This is a rush transcript from "On the Record," February 11, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Ahmadinejad announced that Iran is a nuclear state, and that was just a few hours ago, that announcement, and it was made to a giant pro-government crowd in Tehran marking the 31st anniversary of the Islamic Revolution.

On your screen you are looking at pictures the Iranian government wants you to see of people supporting the government. What the government does not want you to see is video like this of anti-government protesters clashing with police.

As always the hard-line Iranian regime is cracking down, trying to control all information coming out of their country. Joining us on the phone is former Secretary of State Lawrence Eagleburger.

Mr. Secretary, looking at the protests today, what are your thoughts? Is it significant or not? Are there enough people out there that could make a difference?

LAWRENCE EAGLEBURGER, FORMER SECRETARY OF STATE, (Via Telephone): I think there are enough people out there to make a different. The issue will be how hard the government cracks down. But under any circumstances at all, it seems there's enough there that at least the government has to be a little nervous about their unpinning.

So I think it has to give them if nothing else, at least give them pause. But the issue is not on the nuclear stuff, it is on the general living conditions in Iran and so forth. And the question is going to be how much these people are willing to go into the streets to make those changes.

VAN SUSTEREN: You talk about living conditions, and that of course raises the issue of sanctions. If we were to crank up sanctions so the living conditions got worse, does that turn the protesters against us for imposing the sanctions, or does that turn the protesters more against the government for provoking the sanctions?

EAGLEBURGER: When you have an answer to that, would you let me know? The answer as far as I can tell, Greta, is that it cuts both ways. I think, probably more than anything else, it would weaken the regime more.

But, there's no question as well that the regime would be arguing the reason for the conditions was because of the sanctions, beyond which -- I'm not sure how much -- how many more sanctions -- how much more we are going to be able to impose given the strength of our wonderful allies and friends and their unwillingness to get much tougher.

And then beyond that the fact that the Chinese have made it clear they are not prepared to play in that game. So I'm not sure how much tougher we can get.

VAN SUSTEREN: You mentioned the Chinese. And the Chinese are sort of the weak link in that they have been unwilling to, at least thus far, to get onboard about the sanctions. The Chinese are also distressed at the United States over arm sales to Taiwan.

So we really are in a little bind in trying to get them to get onboard with Iran, are we not?

EAGLEBURGER: I think it would be very unlikely we can get the Chinese onboard. Although this business of sale of arms to Taiwan is nonsense in the sense that they have been griping about that for at least a decade, and they've knocked it off until recently.

I think there's no question there is a definite deterioration in our relations with China, but here again it is for reasons other than arms sales to Taiwan.

VAN SUSTEREN: Why are they using that, why are the Chinese using that? If that's something we've been doing for a long time, and even Secretary Gates told us over the weekend this arms sale is a nothing thing, but the Chinese keep raising this and saying this is one of the reasons they are mad at us right now?

EAGLEBURGER: They haven't been raising it for a while, and now they are raising it again. And they are raising it, obviously, because their relationship with us has deteriorated. But I do not think it is itself one of the reasons for the deterioration, but it is there for them to drag out of the garbage can again and use against us.

But it is not the reason -- one of the many reasons for their difficulties with us right now. There's an awful lot going on in the way of trade relations, problems there.

And also, let's face it, I think the Chinese take a look at how much money we owe them and that has made them a little nervous too because they are not sure whether it will get repaid in time. So I think there's some real problems with the Chinese, but I don't think it is because of the arms sales.

VAN SUSTEREN: Secretary Eagleburger, thank you, sir.

EAGLEBURGER: My pleasure.

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