FOX NEWS SUNDAY

Transcript: Ambassador Susan Rice

The following is a rush transcript of the June

13, 2010, edition of "Fox News Sunday With Chris Wallace." This copy

may not be in its final form and may be updated.

CHRIS WALLACE, ANCHOR: While much of the focus here at home has been on the gulf oil spill,

there have been important developments in trouble spots around the

world. Joining us now, the U.S. ambassador to the United Nations, Susan

Rice.

Ambassador Rice, there's a report in

the New York Times this weekend that Afghan president Karzai is looking

to cut his own deal with the Taliban because he has growing doubts that

the U.S. and NATO can win the war in Afghanistan.

First, is that true? And secondly, does the U.S. still regard Hamid Karzai as a full partner in our efforts in Afghanistan?

AMB. SUSAN RICE, U.S. AMBASSADOR TO THE UNITED NATIONS: Well, Chris, we have every confidence that the United States and NATO,

working with our Afghan partners, will defeat the Taliban in

Afghanistan and beat back Al Qaida in Afghanistan and Pakistan. That

remains our objective and we're quite confident of accomplishing it.

Hamid

Karzai remains a very important partner of the United States, as does

the entirety of the Afghan government. We share the view that the

purpose of our military campaign and military pressure is to support

and enable a political solution to the conflict in Afghanistan.

President

Karzai has made clear that he seeks to reconcile with those on the

opposite side who are prepared to renounce violence, agree to support

the Afghan constitution and renounce the Taliban and Al Qaida. We are

in agreement on that.

So we continue to work together toward those aims, and we're confident in success.

WALLACE: But how do you — what do you make of the report in the New York Times

that he has lost faith, that the U.S. and NATO can prevail?

And

what do you make of the fact that he got rid of the intelligence

minister and also the interior minister who had been strong supporters

of NATO?

RICE: Chris, my sense is that there's a lot

that is mistaken, if not fallacious, in that New York Times article.

Our understanding and what we hear every day is that President Karzai

remains committed to his partnership with the United States and NATO.

He

knows that the security of Afghanistan and the future of Afghanistan is

inextricably linked to the work that we're doing there together, and so

we don't have any basis for seeing it as the — as the New York Times

portrayed it.

With respect to the

ministers that have recently resigned, obviously each of them as

individuals and President Karzai as head of state have the right and

the responsibility to determine who will serve in that government.

We're very confident that we will continue to partner well with those

ministers and ministries that have been very essential to our efforts

there.

WALLACE: But the

top U.S. commander in Afghanistan, General Stanley McChrystal, said

this week that the offensive in Kandahar is falling months behind, and

reportedly the reason is because Karzai has provided — failed to

provide the security forces and the civilian leadership that would be

needed to hold Kandahar once we clear it.

RICE: No, Chris, I think the reason why the planned effort in Kandahar is

somewhat delayed — and I don't believe it's by many months — is because

we have learned some important lessons from Marjah, and that is that it

is important to prepare the ground, to have maximal support from the

local population, understanding that what we are doing there is to

their benefit, and bringing them on board is an important prerequisite

for success.

And that's what we're taking

time to do. We are basically conditioning the battlefield. A lot of

that work is political and economic and social. It matters before the

military operations commence, and it will be very essential afterwards,

to consolidate progress and ensure that the Afghan authorities are able

and prepared to assume the responsibilities that they must for

governance and for economic development...

WALLACE: Ambassador, the...

RICE: ... as well as security.

WALLACE: ... U.N. Security Council passed a new set of sanctions this week

against Iran that you called tough and comprehensive. But yesterday,

Iran's nuclear chief said that they plan to construct a new uranium

enrichment plant by next March. What does that say...

RICE: Chris, this announcement...

WALLACE: ... about changing their behavior?

RICE: This announcement is not new. They've said last fall that they intended

to construct 10 new uranium enrichment facilities, which is one of the

reasons why we were able to gain the support of Russia and China and 13

members of the Security Council to pass a very tough, very

comprehensive sanctions regime on Iran.

WALLACE: But after the sanctions, Ambassador, they're continuing ahead with a construction project.

RICE: Well, they say they're continuing, Chris, and we'll see what, in fact,

they do. Their defiance of previous Security Council resolutions, as

well as of the IAEA, are the reason why they're facing more penalties.

What

each sanctions resolution does, and particularly this one because it

has so many new tough financial measures, restrictions on their ability

to import arms, restrictions and bans on their ability to launch

ballistic missiles, cargo inspections, financial constraints — the

reason why each one of these resolution matters — because each one ups

the cost to Iran of pursuing the course that it's on.

Our

aim here is to make the — is to change Iran's cost-benefit analysis so

that they find it very costly and painful to continue on the path

they're on and choose instead a process by which through a peaceful

negotiated settlement they give up their nuclear program. That's the

aim.

Now, there's no guarantee that any

single resolution, even one as tough and comprehensive as this one,

will by itself suffice, but as you know, not only are we working

through the Security Council and now have the toughest sanctions regime

on the books against any country now in the world today with respect to

Iran, but we're also working with our European partners, with other

nations, with Congress to impose additional sanctions that will add to

the pain that Iran faces.

WALLACE: But, Ambassador...

RICE: And, Chris, one important point on this, if I just might make a point...

WALLACE: Sure.

RICE: ... the Iranians worked very, very hard. They spent a lot of money and

they used all their diplomatic influence to try to prevent this last

round of sanctions, because they knew that the measures in this

resolution would cripple substantially their ability to pursue their

nuclear program.

They failed in that

regard. And now we're hearing the customary bluster to which we all are

now accustomed that comes out of Iran when it's feeling threatened.

