, except perhaps change its rhetoric a little bit. My view is this regime is fundamentally illegitimate and that we ought to be trying to help out in some way to bring it down. We should have been doing that for the past 10 years or more. But articulating a policy is one thing. We have to look at our instrumentalities. And I must say, I don't think President Obama himself is willing to carry through on the hard tasks that need to be done. And for that reason, I'm a little reluctant to cheer on the Iranian dissidents, when a lot of blood could flow as a consequence.

VAN SUSTEREN: Ambassador, if you'll stand by, we have much more with you in two minutes.

And at this hour, a Navy destroyer, the U.S. John McCain, is preparing to possibly intercept that North Korean ship. Now, that ship is suspected to be carrying nuclear material. And if we do intercept it, North Korea says it will then be war. Ambassador Bolton on that.

Then: Wait until you see who's going "On the Record." Glenn Beck -- he's all fired up. Why? Well, it has to do with ABC News being given all access to the White House. Is ABC now carrying the water for President Obama? Beck is coming up.

(COMMERCIAL BREAK)

VAN SUSTEREN: The eyes of the world are on this one. A face-to-face confrontation could be near. At this hour, FOX News can confirm that our Navy is preparing for a possible intercept of that North Korean ship, the one believed to be transporting nuclear material. Now, the ship left North Korea on Wednesday, the destination uncertain, but likely needing to refuel, possibly in Singapore. The USS John McCain, a Navy destroyer, is chasing this North Korean ship right now. So what should we do?

Ambassador Bolton is back with us. Ambassador, let me ask you three quick questions. And the first one is, North Korea's not going to let us board it. They're not going to give us permission. So what if our Navy forcibly boards, and what if once boarded, they find nuclear material? That's the second question. And the third one is, what if they forcibly board and they don't find nuclear material?

BOLTON: Well, I think that the question whether we can board in a non-permissive manner is a little bit more complicated than some people think. I think there are grounds that we could board this ship. I think its past practices have indicated it shifts nationality and names sort of at its convenience. And I think there are other reasons that we have in trying to stop trade in illicit nuclear and ballistic missile materials.

There are possibilities, though, as well, if this ship is in Chinese waters, as has been reported, hugging the coastline. Of course, the Chinese have authority in their territorial waters to board it, too, and we should be exploring that.

I think, clearly, that boarding is a risky proposition and we shouldn't be going out of our way to seek that confrontation, but neither should we avoid it at any cost. And I think the North Koreans should worry and feel at risk that the boarding could come.

Now, depending on what we find -- look, I think our experience with the North Koreans is they've probably got a whole bunch of cement bags over the Scuds missiles or nuclear parts. It's going to take some searching. But we need to show to the North Koreans that we have changed our behavior. We're prepared to follow through. We're not going to permit them to engage in trafficking in weapons and materials of mass destruction.

VAN SUSTEREN: But if this is a -- if this is a fraud, I mean, if they're on to us a little bit -- let's suppose that we do board it. It gets out of Chinese waters. We make the decision to board it, even though we don't have permission, and then there's nothing on it -- I mean, I have no idea if something's in it or not, but you know, that certainly is a different dynamic than if we board it and indeed, you know, they are in violation of the U.N. sanctions and are up to their eyeballs in the stuff on that ship.

BOLTON: Well, of course, if there's nothing on the ship that they should be concerned about, it would be to their advantage to let somebody board it, maybe not a U.S. ship. Let a Chinese ship, let a French ship, let some other ship board it, and show to the world that it's just cement bags and not Scud missiles or nuclear weapons components.

So I think that there is -- there's real reason to show to the North Korean we're going to take seriously the things we seriously over and over again about their proliferation activities being unacceptable. That doesn't mean forcing a confrontation. We could trail the ship. We could - - as I say, if it's in Chinese waters, there's a very clear possibility for the Chinese to board it themselves, something we should be exploring.

VAN SUSTEREN: What if on the 4th of July weekend, they do as we've been hearing about, that they're going to fire a missile up in the direction of Hawaii? Is that provocative to us?

BOLTON: Well, it certainly is. And I was at the U.N. three years ago when they fired off a salvo of missiles on the 4th of July. Aiming it toward Hawaii clearly is provocative behavior. We assume this missile has a range that won't permit it actually to reach Hawaii. But you know, this could be a test of a more refined version of the Taepodong that could put us in jeopardy.

This is the kind of behavior, I think, that demonstrates why the North Koreans are putting themselves analogously to pirates and slave traders in days of old, the common enemies of mankind, that gives us authority under customary international law to do such things as board their ships and take other actions. And I think the strong stand now taken by the South Korean government should bolster our resolve that we're going to -- we're going to take any provocative missile launch very seriously.

VAN SUSTEREN: Ambassador, thank you, sir.

BOLTON: Thank you.



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