This is a rush transcript from "On the Record," June 18, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: At this hour, FOX News can confirm that the U.S. military is tracking by air and by sea a North Korean ship that could be carrying nuclear parts or nuclear materials. The ship left North Korea yesterday and appears to be heading towards Singapore. What should we do?

Major General Bob Scales joins us live here in Washington. I should say missile parts, not nuclear parts.


VAN SUSTEREN: I was (INAUDIBLE) What's the story?

SCALES: The story is that this is a ship, the Kang Nam, that is essentially a delivery truck for nuclear materials and missile parts and missiles that's literally delivered parts all over -- particularly over the Middle East for the North Koreans for a decade or more.

VAN SUSTEREN: So a well-known ship.

SCALES: Well-known. The intelligence services...

VAN SUSTEREN: That doesn't make it any better, but well-known.

SCALES: No. I mean, it's -- and it's tracking its way down the coast of China, headed towards Singapore, which is the port that it's recorded to visit. And it's being tracked by Navy patrol craft and shadowed by surface vessels. The whole idea is to follow it down to Singapore, stay on its tail and do what we can to get access to the ship, particularly as the ship arrives in port.

VAN SUSTEREN: But OK, so, you know, we can either North Korea and say, Can we board your ship...


VAN SUSTEREN: ... because it's a flagged -- North Korean-flagged ship. They're going to say no. Or we can go to the host port, Singapore, and ask the people in Singapore, the authorities, if we can board it there.

SCALES: That's right.

VAN SUSTEREN: And they're going to say -- if they say yes, we board it. North Korea's going to be mad as a wet hen, to put to politely.


VAN SUSTEREN: And I mean, North Korea's going to go -- they have threatened -- they said they're going to come back at us a hundred or a thousand times harder...

SCALES: Greta, if you board the ship at sea, it's an act of war. If you tail the ship into a harbor and observe it, and perhaps even quarantine it, it's not an act of war. Now the ball is in the -- is in the -- on the court of the Singaporeans, and it's up to them to decide what to do. If they turn the ship away, then it can float back to North Korea or go to another port. But the key is, keep an eye on them without having to board the ship and cause an international incident, embarrass the North Koreans and -- and -- disabuse the North Koreans of their propensity to exchange nuclear materials and weapons for money.

VAN SUSTEREN: All right, let's say Singapore says you can't board it.

SCALES: Right.

VAN SUSTEREN: So we then tail it again.

SCALES: We can tail it again...

VAN SUSTEREN: We don't know -- we don't know where this ship is headed.

SCALES: Have no idea where it's going.

VAN SUSTEREN: All right, let's say the -- where -- I mean, where do you think is -- what could be the expected next port?

SCALES: Could be Yemen. It could be -- it could be Pakistan.

VAN SUSTEREN: So it could (INAUDIBLE) Pakistan. It could deliver technology, missile parts or some sort of -- and it could deliver something to Pakistan.

SCALES: That's right.

VAN SUSTEREN: And we could do nothing about it. We've got this U.N. resolution but which is just sort of, like, another piece of paper, almost.

SCALES: Well, the resolution has teeth. But you're right. But it...

VAN SUSTEREN: Well, wait! Not if we don't board it, it has no teeth.

SCALES: Yes, but what it does is it shines the international spotlight on this ship, and the whole world will see this ship as it enters -- as it enters a port in Pakistan, and that puts pressure on the Pakistanis to turn the ship away. The ideal solution is to have...

VAN SUSTEREN: But they're -- they're -- wait a second! This is a country that has nuclear weapons, you know, Pakistan.

SCALES: Right.

VAN SUSTEREN: And they have -- they had A.Q. Khan, who is, like, the Wal-Mart to North Korea...

SCALES: Right.

VAN SUSTEREN: ... in terms of -- in transactions. Why in the world would you think that Pakistan would suddenly say, Oh, no, we're not accepting this? You know -- you know what? We think it's wrong.

SCALES: Two reasons. First of all, the international community, even China and Russia, are getting embarrassed by the goofy behavior of -- of -- of -- of the North Koreans. Secondly, the Pakistan is are also very sensitive to that, as well. And third, you've got -- you've got the international community, the global media watching this rust bucket as it travels from port to port. The best course of action is to make that ship turn around and go back to North Korea, embarrass the North Korean regime, deny them their access to money and -- and goods.

VAN SUSTEREN: All right, so what do we get out of embarrassing them? Let's assume that that happens. Like, they're now embarrassed. It's not going to make them any happier. They were mad when we laughed at their missile in early April, didn't go into orbit...

SCALES: Right.

VAN SUSTEREN: ... but ended up in the Pacific, which -- which -- because we laughed at them then, they the did a nuclear test on May 5th. So every time we laugh at them, they...

SCALES: No. The idea is embarrass the regime, deny them access to money and -- and -- without having to push the -- this confrontation up to the brink of war. Remember, the vulnerable center of North Korea is the ruling elite and Kim Jong Il. It's not the people. One of the best ways to get to Kim Jong Il is to deny him access (INAUDIBLE).

VAN SUSTEREN: But the last time we humiliated them, they did a nuclear test.


VAN SUSTEREN: OK. Well, so we humiliate them over this boat, they do another nuclear test.

SCALES: They do another nuclear test, yes. But remember now, Greta, they're three, five, maybe even ten years away from having a real nuclear capability.

VAN SUSTEREN: All right, but they also -- but they also have a number of missiles pointing at our troops in South Korea. They can easily reach them. They can reach -- they can reach Seoul. They've got missiles that can hit, you know, Seoul easily. I mean, do we have to run the risk that we so embarrass them or humiliate that they're -- OK, they're not going to do the nuclear test. They can't do the nuclear weapon. But you know, we've made them so mad...

SCALES: Well...

VAN SUSTEREN: ... that they're going to do this.

SCALES: You hit on a good point. The tripping point is the fact that -- it's not nuclear weapons. The tripping point is that they have hundreds of long-range rockets and long-range artillery just across the border in North Korea that can rain chemical weapons and high-explosive weapons on the city of Seoul, a city of 15 million people. That's why the administration is being very careful about not pushing this to the brink of war.

VAN SUSTEREN: That's why -- that's -- I mean, that's why, you know, the sort of idea of humiliating them and laughing at them is that, you know, if you're dealing with people that -- you know, that you can do business with, that's -- you know, that's an effective means.

SCALES: Right. Right.

VAN SUSTEREN: We are not dealing with people who react in the ways that you think ordinarily...

SCALES: Precisely right.

VAN SUSTEREN: That's the -- and if they can hit Seoul...

SCALES: That's right.


SCALES: So the idea is to keep these people off guard and deny them access to money. That's the bottom line.

VAN SUSTEREN: General, thank you.

SCALES: Thank you, Greta.

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