WALLACE: But, Ambassador, the White House and you have said that this policy is

working to isolate Iran. Let's take a look at the record just in the

past year. Iranian president Mahmoud Admadinejad has been welcomed in

Kabul, Istanbul, Copenhagen, Caracas, Brasilia, La Paz, Senegal, Gambia

and Uganda. He's in China this weekend.

And

in the Security Council vote on sanctions, for the first time the U.S.

failed to get unanimous support. Turkey and Brazil voted no.

RICE: No, that's actually not true.

WALLACE: Let me — if I may just finish, Turkey and Brazil voted no. Lebanon abstained. Ambassador Rice, how is that isolation?

RICE: It's isolation, Chris, because a number of the countries that you just

mentioned, including China, Uganda and others, voted with us in the

Security Council to sanction Iran and impede its ability to pursue its

nuclear and missile programs.

Admadinejad

has traveled freely around the world and he'll likely continue to do

so. But it's going to cost him and his cronies in the government,

particularly the Iranian revolutionary guard corps, to continue their

programs.

Fifteen major entities of the

Iranian revolutionary guard corps, which is the backbone of

Ahmadinejad's regime, will be sanctioned, have their assets frozen and

individuals unable to travel as a consequence of this resolution. They

are more and more isolated.

Forty

companies belonging to Iran in total sanctioned, assets frozen,

individuals unable to travel. So the isolation is increasing and the

noose is tightening.

Now, let me address

the issue of Turkey and Brazil. Those were the two countries, as you

know, that voted against this resolution. In the past, the resolutions

have not all been unanimous, for the record. There have been

abstentions in the past.

But in this

instance, Turkey and Brazil, whose leaders went out on a diplomatic

limb and tried an eleventh hour effort to broker a deal regarding the

Tehran research reactor to try to halt sanctions, found that they were

the only ones on the Security Council that thought that effort was

credible.

The rest of the international — the rest of the states on the — on the...

WALLACE: OK.

RICE: ... U.N. Security Council and the rest of the international community

looked at their efforts and thought it insufficient and not relevant to

the reason why Iran was sanctioned. So they stood by their own plan and

stood apart from the rest of the council, but that's not indicative of

a lessening of international pressure on Iran.

WALLACE: Ambassador, let's turn to Israel and how to investigate its raid of the

Turkish ship that was trying to run the blockade that the Israelis have

imposed on Gaza.

Does the Obama

administration oppose any effort by U.N. General Secretary — Secretary

General Ban Ki-moon to establish an international investigation?

RICE: Chris, our position has been very clear from the point two weeks ago

when we worked very hard and I worked very hard in the Security Council

to try to pass a presidential statement that called for a credible,

impartial, prompt and transparent investigation.

We've

said from the outset that we believe Israel has the will and the

capacity to conduct such a credible and impartial investigation. We've

been working very closely with Israel over the course of the last two

weeks as they think through how they plan to constitute such an

investigation. And that is what we support and what we think is...

WALLACE: But let me...

RICE: ... necessary to address this...

(CROSSTALK)

WALLACE: Ambassador, let me ask you a couple of specific questions, and we're

running out of time, so I'm going to ask for brief answers, if I can,

from you.

Will the U.S. refuse to

cooperate in a U.N. investigation? Will the U.S. refuse to pressure

Israel to participate in a U.N. commission?

RICE: We are not pressuring Israel to participate in anything that it chooses

not to participate in. We wouldn't actually have any role if there were

to be a U.N. investigation.

But, Chris,

nothing has been decided, to my knowledge, by the secretary general.

Nothing has been announced. So the only investigation that we're

certain is imminent is the one that Israel is constituting.

We have every expectation that it will constitute a process that, in the end, we will all deem to be credible and impartial...

WALLACE: Well, let me ask you...

RICE: ... and we think that's what's required, and we're looking forward to it.

WALLACE: Ambassador, let me ask you about that. Does the U.S. want to see an international role in an Israeli investigation?

RICE: We think that an international component would strengthen the

investigation and certainly buttress its credibility in the eyes of the

international community, and we've had discussions with Israel as to

how and whether they might go about doing that.

WALLACE: Well, I guess I have to ask why. And a simple question: Would the U.S.

accept foreign participation if this country were investigating actions

by the U.S. military?

RICE: I think it depends on the circumstances, Chris. That's obviously a

hypothetical. But in this instance, it's obviously ultimately the

Israelis' choice. They have every right, as we would and any other

nation would, to conduct a national investigation of any event that

affects their national security. We'll wait to see what exactly it is

and how Israel decides to proceed. But our view is that Israel, as a

democracy, as a country with a tradition of strong military justice,

can conduct an investigation of this sort however it chooses to

constitute it.

And we hope and expect and believe that it will be credible and impartial and...

WALLACE: And...

RICE: ... meet the terms of the statement that we all agreed to.

WALLACE: And finally, Ambassador Rice, and we have less than a minute left,

North Korea. Why doesn't the U.S. put North Korea back on the list of

state sponsors of terrorism now that it has been alleged — and

according to an international investigation — they were responsible for

sinking a South Korean warship that killed 46 South Koreans?

RICE: Well, first of all, Chris, that was an outrageous act of aggression

that we condemn, and it needs to be punished. Our hearts go out to the

families of the sailors who were — whose lives were lost in that event.

We

will be discussing this issue on Monday in New York at the Security

Council, when South Korea will come and present its evidence to the

other members of the council as to what transpired.

We

treat the terrorism list as a tool that applies in certain legal

circumstances. And as you've heard Secretary Clinton and others from

the State Department say, we're assessing the legal requirements. We're

assessing the facts. And we'll make a determination on that basis.

WALLACE: Ambassador Rice, we're going to have to leave it there. We want to

thank you so much for coming in today and for answering our questions.

And, Ambassador, please come back.

RICE: Thanks. Good to be with you, Chris.