The following is a transcribed excerpt of the November 28, 2004 edition of "FOX News Sunday."

CHRIS WALLACE, HOST, FOX NEWS SUNDAY: With important new developments this week in Iraq, Iran and Ukraine (search), we thought this was a good time to check in with Senator Richard Lugar, chairman of the Senate Foreign Relations Committee (search).

And, Senator, welcome. Thank you for sharing your Thanksgiving holiday with us.


WALLACE: A full plate of things to discuss today.

Let's start with Iraq, where 17 political parties, mostly Sunnis (search) and now Kurds (search), have called for delaying elections six months until July 30th, until they say the security situation is settled there. But on the other hand, the Shiite majority says absolutely not, elections go ahead on January 30th.

What should the U.S. position be about the idea of postponing elections?

LUGAR: I think we should back Prime Minister Allawi (search) and say January 30th is the date.

Now, when Allawi came over here and visited with the president and members of Congress, he pointed out that there could very well be violence then, that only 15 of the 18 provinces were safe for elections.

But the problems of the legitimacy of his government and the continuation of the movement on to the constitution, on to an election, on to a time in which Iraqis can patrol their own streets and their own country, really demands January 30.

Ayatollah Sistani, the leading Shiite cleric, has weighed in very heavily and categorically that that is it, January 30, quite apart from the 17 Sunni groups and so forth.

I think that's where they're going to come down, and I think we ought to be backing Allawi.

WALLACE: Some Sunni groups are not only talking about a delay, they're talking about boycotting the elections, whenever they're held.


WALLACE: How can you hold elections, and should they be held, even if major parts of the Iraqi population refuse to participate?

LUGAR: Well, some Sunni groups have indicated they will not participate so long as the United States is in Iraq at all. Now, that really sort of categorically rules them out of the picture, so long as we are there fighting insurgents or doing whatever we're doing.

I think the Sunni demands are a part of a strategy, at least, of trying to hang on. They're not convinced there's going to be democracy in Iraq. Some of them believe that eventually we will tire of the whole process, the coalition of the willing will leave, and they'll take charge.

So this is still a rough ball game.

WALLACE: And what we're talking about here really is the big issue that has hung over the creation of a new Iraq from the beginning. And that is, how do you get the Shiite majority, which has been out of power for centuries, about 60 percent of the country, how do you get them to join together with the minority Sunnis and Kurds to create a new government? How do you do it?

LUGAR: Well, the Kurds are prepared to bargain, at least for a degree of autonomy. And, in fact, they would prescribe that for the entire country: that there be a federal system with probably a weaker central government.

Whether the rest will buy that or not, the Kurds will demand that in order to stay in the game. So the constitutional process itself, after you elect the 275, and however rugged that election is, is going to be a very tough process.

Now, getting to democracy in Iraq was always going to be a real challenge. It hasn't lessened. But at the same time, to delay all of this seems to me simply to bide the fact that it's not going to occur at all.

WALLACE: Let's switch if we can to Iran and a situation that is quite confusing.

The first reports we got this morning out of Tehran were that they had decided that they were basically breaking off the negotiations. They were going to go ahead with their nuclear research, which was a nonstarter for the West. And if went to the U.N. and economic sanctions, so be it.

The latest word we have just gotten is that they have backed off that and agreed to a full freeze.

Help us understand what's going on there.

LUGAR: Well, this would be the third time that the Iranians have finally decided to let things proceed. Twice before, they have found these 20 centrifuges, which we allege they're moving toward weaponization, to be indispensable. And that's the argument now, that they want the 20 centrifuges for peaceful purposes.

Essentially the Europeans have argued that there really has to be a stop on this. They've called for cameras to take a look at it, as opposed to just simply sealing them for good.

The Iranians apparently have decided once again to accede to that, as opposed to this going to a vote of the IAEA or then to the Security Council of the U.N.

WALLACE: But, Senator, I guess the question I have is: Given what seems to be a strategy of delay, agree, delay, back off but continue to develop the whole time, how can we ever trust the Iranians?

LUGAR: Well, I'm not certain we ever will. So this is why the president has called for verification. He keeps saying verify, verify.

Now, the Europeans are also claiming they want to see in writing pledges and plans for all this. They haven't seen that yet. And they claim they have to have that before they'll make a deal.

But my guess is this is probably not the last hitch in the situation. It's the third but probably not final.

WALLACE: Let's move on to the Ukraine. You just came back, where you were observing the elections there for President Bush.

And since you can't tell the players without a program, let's give people a primer again about what's going on there.

Just to remind people, Prime Minister Yanukovych — that's the man on the left — won the election with the backing of the Russians. But Viktor Yushchenko — that's the man on the right — who favors closer ties with the West, says the election was stolen. And afterward, you said there was a concerted program of fraud and abuse.

Now, today there have been more developments. Yanukovych, the man who, quote, "won," has said that the country is on the brink of catastrophe. Eastern Ukraine is talking about a referendum on regional status. It sounds like some talk about a split.

Are we approaching the possibility of a civil war there?

LUGAR: Probably not. But this story is tremendously important, perhaps the greatest story in the world right now, largely because it is about the space of freedom, whether it's going to expand or not.

And in this particular election, the government of President Kuchma allowed, or aided and abetted, wholesale fraud and abuse that changed the results of the election.

