The following is a transcribed excerpt from 'Fox News Sunday,' June 13, 2004.

CHRIS WALLACE, FOX NEWS: On a busy week for U.S. foreign policy, we are joined now by the secretary of state, Colin Powell (search).

And, Mr. Secretary, welcome.


WALLACE: Thanks for coming in today.

POWELL: Good to be here. Thank you.

WALLACE: Let's begin with the assassination of these two senior Iraqi leaders over the last two days. It seems clear that this is a way that the insurgents are going to try to destabilize the new government.

What can you do about it?

POWELL: Well, we are going to do everything we can, using our military forces there and the Iraqi security forces to try to defeat these murderers. I mean, let's be clear about what's going on here. We are trying to return sovereignty, and we will return sovereignty to the Iraqi people at the end of the month.

Very brave and bold and courageous Iraqi leaders have stepped forward into positions of responsibility. And these murderers are trying to assassinate them, to undercut this new government.

But they're not going to be successful. We're going to stay the course. And I'm proud of the way in which Prime Minister Allawi and President Yawer are stepping forward to take leadership roles and to move forward to take sovereignty back and to bring the Coalition Provisional Authority to an end and to help the Iraqi people to a better future.

WALLACE: But we're talking about hundreds, potentially thousands of new Iraqi officials. Do you have some plan, some security measure? If they're going to target these people, how are you going to protect them?

POWELL: Well, it's hard to protect an entire government. I mean, it's very difficult. And they are using their own protective services. Iraqi police are being used. We have private contractors who are involved, as well as trying to provide general security through the use of our military forces.

But it's going to be a dangerous period. And these murderers have to be defeated. And let's be clear about what they are. They're murderers. They're terrorists. They do not want the Iraqi people to have a government that rests on a foundation of democracy, freedom and the rule of law.

The U.N. has passed a resolution that endorses all of that, and these people are against their own people. They are against this sovereign government. They are against the international community. They are murderers, and they can't be allowed to prevail.

WALLACE: In Saudi Arabia, terrorists have killed one American and apparently kidnapped another. What can you do to protect them?

POWELL: Well, we have drawn down our official presence in Saudi Arabia, and we have cautioned Americans against travel into Saudi Arabia. We are working with the Saudis to go after these people. The Saudis now know that they have a very serious problem within the kingdom, and they know that it's going to require all their resources, not only their military and police resources — they have to cut off funding to the kinds of organizations that might have given comfort to these sorts of terrorist activities.

And the Saudis know they've got a battle on their hands, and we're going to support them in this battle.

WALLACE: Are you satisfied with the Saudi response?

POWELL: I am satisfied with what they have done so far. I think that there is more that they can do. They can build up their forces. There's probably more we can do with respect to intelligence exchange, and we are working at all of these areas.

WALLACE: All of this, ironically, comes on a week when there was a lot of good news, when there was a new Iraqi government formed, when the U.N. voted unanimously to support the new government and its relationship, its arrangement with U.S. forces.

How do you balance that good news with the continuing lack of security in Iraq?

POWELL: We knew this would be the case, and the president's made it clear that, as we moved forward toward returning sovereignty, which the Iraqis want — they don't want to be occupied, they want their own government, they're about to have it — we knew that those remnants of the old regime, the terrorists who are taking advantage of the situation, would increase their level of activity to try to show the Iraqi people that this isn't going to work. It is going to work.

And we have succeeded in getting the international community unified behind this plan. We have succeeded in identifying Iraqi leaders who have been willing to step forward and take over these ministries. Fifteen of the Iraqi ministries are now fully under the control of their own ministers, even before full sovereignty has been returned.

So we're moving forward. We're going to move forward toward elections at the end of the year, toward a transitional assembly, and we're going to stay there with our 138,000 troops, and other troops from nations that are committed to making this success will stay there, and do everything we can to defeat this insurgency.

WALLACE: Let me give you my advice, what I would do if I were secretary of state, which I'm sure you've been waiting for.

Why not speed up the turnover of power, move it up before June 30th? As you say, you've obviously given them a deadline. You know that the insurgents are going to go and try to destabilize things in the run-up to June 30th. Why not turn over power right now, so that it is perceived as an attack on an Iraqi government, and not a U.S. occupation?

POWELL: It takes time to go from the identification of individuals, which we did on the 1st of June, to getting a resolution, which we did this week. You have to give Prime Minister Allawi and the other leaders an opportunity to get themselves ready.

We have to have a sensible, measured turnover. Now, 30 June was the date that was selected, and it looks like a good date so far.

