This is a rush transcript from "Hannity," September 27, 2012. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: The White House is engulfed in a scandal as there's shocking new evidence proving that you, the American people, were lied to by the president, by the secretary of state, and other senior members of the Obama administration.

Now, Fox News can in fact confirm that within 24 hours of the assault on the Benghazi Consulate, the Obama administration in fact knew with certainty that this was indeed a terrorist attack.

Now, two sources also tell Fox that U.S. intelligence officials were even aware that the assault was coordinated by Al Qaeda-affiliated operatives. Again, all of this was verified on September the 12th, less than a day after ambassador Stevens, two Navy SEALs and one other American were assassinated.

But rather than tell the truth and acknowledge that the Al Qaeda link existed and admit that the president's triumphant killing of bin Laden was by no means marking the end of international terrorism, members of the administration chose to lie and initiate what appears to be a widespread cover-up about what they knew and when they knew it.

Now it's obvious they want us to all to think that Al Qaeda is no longer a clear threat to America. And so, what do they do? They blame the so-called spontaneous event on a YouTube trailer.

Now, let's take a look back at the campaign of misinformation that was waged in all the days following this attack.


HILLARY CLINTON, SECRETARY OF STATE, SEPT. 14: We've seen rage and violence directed at American embassies over an awful Internet video.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY, SEPT. 14: This is under investigation.

The unrest around the region has been in response to this video.

We were not aware of any actionable intelligence indicating that an attack on the U.S. mission in Benghazi was planned or imminent.

SUSAN RICE, U.S. AMBASSADOR TO THE U.N., SEPT. 16, "FACE THE NATION"/CBS: It began spontaneously in Benghazi.

RICE, "FOX NEWS SUNDAY," SEPT: 16: It was a spontaneous reaction to what had just transpired in Cairo as a consequence of the video.


HANNITY: Now, that was their lie. That was their story for an entire week.

Also tonight, we have learned that the filmmaker has reportedly been arrested, but for what? According to reports, authorities are claiming that he violated his parole for quote, "Accessing the Internet without proper authorization." Now, that sounds pretty fishy to me.

Yet the first tick-up in their narrative came when a non-political intelligence appointee actually had courage, and he said this.


MATTHEW OLSEN, DIRECTOR, NATIONAL COUNTERTERRORISM CENTER, SEPT. 19: I would say, yes, they were killed in the course of a terrorist attack on our embassy.


HANNITY: Now, again, that was the first time that the words "terrorist attack" were actually uttered by a government official, and it came a week after they had already confirmed Al Qaeda's involvement. And it was that statement that boxed the White House into a bit of a corner.

Now, the next day, Jay Carney reluctantly had to say this.


CARNEY: It is, I think self-evident that what happened in Benghazi was a terrorist attack.


HANNITY: OK. So, mark it down, September the 20th was the day that everyone got on the same page and finally acknowledged what we all knew to be true, that this was not about a YouTube video or movie trailer.

Well, not exactly. The confusion, the lies from the White House, they continued.


PRESIDENT BARACK OBAMA, SEPT. 20, UNIVISION: We don't know yet. And so, we're going to continue to investigate this.

CLINTON, SEPT. 21: What happened in Benghazi was a terrorist attack.

JOY BEHAR, CO-HOST, "THE VIEW"/ABC, SEPT. 25: Then I heard Hillary Clinton say that it was an act of terrorism. Is it? What do you say?

OBAMA: Well, we're still doing an investigation.

OBAMA: It was a crude and disgusting video, sparked outrage throughout the Muslim world.

LEON PANETTA, SECRETARY OF DEFENSE: It was a terrorist attack.


HANNITY: Now, when we first began our investigation right here on this program into the so-called mixed messages, I said they were the result of one of three things -- stupidity, a cover-up or just bad intelligence. Well, now that Fox News has in fact confirmed that the intelligence community, they got it right on day one of this investigation. Well, that leaves two other options. That's either stupidity or a cover-up. Neither of which should be acceptable to the American people. They deserve the truth. And so do the families of these four dead Americans.

Now, joining me in studio with reaction to today's developments, the former mayor of the city of New York, New York City Mayor Rudy Giuliani. How are you sir? Good to see you.


HANNITY: All right. So, this is what we now know. Our intelligence knew they did their job, they even pinpointed where it came from. Makes sense, anniversary of 9/11. The film came out in July. None of this made sense. They had rocket-propelled grenades and mortars. Even the president of Libya said so. Why would this administration cover up for the death of Americans?

GIULIANI: Well, I think it's because they have this narrative that they defeated Al Qaeda, that Al Qaeda was no longer a really big threat. They never say the words "Islamic fundamentalist terrorism." I mean, they want to wish it away. The president was moving on to Asia. He was going to declare this a great victory for himself. And unfortunately, this terrible act of terror intervened in their very convenient narrative. And what they chose to do is -- this isn't stupidity, Sean. I said this, you know, a while back and I got heavily attacked for it. I spent a lot of time investigating cover-ups and conspiracies. This is a cover-up.


GIULIANI: It's a deliberate attempt to cover up the truth from an administration that claimed they wanted to be the most transparent in history. And it's the worst kind of cover-up, a cover-up that involves our national security, a cover-up that involves the slaughter of four Americans. And maybe if they had been straightforward about this from the very beginning, maybe they could have quelled some of these demonstrations that took place afterwards that also did a tremendous amount of damage.

HANNITY: You know, what? They're not only covering up for themselves and their incompetence, but the first of all, the first question is, why didn't they have beefed up security on the anniversary of 9/11? But they're also -- they're covering up for Al Qaeda. And especially, now knowing that our intelligence knew within 24 hours. Why would they cover up for them?