LUGAR: President Bush, in the letter that he gave me to deliver to President Kuchma, which I did last Friday, indicated we were highly dissatisfied with the first round in which we alleged wholesale fraud and abuse. And we asked the president to take responsibility, President Kuchma, because there would be consequences, our president said, if he did not.

Kuchma proceeded, and we had fraud and abuse that was worse the second time. The international observers, about 4,000 of them from Europe, the United States, and 10,000 from Ukraine itself, in that many of the polling areas — there are 33,000 polling areas — detailed point by point all of the absentee fraud.

And so, Yanukovych did not win the election.

WALLACE: But what do we do now? The Ukraine supreme court is going to hear arguments on the case beginning tomorrow.


WALLACE: And there's a lot of talk that what Yushchenko wants, what we want, is a revote. Is that what we want, a new election? And how can the West and the U.S. try to make that happen?

LUGAR: Well, the U.S. has not called for any particular solution.

Europeans looking at this have thought that another vote is probably desirable, and so does Yushchenko, the challenging candidate.

The facts are encouraging in Ukraine. The legislature, the Rada, by a large vote, has declared the election invalid. So you have that branch. The supreme court has said it's invalid, and they're taking a look at all the fraud and abuse and how you do remedies to this situation.

The only...

WALLACE: Well, have they declared it invalid, or have they just said they're going to hear arguments on it?

LUGAR: Well, my...

WALLACE: They said that they weren't going to allow it to be certified.

LUGAR: Yes, that's correct. And, of course, already the election commission had rushed ahead to certify it.

WALLACE: What do you think the answer should be?

LUGAR: I'd probably come out with the thought that the second election is the best idea but only if absentee balloting is eliminated.

Now, the Rada, the Ukraine legislature, passed legislation, the week before this second vote, eliminating absentee balloting. That's an extreme measure. I asked President Kuchma directly, "Why didn't you sign that?" And he said, "Well, people have the right to vote absentee." Well, of course, but not several times.

WALLACE: That point was that apparently people were going in buses from district to district and voting absentee many times.

LUGAR: Yes. And the intimidation of deans picking up absentee ballots from their students and voiding them. Employers intimidating their employees. This is really hardball, and it was systematic. All the observers of Yushchenko being thrown out.

So ultimately a second vote but only if you have reform.

WALLACE: And how do we make that happen? How much leverage does Europe and the U.S. have?

LUGAR: Well, the Rada itself — that is the legislature of Ukraine — is prepared to pass these bills. They did before, but the president didn't sign them.

The courts, in fact, ruled in favor of Yushchenko, awarding him many thousands of votes in the previous time. So there's an independence there.

I suppose the point I want to make and I was inspired by was that, given all of the authorities intimidating people, the young people and some of the old people, too, pushed back. They were determined really to create a space.

Now, that's not occurred, unfortunately, in Russia, as liberal democracy has receded, in my judgment.

WALLACE: I was going to ask you about that, because this has Cold War overtones, with, clearly, President Putin trying to keep Ukraine in his sphere of influence.

When you add that to everything that's going on in the Kremlin, with Putin centralizing power, taking away some of the democratic checks and balances, how concerned are you about developments in Russia?

LUGAR: Well, very concerned. This is why many Russians hope that the Ukraine manages to keep a space for democracy. The only other space there are the young Georgians, and they're being pushed by Putin, in Abkhazia and South Ossetia, to have no democracy there.

You know, we're in the process of watching a re-incorporation of the newly independent states back into Russia. And it's occurring because of economic ties, energy lines and what have you. And also, in the case of Ukraine, in the eastern part of the country, people want to use the Russian language. They really do not see Ukraine really as where they are.

WALLACE: Is there anything that President Bush can, should say or do with his friend, Vladimir Putin?

LUGAR: I would hope that he would continue the conversation. I understand that he had at the recent conference, in which they met. And the president discussed democracy, and apparently Putin lectured our president on democracy in Russia. He has to understand how things work there, and they don't work the same as in the United States and elsewhere.

Well, I think we understand that. And we're sad that that's the case for the Russian people.

There really has to be some hope for the Russian people and for all of the so-called newly independent states other than the authoritarianism being imposed, as we saw an example, I think, in this second round in Ukraine.

WALLACE: All right, we have about a minute left, and I want to go through a quick checklist of a job you have as chairman of the Senate Foreign Relations Committee.

The president has named Condoleezza Rice to replace Colin Powell as secretary of state. When will the hearings be held?

LUGAR: Not scheduled as yet. I had suggested a very early time. The White House suggested that that would not be appropriate — that is, in December. So we'll not be having hearings in December. But we'll have hearings as soon as possible in January.

WALLACE: Will she have any problems getting approved?

LUGAR: I don't believe so. I think there will be very strong support for Condoleezza Rice.

WALLACE: And do you see any significant change in the way the Bush administration conducts foreign policy under Secretary of State Rice?

LUGAR: Well, I don't see that for the moment, but, you know, this is an evolving situation. We've discussed today three areas that are very fluid. The administration is going to have to think through Iran, a lot of thinking about Iraq and certainly Ukraine and Russia.

WALLACE: We had a full plate, Senator. We ate it all.


Thank you so much for helping us clear all of that up. As you say, a lot of stuff to talk about.

Thanks for joining us today.

LUGAR: Yes, sir.

WALLACE: Appreciate it.