These insurgents were going to be doing what they're doing before the 30th of June and after the 30th of June. I don't know that they are gearing it specifically toward the 30th of June. We're going to have a continuing problem with these terrorists.

Nevertheless, we have to make sure that Prime Minister Allawi and his government are ready to take over, and take over in an effective way.

WALLACE: I take it that means you're not going to take my advice?


POWELL: Well, we've got some time yet to go, Chris.

WALLACE: Let's turn to the G-8 summit this week, and what French President Chirac had to say about the idea of putting NATO troops into Iraq. Let's take a look.


JACQUES CHIRAC, PRESIDENT OF FRANCE (THROUGH TRANSLATOR): Any interference by NATO in this region seems to us will carry many risks, including some risks of confrontation between the Christian West and the Muslim East.


WALLACE: Didn't the U.S. get stiffed again by Chirac and some of the other European leaders? They're not going to put new troops in Iraq. They're not going to forgive the Iraqi debt.

POWELL: We were not expecting the G-8 to produce a sudden outpouring of troops, nor do we expect a sudden outpouring of troops at the NATO summit later this month. We already have 16 of the 26 NATO nations contributing troops to the Iraqi effort, and there may be other marginal additions of troops coming from either NATO nations or other places in the world. But we're not looking for a massive increase. We're not expecting a massive increase.


POWELL: But let me finish the question. The fact of the matter is, real security is going to come from the Iraqis building up their own forces — their army, their police, their border patrol, their civil defense forces. What they really want is not more occupying troops coming in. They want the ability to protect themselves, and we are going to make our investment in that.

That was not ruled out by NATO. NATO may have a role to play with respect to building up police forces and other things NATO can do. There may be other things NATO can do short of a massive infusion of new troops, and we'll be talking to our NATO colleagues, and this will be discussed at the NATO summit later this month.

WALLACE: But by all accounts, the building up of the Iraqi security forces has gone much slower than anticipated. It's going to take at least another year.

You've gone so far, the administration has, to try to meet all of the concerns of the European community. I don't understand. Why not demand that NATO put troops in there? Why shouldn't they put troops in, to internationalize?

POWELL: NATO does have troops there. NATO nations, 16...

WALLACE: But not France, not Germany.

POWELL: Because they have said they do not intend to put troops there. We don't command NATO. NATO is an alliance of free nations, sovereign nations. All 26 have their own internal politics and the ability to make their own judgments. And France and Germany have made a judgment that they were not in favor of this war and they do not intend to send troops there, and we never expected that they would.

But they did join us in the unanimous passage of U.N. Resolution 1546, which blesses the plan that we are under. They have left themselves open to other ways of supporting our efforts in Iraq, through police training, through other things we might do with NATO. We are examining the possibility of a NATO headquarters becoming involved.

But the president did not expect either at the G-8 nor at the NATO summit later this month to receive a significant addition of troops from NATO nations.

WALLACE: John Kerry says that President Bush and all the rest of you are not doing enough to put an international face on the effort in Iraq. Is there anything more that could be done?

POWELL: John Kerry I'm sure noticed that we got a 15-0 vote in the United Nations this week. That means that the United Nations endorses the transfer of sovereignty. The United Nations endorses the plan that goes to elections at the end of this year, the writing of a constitution. The United Nations Security Council endorsed this multinational force. It endorses the international community doing as much as it can to support Iraq within the context of each nation's sovereign choice and sovereign decision.

WALLACE: New subject. It turns out that Justice Department officials wrote legal memos stating that the president was not bound by prohibitions against torture in dealing with the war on terror.

And while the White House says that the president never approved any sort of torture, it has now been revealed that the senior officer in the area, General Sanchez, did approve more aggressive tactics at Abu Ghraib, including the use of unmuzzled dogs to intimidate detainees.

As a career military officer, are you troubled by any of this?

POWELL: As a career military officer and as an American citizen, I am deeply troubled by what happened at Abu Ghraib. I'm devastated by it. This is not the Army I knew.

WALLACE: But if I may, sir, if I may just ask, I'm not talking about Abu Ghraib, which I know you're upset about; I'm talking about the fact that at any level in this administration people were talking, considering the legality of torture and that certain measures like unmuzzled dogs were approved by senior command.

POWELL: What I have to do now is let Secretary Rumsfeld complete all of the investigations and inquiries that are under way and let the Congress perform its oversight role.

To go back to the beginning of your question, there may have been a lot of legal opinions and a lot of judgments being made, but the president made clear all along that he intended for us to be bound by our international obligations to treat people correctly, fairly and humanely.

And I know that was the president's position, because I heard it directly from him. And I'm just going to have to let these various inquiries run their course rather than making comments on specific press reports or papers that are flying around.

