Updated

This is a rush transcript from "On the Record," December 16, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Well, there's news tonight about North Korea. The White House confirms that President Obama sent a personal letter to North Korean leader Kim Jong Il. The letter was hand-delivered by our special envoy to North Korea. The White House won't tell us what the president said in his letter.

Meanwhile, there is also news tonight out of Iran. You remember that on Monday, Secretary of State Hillary Clinton said the new administration's engagement with Iran has not been productive. Last night, right here, Ambassador Bolton told you about the ominous signs he sees coming out of Iran. And then, more bad news broke. The Pentagon confirms that Iran has test fired a missile, one that can reach Europe, Israel and many U.S. bases in the region. Iranian state television ran a brief clip of what it says is the launch.

Joining us is former U.S. ambassador to the United States -- the United Nations John Bolton. I keep saying United States -- United Nations. Nice to see you back, Ambassador. Since we last spoke last night, that news isn't good that they have now test fired this missile.

JOHN BOLTON, FORMER U.S. AMBASSADOR TO THE UNITED NATIONS: Right. Well, the Defense Department is downplaying the launch, saying, We've seen it before. But this was clearly a very successful launch, and that's why you have testing of ballistic missiles, to increase your range, increase your accuracy, and continue to improve the performance of the missile, which the Iranians seem to have accomplished.

What was very interesting was the White House announcement today, saying, You know, this launch undercuts the claims that Iran makes that its nuclear program is peaceful. It was, I thought, a very interesting contrast to the very direct remark that Secretary Clinton made just a few hours before, in effect, and opens the question whether many people in the White House are still hoping against hope that they can negotiate with Iran.

VAN SUSTEREN: Well, it almost looks to me -- and I hate to be so grim about this -- but that it's a done deal on nuclear weapons for Iran for the simple reason that the country that is most interested in getting rid of those nuclear weapons capability is Israel. And now with this test today or test yesterday, is that if Israel attempts to take out those nuclear facilities, that Iran says that they will use these new missiles and go right back at Israel, and that just starts it -- I mean, I -- I don't even need to -- I mean, you (INAUDIBLE) imagination of what's going to happen at that point.

BOLTON: Well, but I think from the perspective of Israel looking at this test, if you don't like Iran having a ballistic missile capability that can deliver conventional weapons on targets in Israel, imagine how much worse is to have an Iran with nuclear weapons.

So I think this sharpens the decision point for the Israelis. I think it emphasizes that if they are going to use force against the Iran's nuclear program, the window of time that they have to do that is decreasing dramatically. So I think if Israel is going to use force, it's going to have to be sooner rather than later.

VAN SUSTEREN: All right, if nothing is done, then is -- it seems pretty plain Iran will have nuclear weapons, if nothing is done. If something is done -- and I mean, I guess we can increase sanctions. That's something else we could continue to try to do. But if something is done from military standpoint by Israel, that means that that engages everybody in the region, or certainly Iran. What do you foresee as sort of the likely -- how is this going to play out, in your mind?

BOLTON: I think the most likely outcome is that Iran gets nuclear weapons. I think that's the direction we've been pointed in not just in the Obama administration but in the Bush administration. These negotiations, which have now lasted close to seven years, have done nothing except given Iran seven more years to develop its weapons. And I think that is where we're going to end up.

And I think what's becoming more clear from the Obama administration is that people in the White House, people in the State Department are more and more reconciled to Iran having nuclear weapons. They don't like that, but they don't think it'll be the end of the world. They think Iran can be contained and deterred from using the weapons, as we contained and deterred the Soviet Union.

I happen to think that calculation is badly wrong, among other reasons because it doesn't stop with Iran. Saudi Arabia, Egypt, Turkey, others will get nuclear weapons if they see Iran with that capability. But I think underlying a lot of this is the view in the administration that we can live with an Iran with nuclear weapons. As I say, I think that's a mistake, but I think that's really where they're coming out, maybe not Secretary of State Clinton, but I think that's where the weight of opinion seems to be going, and that's bad news.

VAN SUSTEREN: All right, we -- we've -- the options on the table are do nothing, up the sanctions, military actions. But how about this. Is there any way we can buy them off? What do they want?

BOLTON: Well, I think they want dominance in the region. They want dominance inside Islam. And they want to be a global player. And I don't think an Iran with nuclear weapons is anything we want with any of those capabilities.

I think the question of an Israeli use of force is now the only thing that stands between Iran and nuclear weapons, and I think we're going to know the answer to whether Israel's going to use force within a fairly short period of time because if they don't act soon, and the Russians deliver these sophisticated air defenses that Iran has already bought and paid for, then the possibility, even the possibility of an Israeli attack is gone.

VAN SUSTEREN: All right, let me go -- you know, let me get really alarmist for a second. Ahmadinejad, president of Iran, has recently been greeted very gleefully in Brazil by the president of Brazil. Then he traveled up to Venezuela. Chavez is his big friend up there. I mean, is - - I mean, should -- shouldn't we have sort of a long view, like, how are we going to handle these other countries so close to home, to make sure that, you know, they aren't attracted to anything Iran's doing?

BOLTON: Well, I'll just underline the reason to be alarmist. If the rest of the world sees that North Korea can keep its nuclear weapons, they see that Iran is capable of defying United States and getting nuclear weapons, they see Hugo Chavez still completely unplugged and growing closer and closer to Mahmoud Ahmadinejad's Iran -- let's not forget Venezuela has its own uranium deposits -- then the lesson, I think, for would-be proliferators around the world is clear. You can get nuclear weapons, and the United States and others will not act to stop you.

And if those constraints don't have any force, then I think we're going to see a lot more countries with nuclear weapons, and I think that raises the risk of global instability by an enormous factor.

VAN SUSTEREN: Ambassador, thank you, sir.

BOLTON: Thank you.

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