This is a partial transcript from On the Record with Greta Van Susteren, January 2, 2003. Click here to order the entire transcript of the show.

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GRETA VAN SUSTEREN, HOST:  Many say they hate us, so why are 37,000 of our troops putting their lives on the line to keep South Korea safe?  Joining me here in Washington is former ambassador James Lilley, and Leon Fuerth, former national security adviser to Vice President Gore.

Ambassador, to you.  Your thoughts on whether or not the North Korea crisis is getting to be a serious one.

JAMES LILLEY, FORMER U.S. AMBASSADOR TO SOUTH KOREA:  I don't think so.  I think it's a long-term conflict we have with North Korea, and we have to get our friends and allies together on this.  I would like to comment on South Korean anti-Americanism.  I came in in 1986, and there was 200,000 people in the street demonstrating against the South Korean government and their American backers.  So this is a phenomenon we've gone through for many, many years.  It's part of the Korean character.  It's worse now, no question about it.  But I'm sure we can deal with it.

VAN SUSTEREN:  Leon, why is it -- first of all, do you agree that it's worse, the anti-American sentiment in South Korea?  And if you agree with it, why is it worse?

LEON FUERTH, NATIONAL SECURITY ADVISER TO VICE PRESIDENT GORE:  More time passes, the fewer people in Korea remember the role that the United States played in helping them protect their own freedom and the more time the younger generation has to think about allegations that the United States was responsible for dividing the peninsula.  So an old relationship begins to fade, and old myths begin to be revived that work against us.

The other factor here is that they've just elected a new government which really campaigned on the notion of really pushing relations with the North.  And so that new government has got some problems in trying to figure out what its stance is in the situation.

VAN SUSTEREN:  Is that sort of thumbing its nose, the new president, in some way, in his campaign, thumbing his nose as the U.S., as he campaigned?  In his campaign, he said, Let's improve relations with the North?

FUERTH:  No, I think it's a mistake for us to take these things as if they're personal insults.  They are expressions of politics and policies of an opposition party in a democracy, the same as some of the other things that have happened to us in the course of our relations with the Germans.  And I'm not talking about the last election, I'm talking about the institution of the Ostpolitik years ago in Germany, which we didn't that much at the time.

We have to deal respectfully with the views of an incoming government.  That government, on the other hand, is having a tough time, I think, figuring out where it wants to be on this, having first said it wants us to go lightly and now sort of oscillating about whether it wants to take a tougher line with the North Koreans.

VAN SUSTEREN:  Ambassador, do you think the Bush administration was disappointed with the election of the new president in South Korea?  This wasn't our first choice.

LILLEY:  No, I can't speak for the Bush administration on this one.  I think we'll take whatever the person that free people choose.  I think...

VAN SUSTEREN:  But there's some level -- I mean -- I mean, the other one -- I mean, was -- the other candidate was more in line with what had historically been our policy towards North Korea.

LILLY:  But certainly, we were aware there was great change taking place, and we knew there was a surge in anti-Americanism, which Roh Moo-hyun, the man that won, took advantage of.  He didn't cause it, he took advantage of it.  It swept him in.

But I think his rhetoric as the president-elect is very different from his rhetoric as a candidate.  It's already started to change -- his messages to George Bush, his position on nuclear weapons on the peninsula, a number of things he's said which I think have clarified his position to a degree.  But I agree with Leon that this is still a very sticky problem in South Korea, to reconcile our approach with theirs.  I think we can do it because already, I see signs that the Americans are not going to cut humanitarian food aid, necessarily.  They're going to continue to deliver it.  They will feed starving children, but obviously, it will be cut, as will the Japanese and South Korean, Chinese food.  We hope that there will be leverage imposed on North Korea.  And I think this is the only thing you can use.

One more comment.  When you're dealing with North Korea, you have two sides to deal with in this particular situation.  You have the military and the economic.  The military's their strong suit.  They're very strong militarily.  You don't mess with it.  All you do is to deter it and neutralize it, which we've done.

On the economic side, they're very vulnerable.  They're on a life support system which started in the '90s.  That can be shrunken or open in terms of how they behave.  I think this is the best leverage we have on them, and we're working on this right now.  And we'll have a meeting probably next week of the six nations, establishing principles.  Probably that's all.  No nuclear weapons on the peninsula, and then move on to take tactical steps which carry this out.

VAN SUSTEREN:  Leon, as Americans are sitting here watching tonight this show, what do we get out of our relationship with South Korea?

FUERTH:  Well, for on the order of half a century, all we got out of that relationship was a very strong ally.  They fought with us in places where many other countries would not come.  And we got an ally, which of course, was interested in protecting its own territory and its own independence.  And even though the North outgunned them and outmanned them, nobody doubted that the South Koreans would be very formidable if they were attacked.

What concerns me in the present situation is that I have a lot of experience with sanctions, having been responsible for operating them against Serbia.  They are never water-tight.  You never get the kind of support that you expect, even from countries that you think are going to provide it.  And countries that seem to incapable of surviving even another week manage to go on for years.  So it's interesting that we're now back to reliance on sanctions.

VAN SUSTEREN:  What do you suggest?

FUERTH:  I think the first thing is that we need to find out one way or the other what's on the North Koreans' minds, if that's at all possible.  I know the administration is not going to negotiate with them, but you can find out to your own satisfaction what they're after by means that don't have to be called negotiation.  Now, the problem here is that if what they're after is a nuclear weapon and we decide that that's where they're going, there is a "What then?" issue that nobody has faced up to -- not the administration, which doesn't want to contemplate this, and not other people who are talking about this.  And that's the really frightening and troubling thing.

VAN SUSTEREN:  And of course, I actually -- I mean, I thought that was the given.  I thought that was the whole point of what North Korea was after, was nuclear weapons.

FUERTH:  Well, if they -- if it is given, then we're in deep trouble because even the administration's hope of seeing them reverse themselves is not going to happen.

VAN SUSTEREN:  All right, gentlemen -- Ambassador, Leon -- thank you both very much.

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