How Should U.S. Handle Tension with Pakistan Over Imprisoned Diplomat?

This is a rush transcript from "Special Report," February 15, 2011. This copy may not be in its final form and may be updated.

SHANNON BREAM, ANCHOR: Alright, before the break, we asked you, should the U.S. continue to support Pakistan's government? Here are the results -- 23 percent have responded 'yes' so far, 76 percent say 'no.' Thank you very much for voting in our question tonight.

Alright, We are back with our panel, and we're going to talk about our current stressor with Pakistan, which is the fact that consular employee, Raymond Davis is being held after being accused of murdering two Pakistani men. Here is what the president said about the situation today.

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BARACK OBAMA, PRESIDENT OF UNITED STATES: We've got a very simple principle here that every country in the world that is party to the Vienna Convention on diplomatic relations has upheld in the past and should uphold in the future. And that is if our diplomats are in another country then they are not subject to that country's local prosecution.

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BREAM: And yet Raymond Davis is still being held there. Charles, what do you make of the way the administration has handled this so far?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well I like what the president said. I think we really have to be stern about this. In foreign affairs some things are complicated and others are not, and this isn't. Anybody holding an American diplomatic passport is immune and has to be untouchable.

We learnt our lesson in the Iranian hostage crisis 30 years ago which deeply harmed American deterrence and respect for America around the world. And this is an example we cannot tolerate and really has to put in question our relations with Pakistan.

If they insist on playing on are stirring up anti-American sentiment using this as one case and other cases as well, we really have to have what Henry Kissinger called an "agonizing reappraisal of our relationship." After all, we are spending huge amounts of treasure and blood in the region for a government that works against us in many ways.

And we haven't spoken about this, but this is India's sphere of influence. It is a rising world power. It worries about Pakistan as much as we do, and I wonder if isn't time to actually think about turning over the hegemony over this area or at least a responsibility of thinking about -- to India. That would get the attention of the Pakistanis.

Not a direct takeover I mean, but in a sense saying, "look, this is an area where we are heavily invested. Pakistan is not a reliable ally in this. Afghanistan is becoming a difficult area for us. This is your area of the world. Help us in some way."

BREAM: No question that this particularly situation is impacting the relationship. Some comments today from Bruce Riedel of the Brookings Institution about how we are already seeing this play out.

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BRUCE RIEDEL, BROOKINGS INSTITUTION: The impact of this affair is already very clear. We've already suspended one meeting of the trilateral U.S.-Afghanistan-Pakistan engagement policy. The visit of Pakistani President Zardari to Washington next month is said to be in jeopardy, and the promised visit of President Obama to Pakistan in 2011 is also now in jeopardy.

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BREAM: And A.B... there is also, of course, the question about the billions in aid that we spend to Pakistan?

A.B. STODDARD, THE HILL: Well we do because the Afghanistan problem is our Pakistan problem, which is why I don't know how we can really threaten and cajole. Senator Kerry will go over there, he will really hope to get Mr. Davis -- to pressure them to release Mr. Davis and to remind them of the importance of our strategic alliance.

It is a relationship that is deteriorating. It is a weak government. They are providing safe haven there for the Taliban. They are being intimidated by the Taliban right about Mr. Davis' arrest and capture and imprisonment. And I -- no matter what the conversation is about aid, this is all about what goes on with our effort in Afghanistan, without Pakistan I don't know how we can succeed in Afghanistan.

BREAM: And Steve, what do we do with the complicating factor that we have Taliban leaders, a group linked to Al Qaeda. They are threatening, essentially, Pakistani officials saying if you give Raymond Davis back to the U.S. you are going pay the price?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Right, and I'm not even sure they needed that kind of encouragement to make them doing what they are doing. Remember, it's important to note that local officials in Lahore, had leaked parts of his police tape to the Pakistani news media to inflame the situation. And you have a country where it doesn't take much to inflame a situation. Remember the Koran flushing incident of the murder of the governor -- the Punjab province, and this happened sort of on its own.

And I agree with Charles though about the policy implications for the United States. You can not set a precedent where you take this lightly or you negotiate in some public way. You have to take a hard line and say, this is unacceptable, this is violation of international law and we will hold you accountable.

BREAM: And, Charles, quickly, last word to you, does Senator Kerry make a difference, what does make a difference here?

KRAUTHAMMER: Well, if you want to have a soft face, or ya know, a polite face for a negotiation, OK. But the bottom line has to be, release him and release him now or there will be a cut off of aid, a cut of contacts, a cut off of the visits. It's going to be a severe price and then in the end you may actually -- we may cut you off entirely and leave you on your own. This has to be an issue on which there is no compromise.

BREAM: What kind of timeline do you think we're looking at?

KRAUTHAMMER: A few days.

BREAM: Alright.

KRAUTHAMMER: There has to be a response. They cannot hold on to this guy. And the idea that it was officials inside who leaked this and made it an issue, I think, tells us how hostile is the attitude towards the United States inside of what is at least reputed to be an American ally.

BREAM: Alright, panel, thank you very much. That is it for the panel. But stay tuned. There has been a lot of speculation about the political future of former Florida governor Jeb Bush, but it might just be a different Bush who's got a Washington outlook. That's next.

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