This is a partial transcript from "Hannity & Colmes," March 29, 2007, that has been edited for clarity.

ALAN COLMES, CO-HOST: Tonight it is now day number seven in the Iran hostage crisis, and the situation is just getting worse tonight. Iranian television aired more video today, this time of the actual capture of the British sailors and marines while they continue to maintain that they crossed into Iranian waters.

At the same time, the Iranians have apparently stepped back from the offer to release the one female hostage, 26-year-old Faye Turney, and instead released another letter she supposedly wrote today, this one to the British House of Commons. In that letter, Turney calls for the withdrawal of British troops from Iraq. But from London to Washington tonight, the legitimacy of the letter is not being taken at face value. Iran continues to insist the British invaded their waters, but London has released GP data and this map that seemed to indicate otherwise — or GPS data, that should be — showing the location of their personnel just inside Iraqi territorial waters.

The British took their case to the United Nations Security Council today. And late this afternoon, the international body expressed their, quote, "grave concern" at the capture of the British sailors and marines and called for their release. But observers say this might only antagonize the mullahs, who see the U.N. as a puppet of the British and the U.S. Tony Blair says Iran has miscalculated and refuses to back down. And so do the Iranians — is there any way that this crisis can end without some sort of military confrontation?

Joining us once again tonight is the host of our very own "War Stories," Colonel Oliver North, and retired Colonel David Roeder, who was one of the Americans held hostage in the U.S. Embassy in Tehran in 1979.

Ollie, we hear that things are getting worse. Then, we hear they're getting a little better, then we hear they're getting worse. And then we hear — one report says the foreign minister, Manouchehr Mottaki, saying that, if Britain can show that this is a mistake, this can be resolved. So what truly is going on here?

OLLIE NORTH, HOST OF "WAR STORIES": Well, as Colonel Roeder can tell you, the Iranians lie a lot, and so I wouldn't believe a thing that the Iranians are saying, unless these hostages are on an airplane headed back home.

One of the things that we've learned, Alan, is that, 10 days ago, in the Iranian Revolutionary Guard Corps publication, Reza Faqir, who is probably a pseudonym for an author who writes in it regular — Zubi Sadek is the name of the publication — threatened that they could take British and American hostages anytime they wanted and, quote, "feed them to our fighting cocks." This all is in response to the Iranians being emboldened by actions of the U.S. Congress and Tony Blair's suggestion that they're going to pull out in the not too distant future from Iraq. The Shatt al-Arab follows — this whole incident follows a meeting with the United States and Iranians in Iraq, so you obviously can't believe that the Iranians simply want to sit down and talk to people.

I think what you're seeing is internal politics in Tehran being played out on the stage, just as they're being played out here. This is done for internal political consumption. The IRGC is dealing with a government that is now feeling the heat from sanctions that have been imposed and three very high-level defection that have come to the West exposing a lot of their secrets — Alan?

COLMES: Hey, David, when we hear that a letter was written, and she makes conciliatory — we're talking about the female hostage who makes conciliatory comments about Iran, you've been through this. What kind of pressure is brought to bear on a hostage to write a letter like that and say those kinds of words?

DAVID ROEDER, FORMER HOSTAGE IN IRAN: Well, as David Jacobson said last night on your show, who knows who was behind the scenes with a gun to one of the other sailors or royal marines? Obviously, the young lady is scared, and that's understandable. As a matter of fact, this morning on E.D. Hill's show, one of our colleagues was asked about that, and he said that she was scared. And I certainly agree with that. What I don't agree with and would like to correct it, particularly for Ollie's sake, is that he went on and said we had the same thing happen with our young Marine enlisted men. That is absolutely not true. So I just wanted to get that clear. But she's under a lot of pressure. This is deja vu all over again, as Yogi said. I think leaving the folks with blindfolds, the nice little communal meal. What they don't tell you is, after the cameras go off, all the food disappears.

COLMES: So, Ollie, what is the way out of this? We keep hearing, as we've said, some conflicting reports of how close they are to possibly settling it. Is there a peaceful way out anytime soon?

NORTH: Well, certainly. And there are a lot of things that the British can do to bring pressure to bear on the Iranians, so it does not have to end up in, you know, military action. Let me just make sure that David understands what I was talking about last night, when I made the observation that letters were drafted for people to write. And as you know, they were drafted; they just weren't sent by those U.S. Marines out there.

