Updated

This is a rush transcript from "Hannity & Colmes," December 10, 2007. This copy may not be in its final form and may be updated.

ALAN COLMES, CO-HOST: Just 23 days before the Iowa caucuses on January 3rd, and it's anybody's guess who the winners will be. Earlier today, Sean spoke in an exclusive interview with the Architect Karl Rove about all the candidates running for president and how the next month will shake out.

(BEGIN VIDEOTAPE)

SEAN HANNITY, FOX NEWS ANCHOR: Here we are, 23 days before Iowa...

KARL ROVE, FORMER DEPUTY CHIEF OF STAFF TO PRESIDENT GEORGE W. BUSH: Isn't it amazing? We are in December and it is — we are planning on the third of January to have Iowa. How sad is that? There are going to be drunks in Des Moines still getting off their News Years hangover. They're going to be going to the caucuses.

HANNITY: Still wide open in both the Republican primary, the Democratic primary.

ROVE: Right.

HANNITY: Give me your broad overview, and then I will ask you some specific questions.

ROVE: Well, you are right, it is wide open. Not too many people know much about these candidates except in Iowa and New Hampshire, where the calendar — because the calendar starts so early and is so compressed, people are spending a lot of time in those two states.

And, really, people in the rest of the country don't know as much about these candidates as the people in those two states do, which is sort of sad. I mean, it's — I'm not certain it is good and healthy for the country to have this process start so early and happen so quickly.

HANNITY: Traditionally, it would be, we go to Iowa, then we go to New Hampshire. You have a break in between. Then you go to South Carolina. And this thing would wind down in California some time in June. This whole thing now has been compressed.

Is it possible — if we look at the front-runners, for example, would it be possible for Rudy Giuliani and Hillary Clinton to lose Iowa, New Hampshire, maybe South Carolina, and yet still come back and win the — win the primary and the nomination?

ROVE: It could, as long as the early contests are all bunched up, so there is not really much difference between first, second, and third. Yes, that could be.

HANNITY: Right.

ROVE: You are right, though, it is going to happen very quickly. Think about this, in 2000, I think it was the 24th of January was Iowa. Eight days later was New Hampshire; 19 days later was South Carolina, four days later was Michigan, and seven days later were Virginia, North Dakota, and Washington State. Seven contests in one month.

There will be 28 contests in the first month of this thing.

HANNITY: So pretty dramatic. But there seems to be emerging strategies and different strategies. For example, Mitt Romney, I think, put a lot of his time, money, energy, resources in the early states. Rudy Giuliani seemed to look to Florida first and then hoping to get to February 5th, this big Super Tuesday.

ROVE: Right. I think that is a good summary of it. I do think it has changed over time. I think Romney has tended to elongate his organizational efforts, that is to say, move into states that are further along on the time frame.

And similarly, Rudy has inched forward a little bit, not in Iowa, but I think in New Hampshire, inched forward a little bit by trying to organize a little bit more in-depth there and spend a little bit more time there.

HANNITY: All right. Let's start with the Democrats. I really found fascinating you wrote in The Financial Times a memo from Karl Rove to Barack Obama. And the headline was "Win Iowa or Lose the Race."

You said: "Iowa is your best chance to best her, if you don't do it there, odds are you will never do it anywhere."

ROVE: Right.

HANNITY: He is now leading in Iowa.

ROVE: Right, right. Yes — no, he needs to beat her in Iowa so that - - I mean, her entire candidacy is based upon inevitability. She is the person who deserves to have it. It is sort of ironic, that is the argument we used to have in the Republican ranks. I'm the guy who deserves it because I have waited long enough to get the nomination.

And if you make the cause — the case inevitability, and you then get beat in one of these early states, then things get really raucous down the way. So he has got to beat her in Iowa. If he doesn't, she will win — if she wins Iowa and New Hampshire, then she is likely to win South Carolina and he is likely to be out of it.

