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This is a partial transcript from The O'Reilly Factor, January 30, 2002. Click here to order the complete transcript.

O'REILLY: The "Impact" segment tonight, perhaps the biggest surprise in the president's State of the Union address was his mentioning Iraq, Iran, and North Korea as countries which embraced terror. Saber-rattling was loud and clear.

With us now is former deputy secretary of state Strobe Talbott, who has co-edited a book called The Age of Terror: America and the World After September 11. Mr. Talbott is also the director of the Yale Center for the Study of Globalization.

That catch you off -- it caught me by surprise last night when he mentioned those three countries.

STROBE TALBOTT, EDITOR, "THE AGE OF TERROR": Yes, it got, I think, a lot of people to pay even closer attention. And of course the big question is, what does it mean, exactly? President Bush used a really wonderful piece of rhetoric, and I mean that as a compliment, a very stirring phrase, "an axis of evil," and thus conjured up FDR in World War II and Ronald Reagan versus the evil empire.

But what does it mean, exactly? Does it mean that we're going to go to war, that we're going to use military...

O'REILLY: Well, I think he's putting...

TALBOTT: ... action against these three countries?

O'REILLY: ... these people on notice that he's looking hard at them. I don't, I don't think you take it any further than that without being...

TALBOTT: Yes, and...

(CROSSTALK)

O'REILLY: ... conjecture.

TALBOTT: ... and Secretary Rumsfeld was pretty clear about...

O'REILLY: All right. But I want to get to the...

TALBOTT: ... (UNINTELLIGIBLE) pretty unclear, maybe, I should say.

O'REILLY: While you were in the State Department with Warren Christopher and Bill Clinton was president, you guys were trying to have a detente with North Korea, and, you know, you were trying to get them to be reasonable. Did you make any success there?

TALBOTT: I think there was some movement, and I think there's some indication that the Bush administration, at least before last night, was going to pick up on that. Among other things, it's very important to our key allies, like the Republic of Korea, South Korea, Japan, and others.

O'REILLY: But how dangerous are these North Koreans? If he's going to go out and hang them on the clothesline, they must be pretty dangerous.

TALBOTT: Well, they are dangerous, and they've done a lot of bad things. Now, the question is, what do you do about it? What combination of pressure and engagement? And the question about last night's speech, I think, is whether we're going to be shifting more towards pressure and even the threat of military force.

O'REILLY: Well, that's up to China.

TALBOTT: (UNINTELLIGIBLE) -- well, which, by the way, never -- the Chinese, the Japanese, the South Koreans...

O'REILLY: It's up to China.

TALBOTT: ... will all be pretty nervous about that.

O'REILLY: Right. The South Koreans, the Japanese will support what we do. China is the -- you know, they're not -- we can't do anything without them saying OK.

But you believe that North Korea...

(CROSSTALK)

TALBOTT: But Bill, Bill, the president...

O'REILLY: ... is a rogue nation?

TALBOTT: ... of South Korea very much wants for the United States to walk a careful line here, and...

O'REILLY: I know he what he wants, but in push turn to the shove, he's going to support us, he has to. He's a -- that whole economy is dependent on us.

Dangerous, though, these people in North Korea, in your opinion?

TALBOTT: You bet, you bet...

(CROSSTALK)

O'REILLY: Very dangerous?

TALBOTT: ... they have been trying to develop nuclear weapons. They have ballistic missiles. So sure...

O'REILLY: OK.

TALBOTT: ... we have to use whatever instruments we can. And the question is, what kind of a mix?

O'REILLY: Did you make any progress with Iran when you were in office there, or was that just a stubborn problem you can't fix?

TALBOTT: Well, I think it's certainly stubborn. T he interesting question about Iran is what's been happening inside of Iran. It's very different from Iraq, which is one reason I was a little surprised that

President Bush lumped these three together.

O'REILLY: He's mad at Iran.

TALBOTT: Well --

O'REILLY: Because of those weapons going to the Palestinians.

TALBOTT: Well, there's another reason to be mad at Iran, and that is that they have been developing weapons of mass destruction and ballistic missiles. But it's quite different from Saddam Hussein. Saddam Hussein's got a total monopoly over Iraq. In Iran, you have this kind of interesting contradiction. You've got these obscurantist mullahs on the one hand, ho've been in charge since the fall of the shah, and on the other hand, you have an elected president...

O'REILLY: Yes, the civilian government...

(CROSSTALK)

TALBOTT: ... who -- who...

O'REILLY: ... who wants to be moderate.

TALBOTT: ... who's trying to nudge Iran into the modern age.

O'REILLY: Right. But Bush has got to know something about Iran. I think it also has to do with Afghanistan in the sense that Iran is trying to (UNINTELLIGIBLE), you know, arming these warlords over there and destabilizing. And I think they took al Qaeda people. I think they took al Qaeda people into Iran and let them escape in there.

TALBOTT: Yes, but Bill, there was an interesting dynamic during the last several months. This is the land that brought us, you know, the enemy of my enemy is my friend. The Iranians actually supported us because we were taking down the Taliban.

O'REILLY: Yes, right.

TALBOTT: And I have a feeling that they're probably reassessing what's likely to happen...

O'REILLY: But if they allow the...

(CROSSTALK)

TALBOTT: ... (UNINTELLIGIBLE)...

O'REILLY: ... al Qaeda to go in there and develop their camps, which I think is what Bush is worried about, you know, reorganize within Iran, then we got to, we got to take care of these people.

TALBOTT: Yes, but what -- you know, (UNINTELLIGIBLE) look, the question is, what is this -- how is this actually going to play out? What is it going to mean...

O'REILLY: Air power.

(CROSSTALK)

TALBOTT: ... in terms of concrete...

O'REILLY: Air power. If they see al Qaeda camps in Iraq or Iran, they just send air power.

TALBOTT: But...

O'REILLY: They'll knock them right out. That's what they're going to do. Would you guys have done it?

TALBOTT: Well, we, of course, did use cruise missile attacks...

O'REILLY: (UNINTELLIGIBLE)

TALBOTT: ... against targets in Afghanistan after Usama bin Laden hit our embassies in Africa.

O'REILLY: Right, right. All right, Mr. Talbott, very interesting, and we hope you come back and keep us up to date, you know. Like to have you as one of our go-to foreign policy guys.

TALBOTT: Good to be with you, Bill, thanks.

O'REILLY: Right.

Plenty more ahead as THE FACTOR moves along this evening. The state of New Jersey issues politically correct standards about history that have some people very angry. And we'll talk with a private detective who was hired to follow Michael Jordan. We hope you stay tuned for those reports.

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