Here's what the British can do. They can start expelling diplomats right away. They can shut down the trade missions. They can bar visits and stop granting visas, which means no new Persian carpets for the foreign ministry, but who cares? Most Iranians going to Europe on legitimate or black market business go through Frankfurt. If London gets Berlin's cooperation, it could put a real damper on Pasdaran, meaning IRGC, finances. And finally, Iran imports about 40 percent of their gasoline. If you get cooperation from Bahrain and the gulf emirates to stop refining Iranian gasoline, you can shut the country down.

SEAN HANNITY, CO-HOST: Hey, Colonel North, Sean Hannity here. Look, these are acts of war. For example, they've been supplying the insurgency in Iraq with their weaponry killing 175 U.S. soldiers that we know of. They capture these hostages. They're threatening to try these hostages. They're parading these hostages around, and they're forcing these hostages to write these letters admitting that they were on Iranian soil and Iranian waters, territorial waters, et cetera, here. All acts of war. Now...

NORTH: Well, and we're not going to get any help out of the international community; the U.N. grave concern press statement this afternoon was totally meaningless.

HANNITY: Well, yes. And on top of that, too, we know that Russia probably is not going to be inclined to even help anyway, and they have a veto possibility. Now, Colonel Roeder, I want to ask you specifically here. This is not the first time you have dealt with Ahmadinejad. You were one of the hostages. You were held against your will for a long period of time, but you believe Ahmadinejad, the president of Iran, was one of your interrogators back then.

ROEDER: Not the interrogator, but present at several of my interrogations. I was one of the six that identified him when he was announced as the president of Iran. He appeared about the fourth interrogation that I had. And I know, 99.9 percent sure, that this is the same guy. And the reason for that, Sean, is that this man is what I call a blinker. He blinks his eyes more often than an average human being does. And everybody changes in 25, 26 years, but that's something you can't change. He's the same guy.

HANNITY: Colonel North, what can we learn from the example with President Reagan? President Reagan didn't bother negotiating when they were dropping these land minds in the Persian Gulf in '87 and in '88. He didn't bow at the altar of the U.N. He went in there, and he started sinking navy ships of Iranians, and it worked.

NORTH: And even more important, Ronald Reagan's rhetoric leading up to the election in 1980 is what brought David home. I mean, the reality was the Iranians realized that inaugural day that Ronald Reagan was now president. Jimmy Carter no longer was. The problem is, this president has been severely weakened by what the Congress has been doing since they got elected in November. And the Iranians are doing this, again, for internal political purposes. David is absolutely right. Ahmadinejad was one of the people who planned the whole operation at the American embassy back in 1979. And so these guys look at this president as weak. And, unfortunately, our media and our Congress have made him appear so.

HANNITY: They've emboldened our enemies. David, let me ask you this question. What's going through the minds of these hostages right now? What are they going through? I know we're in day seven here. They don't know how long this is going to last. They just know what they're being forced to do.

ROEDER: And we don't know whether they're being interrogated and to what extent. I agree with what Ollie just said, but I think, unfortunately, that we have to take some of the responsibility for what's happening now. Once we were released on President Reagan's inauguration day, as he mentioned, from that point on, for almost 25 years, the U.S. government basically ignored Iran. They got away with what they did to us, and they've never paid a price, not a cent for it. The U.S. State Department and Justice Department defended Iran against the former hostages in U.S. federal courts. So it worked once; why not try it again?

COLMES: All right, David, Ollie, we'll be right back.


HANNITY: We continue now with the host of "War Stories," Colonel Oliver North, and former Iranian hostage David Roeder is with us. Colonel North, you know, we've got to worry. There's been the report — we discussed this a little bit last night — that, while these Brits were being taken hostage, the commander of the ship calls the defense ministry, tells them what's happening, is told to stand down and not fire. You know, we were talking at length about how the enemy has been emboldened and how weak we are being perceived here. It was Great Britain who's going through the same thing, with the antiwar appeasement left in that country. Is this setting the stage for these hostilities?