HANNITY: You gave him specific things that you suggest that he follow. Among which — first of all, you talked about the fact that Hillary is making "unforced errors."

ROVE: Right.

HANNITY: So she is providing him an opportunity here.

ROVE: Right. Well, but he doesn't take advantage of them. As I said in the article, my first piece of advice would stop being a "vitamin-deficient Adlai Stevenson."

HANNITY: Adlai Stevenson, right.

ROVE: I mean, the guy — she gives him these openings and he just — he can't take her on effectively. He has in the last couple of weeks started to. And I think that is part of his rise. But he has missed some big ones.

Philadelphia, as I cite in the article, is the biggest example. She gets asked by Russert about the secret documents that she and President Clinton have attempted to hide at the library, and she gives a mealy-mouthed response.

He speaks next — Obama speaks next, and he can't bring himself to turn to her and say, Senator Clinton, with all due respect, you and your husband could make those documents available tomorrow if you wanted to, and your failure to do so raises some real doubts in people's minds as to what you are hiding. And those doubts will cause our party problems if you are our nominee in the fall. So please, for the sake of our party, sake of our country, change course.

HANNITY: But you added one other part of that, too. And that is that he should have turned to her and looked at her directly.

ROVE: Right.

HANNITY: And said it, not in a confrontational way, but in a forceful way.

ROVE: Right, right.

HANNITY: The words you used at one point were that he needs to sharpen his attack and make those attacks more precise against her.

ROVE: Right. That night he was vague and indecisive and indistinct with his response to her. And he literally couldn't bring himself to look at her. I mean, he — you know, you don't want to make the mistake that was made in the campaign against her for the United States Senate, where Rick Lazio walked into her space, much like Al Gore had walked into George W. Bush's space in the second debate.

But on the other hand, he does need to treat her with dignity, treat her with respect, but confront her head-on and blow the whistle on her.

HANNITY: You also said that focus on the fact that many Democrats have doubts about Hillary — and they do. And at another point during this campaign, you refer to her as a "fatally flawed" candidate.

ROVE: Right, yes. Well, look, I think the American people know her. And her negatives this year have ranged between 44 and 52. I have not been able to find in an open race for the presidency anybody in the Gallup poll who had negatives close to hers — in an open race for the presidency.

The closest you can come is 2000, where Al Gore at one point peaks out at 31 percent negatives in the year leading up to the election. So people know her and he knows better — he, Senator Obama, knows better than most what their concerns are. He is hearing them when he goes to the fundraiser in Hollywood and when he goes to the — you know, wherever he is, he is hearing the criticisms and concerns the Democrats privately have about her.

He can make a critique of her in a very respectful, but nonetheless powerful way. And he has thus far largely failed to do it. Again, the last couple of weeks, he is doing better at it. He is trying to say, we don't want to go back to the way the politics was in the '90s. We want Democrats and Republicans working together for the best interests of the country, not engaged in the kind of warfare we routinely saw during the Clinton years.

I think it is effective. And I think it plays — and it is effective because it plays on her weakness.

HANNITY: After reading this memo, do you think Barack Obama can beat her in the primary?

ROVE: I think he could. I doubt that he will. I think she is tough. I think she is surrounded by a very seasoned crew. They would — they recognize that there are ups and down in a campaign. It will be interesting to see how she handles Iowa if she does lose, as I expect she will. You learn more about a candidate when they lose in a contest like that than when they win a contest like that.

(END VIDEOTAPE)

HANNITY: All right, much more with Karl Rove coming up. So what does the Architect think about the Bill Clinton factor? We're going to ask him that. Plus, he also explains what the Republicans need to do if they want to beat Hillary.

(COMMERCIAL BREAK)

HANNITY: And we continue now with my exclusive interview with Karl Rove.

(BEGIN VIDEOTAPE)

HANNITY: Let's talk about the Bill factor in all of this. There have been polls that show — is he a net positive/net negative, minus eight. He is a negative for her. And that was prior to him saying, I was against this war from the beginning, when in fact just the opposite we found out to be true.