WALLACE: Fair enough, but let me just ask you one more question in this regard. Is it possible, in your mind, that just the fact there was talk about torture, it was being considered even in legal memos, and the fact that General Sanchez was approving more aggressive tactics like unmuzzled dogs, could that have started us down the road toward the abuses?

POWELL: I don't know what General Sanchez approved or did not approve, and I'll leave that to the military to make its announcements and not just go from press reporting.

But clearly, we were facing a new enemy. We were facing an enemy that was quite different than the enemy we had faced in previous conflicts, both with respect to the war on terror in Afghanistan and, to some extent, the terrorists that were also in Iraq. And we were clearly looking at all of our options and what we could or could not do, what we were bound and not bound to do.

And the president made it absolutely clear that torture is not an acceptable activity on the part of U.S. armed forces, and he said we must comply with our international obligations.

WALLACE: Finally, I want to take you back to the Reagan years where you served in a very distinguished fashion as the national security advisor. Mikhail Gorbachev gave an interview this week in which he said that his growing prestige did more to promote arms agreements than anything that Ronald Reagan did.

And I see you chuckle there a little bit. And I want to put up something that he said during this interview. Here's how he put it: "All that talk that somehow Reagan's arms race forced Gorbachev to look for some arms reductions, et cetera, that's not serious. The Soviet Union could have withstood any arms race."

Mr. Secretary, is that how you remember it?

POWELL: No. The Soviet Union could not have withstood any arms race. The Soviet Union had bankrupted itself by the creation of a huge military force that had no utility with respect to the welfare and well-being of the Soviet people.

The United States was also strong, particularly after Ronald Reagan came into office and built up the armed forces again to where it should have been. And we also could afford to take care of our people; the Russians couldn't.

POWELL: Now, both of these individuals, Mikhail Gorbachev and Ronald Reagan, I knew very well. I worked very closely with them for the last two years of the Reagan administration. Both of them are historic figures. Both of them worked together to help bring the Cold War to an end.

Ronald Reagan was there to help Mikhail Gorbachev do what Mikhail Gorbachev knew he had to do, reform and open — glasnost, perestroika, you remember those two words, Chris, in the old days — reform and open the Soviet Union to new ideas, to investment.

But what Gorbachev was trying to do — and he doesn't take note of it in his statement — was reform communism to make it work. Couldn't happen. Wouldn't happen. Instead, the Soviet Union collapsed, and he was pushed out of power. And the Soviet Union broke into its many, many parts.

Russia remains a vital part of the Eurasian community. It is now in partnership with the United States. But it is no longer a communist nation. Communism couldn't succeed. Gorbachev thought it could.

WALLACE: Finally — and we have about two minutes left here — and I'm sure you've thought a lot about Ronald Reagan and your experiences over this last memorable week. What did you learn from Ronald Reagan as a politician, as a statesman, a world leader, and as a man?

POWELL: Have a vision; but it's not enough to have a vision, you have to communicate that vision to others. You have to communicate it to people who work with you and for you. You have to communicate it to the world leaders with whom you come in touch.

And he did that so effectively. People can argue that, oh, Margaret Thatcher was sharper than Reagan, and Gorbachev had more command of details, but both of them fed off the vision that Ronald Reagan had.

So having a vision, having a sense of optimism — he never saw the darkness in anything. He always saw the opportunity in everything. And I've learned a great deal from that: Always be looking for the opportunities, and always be optimistic about what you can do with that opportunity.

Have a sense of humor to break the tension in times of great toil. And he was a master of that.

And above all, believe in yourself. He had such a level of self- confidence. He believed in himself because he believed in America. And America flowed through him to the rest of the world, the values that we believed in. The things that have made it such a success came through in everything that Ronald Reagan did.

When we talked about Gorbachev coming to the United States, what do we show him? What do we show him? And Reagan always had a simple answer to that: "Let's show him our subdivisions, let's show him our shopping centers, let's show him our car plants. I want to take him to my ranch. I want to show him America. No missile fields, no submarines. I want to show him the American people and the American system and to show him what he's missing." It was as simple as that, but it wasn't simplistic.

It was direct, it was a vision. He believed it. It reflected the American people, reflected American values. And if we had another hour, I could tell you how it manifested itself in my relations with the Soviet military. They kept saying, "My God, look at this. Look at what the Americans can do and we can't do." They knew they'd lost. They knew it was over.

WALLACE: We'll have you back for another hour to talk about all that.

Mr. Secretary, thank you so much.

POWELL: Thank you.

WALLACE: Appreciate your reflections and coming in today.

POWELL: Thank you.