GIULIANI: Well, it's really hard to take the victory lap they would taking about bin Laden, if something like that happens, or something like this happens, and you have this kind of destruction that's done, or you have the number of protests that you have. And I think it interferes with their political narrative. Look, right now we don't have a president. We have a candidate.


GIULIANI: We don't have a president. I mean, it's really a shame. The world is in turmoil. The Middle East is erupting. Every night I watch -- what I watch on television, I see the failure of Obama's policies in the Middle East, his naive approach to Islamic extremist terrorism that many of us have been warning about for a very, very long time.

So, this terrible act of terror, of murder, happened, and the reality is it destroys their entire narrative.

HANNITY: And it needs to be gotten to the bottom of, was this -- well, what did the president know? When did he know it? You know, let me give you an example, because I thought -- I was actually embarrassed with the president's speech at the United Nations. It was embarrassing to this country. I mean, all he did was go back to condemning, condemning, condemning a movie trailer. That is the most amateurish --

GIULIANI: It's pathetic.

HANNITY: Absolutely. It's pathetic. And here's Benjamin Netanyahu today with more clarity, certainty and understanding of what it is at stake in the world. I want to show you the two of them side by side. Because this is interesting. Watch this.


ISRAELI PRIME MINISTER BENJAMIN NETANYAHU, SEPT. 27: I think the relevant question is this, it's not whether their fanaticism will be defeated, it's how many lives will be lost before it's defeated.

OBAMA, SEPT. 25: I've made it clear that the United States government had nothing to do with this video. And I believe its message must be rejected by all who respect our common humanity.

NETANYAHU: When it comes to the survival of my country, it's not only my right to speak, it's my duty to speak.

OBAMA: True democracy, real freedom, is hard work. Those in power have to resist the temptation to crack down on dissidents.

NETANYAHU: There's only one way to peacefully prevent Iran from getting atomic bombs. And that's by placing a clear red line on Iran's nuclear weapons program.

OBAMA: America wants to resolve this issue through diplomacy, and we believe that there's still time and space to do so.

NETANYAHU: A red line should be drawn right here before -- before Iran completes the second stage of nuclear enrichment necessary to make a bomb.


HANNITY: Here's the United States president pandering to radical Islamists, saying, please like us, please, we're not responsible. And then there's the Prime Minister of Israel telling them, if you continue, you will be defeated. That's America's role. That's -- an American president should be doing that.

GIULIANI: Sean, put politics aside. It's absolutely frightening that the president of the United States still thinks there's room for diplomacy. Where is he living? On Mars? They don't want to negotiate with him. This has been four years of this man pathetically trying to negotiate with Ahmadinejad. He was going to negotiate without preconditions. Ahmadinejad wouldn't even negotiate with him without preconditions. He wants to negotiate with the Ayatollah. He's looking for somebody to negotiate with.

I have a message to the president. Mr. President, they don't want to negotiate with you. They want to build an atomic weapon.

HANNITY: And then first, it's Israel, and then --

GIULIANI: Wake up!

HANNITY: Well, this president -- who is he pandering to by saying, please, we're really not responsible? Because we always make a distinction. Muslims, the radical Islamists. He's not pandering to, you know, moderate Muslims. He's pandering to radical Islamists.

GIULIANI: He's also losing a wonderful opportunity to explain America to the rest of the world, that unfortunately from the point of view to a lot of these people, they don't understand. The reality is we have free speech in this country. The government has no responsibility for what some person is going to say about Jesus, is going say about Mary or is going to say about Muhammad.

HANNITY: Well, listen to this. Because this is important. You're dovetailing right into President Morsi's comments, who is from the Muslim Brotherhood. They pushed out Mubarak, they'd kept the peace with Israel for 30 years, far from perfect, but here's the Egyptian president warning the world of the U.N., that he will not allow -- this is the guy we give $2 billion taxpayer dollars a year to Egypt -- warning, that he will not allow insults to the prophet. Watch this.


MOHAMED MORSI, EGYPTIAN PRESIDENT (via translator): The insults on the prophet of Islam Muhammad is rejected. We reject this. We cannot accept it. And we will be the opponents of those who do this. We will not allow anyone to do this by word or deed.


HANNITY: We will not allow anyone to do this by word or deed.

GIULIANI: I mean, his speech is absolutely outrageous. His demands on us when we're giving him $2 billion a year. His demands on us when this man wants one of the worst terrorists released.

HANNITY: You'd cut off funding?

GIULIANI: I would cut off -- I would cut back funding, I would make them beg for it in the future. Don't care if Russia took care of them or China. Let them took care of them. I mean, the reality is, this man wants the blind sheik released from prison. The blind sheik was behind the attack on my city in 1993.

HANNITY: 1993.

GIULIANI: The blind sheik was convicted of trying to destroy my city in 1995, '96. The blind sheik put a fatwa on one of my best friends, the brave judge put him in jail for hundred years. If this man wants the blind sheik released, President Obama can answer his question about whether Egypt is an enemy or an ally.

I mean, it's pretty clear where Egypt is going, and this is because of the unrealistic way in which he tossed Mubarak out without any thought for what is there, with objections from Saudi Arabia, objections from Qatar, objections from the Middle East. Our genius president's decided, we can get rid of Mubarak. This is tantamount to basically what Jimmy Carter did to Iran.

HANNITY: All right. Mr. Mayor, good to see you.

GIULIANI: Thank you.

HANNITY: Thank you so much for being with us.

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