ROVE: Yes. I think also, incidentally, this is one of these things that is very difficult to poll. So I was a little taken aback that the poll came out negative for him, because, look, you know, he is an engaging guy.

The American people have a — you know, a good relationship with him. You know, he is entertaining. He is fun. He is charming. He is — you know, we look back on him with a little certain rascally fondness.

But, nonetheless, he is a — I think a big negative because how can you claim — every presidential election is an election about change. It is about the future. How can you claim to be oriented to the future if your principal message is, let's go back to the way it was when Bill and I were in the White House together. I mean, that is not change. That is regression, not progression.

HANNITY: All right. So you believe if she inevitably wins this nomination, then the question becomes for the Republicans, how do they defeat her? And I have my own thoughts on it. For example, I think if they go too negative, I think it creates a backlash.

ROVE: I think you are absolutely right.

HANNITY: I think if they focus on — I call them the "Hannity six": cutting taxes; staying on offense in the war on terror; winning in Iraq; energy independence; free market solutions to healthcare; and point out the distinct differences that they have.

ROVE: Right. I think that is largely right. I think that there — I think she wants a campaign in which the Republican nominee, selected plus or minus February 5th or 6th, comes roaring out with a negative attack on her. She wants that because she knows that the only way that she could win in a general election against a Republican candidate is if it gets down and ugly. So she wants that candidate to come hard.

I think — I put this in a piece in Newsweek. I think it is absolutely important that our nominee, once he is selected, come out and describe the narrative of their life to the American people. We should not confuse this primary process with an education process in which every American participates where they are not going to know that much about them.

So it is really important that our nominee come out and say, here is who I am. Here is what my life has been about. Here is what motivates me in public service. Here is what I have been able to achieve. Here is how you get to know me.

And then they have got to talk about their positive and optimistic vision for the future. And I think you are absolutely right, on issues like health care, it is going to be important for the Republicans to be able to talk in a way that people sitting around their kitchen table, worried about their health insurance premiums, or whether or not they, you know, are stuck in job because they can't take their healthcare with them, you know, say, hey, that makes sense to me. That guy is talking sense.

HANNITY: Mark Penn suggests and believes that his internal polling is showing — that is Hillary's pollster, Mark Penn — that, in fact, 25 percent of Republican women will vote for Hillary because of the, quote, "emotional connection that they will have with her as a woman." Possible?

ROVE: I think there will be some women, Republican, Democrat, and Independent, for whom the fact that she is a women candidate is the vote decision. That is the thing on which their vote factors.

But I think it would be a terrible mistake for the Clinton campaign — I hope they continue to believe that conversation that they laid out, because I — look, at the end of the day, America has gotten to the point where we are looking, saying, this person, man or woman, are they up to the job? Do they have the values? Do they have the kind of personality and character that I'm looking for? Am I comfortable with them being, you know, the leader of the free world for the next four years?

And I think, at the end of the day, that is why her negatives are so high. People have real fundamental doubts about her.

HANNITY: All right. I read this memo to Barack Obama. If Karl Rove were to write a memo to Hillary Clinton at this stage, 23 days outside of Iowa, on what she needs to do to not only win the nomination, but to win the presidency, what would you advise her?

ROVE: Well, first, you have got to win the nomination. So, on the nomination, she has got to find a way to sharply contrast herself with Obama. What are her strengths that are naturally his weaknesses? What are the things that she is capable and able to do that he is not able to compete with her on? And she ought to make those the focal point of her campaign between now and the primary and the caucus.

What she has done heretofore is to say, I'm inevitable. I'm the person who deserves it. I'm the person that the Republicans fear. You know, I'm the person that the party, you know, has to nominate because I deserve it. She has not given people a clear narrative as to what it is that she would do as president, particularly in those early primary states. It has been inevitability.

So, you know, she has got to retool her message, just as Obama, in order to win, would have to — has been retooling his.

