This is a rush transcript from "On the Record," December 17, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Disturbing news tonight out of Pakistan. According to The New York Times, American officials in Pakistan say they're being harassed by parts of the Pakistani military and intelligence services. The harassment includes the refusal to extend or approve visas for more than 100,000 American officials and frequent searches of American diplomatic vehicles in major cities.

Why is this going on? We send Pakistan huge amounts of aid, and we need them to fight al Qaeda and the Taliban. So what do we do now? Joining us live is former U.S. ambassador to the United Nations John Bolton.

Good evening, Ambassador. Welcome back. And before we even get to this issue, the news in the last 24 hours about the Pakistani supreme court essentially saying that the grant of immunity or amnesty to the president - - the current president of Pakistan and others was unconstitutional -- is it likely that the president, President Zardari, will be tried for corruption? And how will that destabilize an already unstable government?

JOHN BOLTON, FORMER U.S. AMBASSADOR TO THE U.N.: Well, his immunity holds as long as he's in office. It's when people become former office holders or who are on this list, including, for example, the defense minister of Pakistan, who are subject to being tried right now.

I actually think the two events, the supreme court decision stripping immunity and this evidence of anti-Americanism in parts of the Pakistani military, are tied together. And I think what they both signify is a continuing weakening of Zardari's position, which is bad news for us and bad news for the continuing fight against terrorism.

VAN SUSTEREN: You mentioned the defense minister. Defense Minister Muqtar claims that local television in Pakistan that he was on his way to China, actually at the airport in Islamabad to go to China, and that he was not allowed to board a Pakistani air flight to go to China because of this decision.

They won't even allow him to leave the country. That doesn't sound particularly good.

BOLTON: No. And I think what's going on here is the continuing instability that, in effect, the U.S. helped bring on by pushing former President Musharraf out of power a couple of years ago, trying to force Pakistan into elections.

I think the U.S. focus going forward has to be to continue to press the Pakistani military to take the fight against the Taliban and Al Qaeda forward, and also to try and influence -- and this is difficult, I acknowledge -- but to try and influence personnel and personnel decisions within the Pakistani military to favor a pro-American, anti-radical Islamist line.

We've allowed a lot of time to go by without enough education of Pakistani officers in the United States, and I think you can see at the lower levels and some at the higher levels are decidedly anti-American. I think that's what this harassment and denial of visas in part is all about.

VAN SUSTEREN: Well, we were there just a short time ago, and what was stunning, just after the United States announced $7.5 billion in aid to this country and the newspapers and the country and everyone was complaining, saying horrible things about the United States, saying that we had tied strings to their money.

The level of hostility -- and I haven't been in every country in the world -- but you could almost feel the hostility against an American in a city that was one of their safest cities. So it's astounding how hostile we witnessed this country, many are against the United States.

BOLTON: And let's not forget, the United States has supported Pakistan over many years during the cold war and in tilting more toward Pakistan and against India in many conflicts.

So this anti-Americanism is a consequence, it's an evidence of the growth of radical Islamism, the funding of radical madrassas over a large number of years.

We are really in a race against time inside Pakistan. Our ability to influence events is not great. But we've got to continue to do it to make sure that the government is not further destabilized, fall into the hands of radical Islamists, and see that large arsenal of nuclear weapons potentially deliverable to terrorists around the world.

VAN SUSTEREN: But it's almost as though we're caught between a rock and a hard place in Pakistan, because they seem so ungrateful about this $7.5 billion. So the tendency -- at least my first thought is we won't give it to you, we'll take it back. But if we do that, then a government that is very unstable is going to fail and it's going to go to the Islamist extremists.

Meanwhile, India next door is saying, you give $7.5 billion to them and they're breeding terrorists. You don't give it us, and we're not doing it, and they hate Pakistan. Sort that out for me.

BOLTON: I think actually one of the accomplishments the Bush administration doesn't get a lot of credit for -- and I think Secretary Powell deserves a lot of the credit that should be due -- is we now have better relations with Pakistan and India combined.

I think that at any point since the two countries became independent from Britain, before it's been a zero-sum game, down with India and up with Pakistan. We're doing better with both.

The fact is, when it comes to Pakistan, you've got to grit your teeth, you've got to keep your eye on our national security objective, which is making sure that country's nuclear weapons don't fall into the hands of Pakistani Taliban and Al Qaeda, and you've got to play a long and determined game to move the military and civil society, too, away from Islamism and toward a recognition that they've got a place in the broader world.

That's not easy. It's the source of enormous frustration. But, again, it's something we just have to have determination to continue. We've been hot and cold with Pakistan over the years. We've got to bear down now, because we are right at the cusp of this issue. We could lose Pakistan in a relatively short period of time.

And that's just not one more country that radicals will take over, it's a country with a substantial stock of nuclear weapons that can come back to bite us all over the world.

VAN SUSTEREN: Ambassador, thank you, sir.

BOLTON: Thank you.

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