This is a RUSH transcript from "The O'Reilly Factor," September 28, 2009. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: Now for the top story tonight. Let's bring in Sen. John McCain for his take on Iran and Afghanistan. The senator joins us from Washington.

We're pleased to have you, Senator, because you could be president of the United States right now. You could be facing exactly what President Obama is facing. So let's take Iran first. Am I making any mistakes in my analysis, sir?

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SEN. JOHN MCCAIN, R-ARIZ.: No, not at all. This is a very serious situation, and the solution, I think, not only lies with an attempt to impose sanctions on Iran. As you, I think, appropriately and accurately pointed out, I have very serious doubts as to whether Russia and China will be able to cooperate with sanctions that have significant effect on Iran and we can talk about why. But I think you left out something, and that is our advocacy for regime change in Iran. And I don't mean through military action by helping, supporting, assisting in a variety of ways, including Internet access and other — encouragement of elements within Iran to overthrow the regime.

O'REILLY: Well we've got to assume that it's happening. We have to assume that the intelligence services of the United States are doing everything they can. But you are in a race against time now. I mean, if you don't get the sanctions to strangle the gasoline flow, because that's all — that could bring it to a halt. That brings Iran down. If you don't get them, then Israel is going to do something. Israel is not going to sit there and do nothing. They are going to do something. So we are talking months here. And you know, those Revolutionary Guard guys, they are pretty tough guys. It's going to be pretty tough to overflow that government with them standing between them and the mullahs, between the good people in Iran and the mullahs. So you've got to assume that President Obama has to have a plan B. Sanctions don't work. Israel is coming. What does President Obama do? What would you do?

MCCAIN: Well, first of all, again, I would have, from the beginning, and you disagreed with me at the time. I would have said these people that are rising up against this oppression and brutality, they have our full support and the day that that young woman named Neda bled to death before hundreds of millions of people all over the word, that was the beginning of the end of that regime. That would have removed many of the problems that we have. There are a lot more things we can do besides just the intelligence agencies. There is legislation that we can help them out.

O'REILLY: I got it. Give me one big thing that John McCain would have done during that turmoil.

MCCAIN: Well first of all, I would have said you are right. We are with you. The world is behind you. We have respect and appreciation for human rights. And I would have done everything I could to assist them outside of, obviously military action. But, and again, your point though is what the situation we're in. There's no good options, Bill. We can't take military option off the table. Yet, you know the ramifications. I think you just described it very accurately in your "Talking Points." So, I think we have to try the sanctions, but, the talking that's going to take place on the first of October. I'm not optimistic, obviously, as you mentioned. The missile testing that's taking place in the last few days. But I also think we have to sit down and talk turkey to the Russians and the Chinese and try to make them understand that if there is conflict in the Middle East, it's not in Russia or China's national security interest either in the long run.

O'REILLY: But again, you've got to assume that Hillary Clinton has been doing that and the regime is doing it. All right look, you are navy guy. I call for a possible blockade of Iran if everything collapses. I think that would stop Israel from doing anything. Put some ships in there and say enough is enough, we're blockading you. We did it with Cuba back in the Kennedy regime. Would you support that?

MCCAIN: I think that that is an option that must be seriously considered and I think it would have a serious effect. I would remind you that Hezbollah and southern Lebanon has thousands of rockets that they can unleash on Israel.

O'REILLY: I know.

MCCAIN: It's hard to tell. If the Iranians block the Straits of Hormuz, it cuts off the world's oil supply as well. So we have got to think it through. But it's an option, frankly, that again, I certainly wouldn't take it off the table.

O'REILLY: Let's go to Afghanistan now. Deteriorating situation according to Gen. McChrystal. You just heard the general say he doesn't talk to President Obama. I thought that was a little strange. Now the Pentagon, Gates say look, that's the way we want it. What do you think?

MCCAIN: I think it's vitally important that every president that I know of has talked directly to the generals. Of course you observe the chain of command. But here is the person who has the direct responsibility, Gen. McChrystal, in this case, of some 60,000 some thousand young Americans. And I just out of idle curiosity, I would talk to him.

O'REILLY: I was taken aback by that.

MCCAIN: I was stunned by it.

O'REILLY: Now, you would put the 40,000 in, right? You would put the 40,000 in?

MCCAIN: If we don't, then we are facing disaster as General McChrystal has adequately described. And we can't do half measures. Time is not on our side as Admiral Mullen, the chairman of the Joint Chiefs of Staff testified. And we need to act very soon. And I understand the president's dilemma and I sympathize with the fact that it's the left base of his party and a lot of other factors politically and otherwise that he has to consider. But I would absolutely agree with that. And those who are opposing it are the same people that said the surge wouldn't work.

O'REILLY: Yes, the surge wouldn't work in Iraq. Right, I got that. All right, I'm going to hold the senator over for another couple of minutes and we'll just back time it all down in the show so that you all know. All right, now look, here is my problem with Afghanistan. You have a corrupt government in there. Karzai is ineffective. We've had eight years in there, senator. We haven't been able to train their army or their police force at all. Eight years, OK? So Americans on both sides of the aisle, liberal, conservative, independent, libertarian, whatever, they're going, maybe it's possible. You have been there. I have been there. It's a primitive country. Life expectancy is 40. Most people don't have electricity. Most people are illiterate, all right? We are trying to nation build in there. It looks like its impossible. So to me, it looks like we're going to have a staunch police action and that's about the best we can do. But maybe you have another plan.

MCCAIN: I have the same plan that we used in Iraq. We're only adopted to the different demographics, geography, etc. We provide security for the people and then the social and economic process move forward. We had a government in Iraq when we started the surge that had no control over the country. It was driven by terrible sectarian violence. I have great faith in Gen. Petraeus and Gen. McChrystal who tell me we can do it, but first you have to provide security for the people, exactly.

O'REILLY: All right, I think most Americans are willing to give that a try. But if it doesn't work, what are you going to do?

MCCAIN: They're very weary.

O'REILLY: Yes.

MCCAIN: Bill, they are very weary.

O'REILLY: Absolutely.

MCCAIN: You know they are.

O'REILLY: Right.

MCCAIN: But we have I think really only have two choices. You do the right thing or you get out.

O'REILLY: Well, you've got to give it a try. Just like in Iraq. You were right on Iraq and most others were wrong. The senator was right on Iraq, on the surge. We've got to give it one more try, one more good try and see how it comes down. And I also want to say and I know you have said this before, that the American military is performing magnificently once again. Once again not only did they perform magnificently in Iraq, but this is harder. This is harder. They're in a primitive country with people who have no idea about decorum or anything like that and the American military is performing — can't even use air power now in a lot of situations. But it just is stunning to me how good our military is. I will give you the last word, senator.

MCCAIN: I agree with everything you said in space. I would also point out the Afghans are good fighters, too. And they love a good fight.

O'REILLY: We've got to get them mobilized then. It's been eight years.

MCCAIN: Train them up. We've got to operate with them. Operate with them. I thank you for having me on.

O'REILLY: All right. Senator, it's always a pleasure. Thanks for coming on.

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