HANNITY: All right. Before we get to the electoral map, which I think is going to be pretty interesting to watch this year here, let's talk a little bit about the Republican candidates that are running. You have got the big, what we are calling, I guess, the Hucka-boom factor.

Mike Huckabee has come out of nowhere. We have one poll, he is up now in Iowa by 20 points. But on top of that, as the — now that he is a front-runner, he is getting the added scrutiny that front runners get on immigration, on taxes and on the issue of parole and clemency here.

Is there a chance, do you think, Mike Huckabee could run away with this?

ROVE: Well, I think he stands a good chance of running well in Iowa. I'm not certain that he is organized in-depth beyond that. We will see, I mean, whether the...

HANNITY: Polls show numbers going up in states like Florida, South Carolina, even New Hampshire he is coming around in —

ROVE: Right. Well, he is still way down in the pack.

HANNITY: He is trailing in New Hampshire.

ROVE: And look, again, you know, these national polls — the state polls matter. And in Iowa he has spent a lot of time and he has got some people, particularly in western Iowa, who are aboard. There is a social conservative, church-going group of people in western Iowa who attend the caucuses, who are fertile ground for Mike Huckabee. The question is, can he take that and go onto New Hampshire and then on to South Carolina? And that is a real question. We will see.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

COLMES: We now continue with Sean's exclusive interview to former senior adviser to President Bush, Karl Rove.

(BEGIN VIDEOTAPE)

HANNITY: Let's talk a little bit about Rudy Giuliani. He still remains the leader in the polls, behind in Iowa. He seems to be moving up a little bit now in New Hampshire. But he is behind there. It is a tight race for everybody in South Carolina. But he is really leading in states like Florida, California, New Jersey, New York, and Connecticut. February 5th should be a good date for him if those polls hold.

ROVE: Right. The real question that he faces is — he has made a strategic judgment that he can run well in one or two of the earlier states, not Iowa, but maybe New Hampshire, maybe South Carolina, not necessarily win, but protect himself so that by the fifth, when he gets these good states that he feels are a natural base for him. And what he is betting on is that there is no bandwagon effect that develops with one candidate doing consistently well in the early primary states, so they go into the fifth with a, you know, sort of natural momentum, and people saying, well, you know, so-and-so is looking like they are winning these races, why don't we go with him.

And it is a big strategic bet. And...

HANNITY: What do you do think, based on the new configuration, would you have advised him to follow that strategy?

ROVE: You know, look, this — there are two different ways of looking at this. One says, focus on the early states because that is going to establish momentum. And the other one says, this is happening in such a short period of time that I can withstand losses in states that people don't expect me to win, and I can win by winning bigger states that are voting just momentarily later.

This is a big strategic bet that several candidates have found themselves on different sides of. We will see how it works out. We are going to know quick enough.

HANNITY: Do you lean towards one strategy over the other? Or you don't want to say?

ROVE: I don't want to say. I —

HANNITY: You do, though.

ROVE: But it is interesting to see that everybody has made their strategic bets. I'm not certain, incidentally, that this is helpful for the country, for this to be settled so quickly. I mean, people do need the time — this process ought to be spread out over time, in my opinion, because it allows more people to participate, more people in the country to develop a deeper understanding of who the candidates are, and for the people of America to make a more considered judgment.

This thing is happening so quick on so many different battle fronts that I'm not certain, regardless of who makes the — who bet on the right strategy, there is going to be a bandwagon effect, no, national reputation is going to count — no matter which way that works out, I'm not certain it is necessarily in the best interest of the country.

HANNITY: Let's talk about Governor Romney. Up until recently, was significantly in the lead in Iowa. He is doing well in New Hampshire. He is still leading there. Michigan is a state he is doing well in. He is competing in South Carolina. Those are the early states.

His strategy is what we were talking about, gain early momentum, take them to Florida, then Super Tuesday.

ROVE: Right.

HANNITY: Does it work?