NORTH: Well, certainly, because this is not a rational government. Unlike dealing with Moscow or Beijing during the Cold War, Khamenei and Ahmadinejad and all of the other characters are not rational actors. This is an outlaw regime that has enormous domestic conflict going on inside Iraq. The sanctions are beginning to hurt. Two U.S. carrier battle groups are operating in the Persian Gulf. There have been three major defections from the IRGC. And you've got an internal political struggle going on inside Tehran. So it's very difficult, given what little we know — and David is absolutely correct about what he said just before the break. We know very little about what's going on inside the country, because our human intelligence has been so bad. Now, these three defections have helped. But the reality is, we know very little about what's happening there.

HANNITY: And David's right on that point. And, David, you're also right on the point that Iran never paid the price here. Try and bring us inside. You were held for 444 days. Do you lose hope? Do you begin to doubt? Do you suspect you're never going to make it home again? You know, how does this alter your life? I know we're supposed to forgive. I'm a Christian. I don't know if I ever could. Have you?

ROEDER: I have forgiven some people; I have not forgiven some others. I think the key in my case was the military background and survival training, which included interrogation training. So, instead of sitting in the corner wondering how I got there and whose fault it was, I instituted a resistance plan right from the start. In other words, as Ollie will understand, I wasn't going to make it any easier for them to make life miserable for me.

HANNITY: Tell us a little bit about that plan, and more specifically, were there days of doubt? I mean, there had to be days where you'd break down a little bit, and weaken a little bit, and think of your family, and wonder if you'll ever get home.

ROEDER: There were two low spots, Sean. One was when we learned that the rescue attempt had failed and eight Americans had died. The other was earlier on, when I was threatened because I was not being cooperative, that they would kidnap my handicapped and legally blind son and send his fingers and toes to my wife unless I cooperated. Those are the kind of threats that you get from those kind of people. They lie. They're degenerates. The only advice that I can really give to the British is: Don't ever get themselves involved in an agreement like the Algiers' accord, which got us released, $7.9 billion dollars, and a threat up until the very last minute that if we — if the U.S. government didn't pay that ransom — and that's what it was — that the hostages were going to pay.

COLMES: Ollie, we all acknowledge this is not a rational regime. You don't feel you can reason with them, and yet you want to attribute a rational reason to blame the Democrats in Congress and the anti-war left for them doing what they're doing. But isn't it — go ahead.

NORTH: Alan, all I'm doing is reporting what's on their Web sites. These are their words.

COLMES: So now you believe them?

NORTH: Well, I'll tell you what. They've been remarkably accurate about predicting what they're going to do. They told us years ago they were going to build nuclear weapons. We did nothing to stop them. They've told us that they're going to start capturing Americans and British, and, by golly, they've now done it.

COLMES: So you don't believe them...

NORTH: It's time to pay attention — look at it, you've got to understand. I would recommend that several of those Web sites to you. I'll communicate them to you separately. But David knows these people are remarkably accurate when they're delivering threats against the West, the things that they would like to do.

COLMES: But the reason they're delivering the threats — you want to attribute it to the left and to Democrats. The fact is, we went into Iraq. We destabilized Iraq. That helped Iran, because we empowered the Shia majority.

NORTH: Alan, Alan...

COLMES: Doesn't that have something to do with the way they're behaving now?

NORTH: Alan, I would point out to you that Jimmy Carter led this country down a path of appeasement, and we ended up with 444 days of a hostage crisis because of it. Ronald Reagan came in and said there's not going to be any appeasement. And in fact, as David knows, much of the debt that they said that they had incurred, the ransom, was never paid. In fact, one of the issues has been David has deserved, as all of those hostages have been, as has been David Jacobsen and the rest of those that I went for, those people deserve to have a settlement from the government of Iran that caused their pain and suffering, and they've never paid a penny of it.

HANNITY: All right, Colonel, thanks for being with us. And, Colonel Roeder, thank you for being with us. We're glad you're here. Thank you for being onboard. Thanks for your insight.

ROEDER: Can I tell you one more thing, Sean?

HANNITY: Yes, sir.

ROEDER: I give you three hours a day, every day, and now you want some more.

HANNITY: That's all I ask. You know, you're a great — and let me say this, Colonel Roeder. You're a great American, my friend. Thank you.

NORTH: He is indeed.

ROEDER: As are all of you.

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