ROVE: Well, again, I don't know. I mean, that is one of the interesting things for prognosticators.

HANNITY: But what do you think of the way he is running the campaign, then?

ROVE: I think he has run a very disciplined campaign. In fact, what is amazing is that we have had several campaigns on the Republican side that have exceeded expectations. Romney has been disciplined, well-organized. Rudy has been at a place in the polls that I don't think most observers, even his friends and advocates, would have thought he would have been a year ago. McCain, after this terrible start, the campaign blowing up — you know, it is like the only kind of campaign that McCain could win is the kind of campaign that he is being forced to fight now, which is a guerrilla war.

Burn — you know, he didn't want to. But all of his bases were burned. The supply lines were destroyed. The supplies were burned up. And he's out there fighting a guerrilla war, and it's made him, you know, sort of free and loose and out in the open.

HANNITY: What did you think about Romney's speech on religion that he gave last week?

(BEGIN VIDEOTAPE)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: No candidate should become the spokesman for his faith, for if he becomes president, he will need the prayers of the people of all faiths.

(END VIDEOTAPE)

HANNITY: Do you think that's a factor, a negative factor for him in this race?

ROVE: Look, I do think there are a small group of people who will not vote for a Mormon under any circumstance. I spent part of my youth in Utah, and I was a non-Mormon in a heavily Mormon community. And I have great respect for the Mormon people as a result. And I recognize that there are a small group. I think it's very small, though.

I think it was a very good speech. I thought it was powerfully delivered. It was something he clearly paid a lot of attention to. He wrote it himself, they say. And I accept that. It was, I thought, well done. And it was an important statement, not just about the journey of a Mormon towards the presidency, but, more importantly, the views of a guy who could be president of the United States about the role of faith in the public square. And I thought it was a very powerful statement.

HANNITY: What do you think about the Fred Thompson campaign? His best state now in the polls looks like it's South Carolina. A lot of people have been critical of his style. I've known Fred — Senator Thompson a long time. That's — that's — what you see is what you get. I mean, that's always been him. And to his credit, he hasn't — he's resisted the temptation to become somebody he's not.

ROVE: Well, and look, he wants — you know, he wants — you know, he wants the job, and he wants the job — to win the job in a way that he's comfortable with. And the way that he has campaigned and the way that he's constructed his campaign is who he is. You're right.

And authenticity matters in this game. I think it's why, in places like South Carolina, where people have been able to the measure of him, he's hung in in the polls. But again, he's — he's on one of the sort of two camps that we've got. He's the one saying, "I think I can weather Iowa. I can weather New Hampshire with being back in the pack. And I can start to come to the fore in South Carolina." And again, it's a big bet, and we'll see.

HANNITY: Can he come back?

ROVE: Well, look, you know, that's the amazing thing about this election year. Nothing is foreordained. We are — we have the longest presidential campaign in history. These candidates began running in November.

HANNITY: A year ago.

ROVE: A year ago, yes. Think about this, Bill Clinton announced for president in 1991 in the middle of October. He'd been a candidate at this point for, you know, six, seven weeks.

HANNITY: Predictions. You want to predict who the candidates we be, number one? And number two, will the Republican or Democratic nominee win the election?

ROVE: I think it's going to be Hillary. I don't know who it's going to be on the Republican side. I think it is going to be a tough, hard-fought race. It will be up in the air right until the end. I think it's likely to be the Republican nominee. But this is going to be a race where every day is going to matter. And the quality of the candidates and the quality of their campaigns and the quality of their efforts and the enthusiasm of people and — is going to matter, every single step of the way.

HANNITY: The architect, Karl Rove.

ROVE: Thank you, sir.

HANNITY: Thank you for stopping by. We appreciate it. Thank you very much.

ROVE: You bet.

Watch "Hannity & Colmes" weeknights at 9 p.m. ET!

Copy: Content and Programming Copyright 2007 Fox News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2007 Voxant, Inc. (www.voxant.com), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, LLC'S and Voxant, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.