This is a rush transcript from "Special Report," November 9, 2011. This copy may not be in its final form and may be updated.


MAHMOUD AHMADINEJAD (VIA TRANSLATOR): The Iranian nation is a wise nation and won't make two bombs against your 20,000 bombs. We will build something that you can't respond to, and that is morality, ethics, believing in god, and justice. This nation won't retreat one iota from the path it is pursuing.

MARK TONER, STATE DEPARTMENT SPOKESMAN: We're looking at a range of options with the overall intent of being ways that we can put additional pressure on Iran. So again, to make it clear to the Iranian government that it needs to come clean.


BRET BAIER, ANCHOR: There is no sense judging about the speech of Iran's president Mahmoud Ahmadinejad, that Iran is stepping back at all from its nuclear ambitions. An IAEA report out this week details what they may be, that they may be moving closer to a nuclear weapon.

Mark Katharine, what about this standoff and what the administration is saying and doing about it?

MARY KATHARINE HAM, DAILY CALLER: Well the information -- more important than the information in the report is who the report came from, IAEA, from the U.N. It's the sort of thing that Obama should love and embrace. It should give him the credence -- or the cred to lead from behind. It's a global consensus on this now. And yet, what concerns me is he seems just as hesitant to toughen up as he has in the past even though he has got this. Which would seem a plausible way for him to get tougher. Then you've got Afghanistan, and Iraq drawing down troops which in the region just sends a bad message. Israel is not just afraid of morality and ethics from Iran. That is not what the danger is.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: What is important in the IAEA report is the weaponization part. To build a nuke you have to do three things, you have to enrich, that's number one. You have to have a delivery system, which the Iranians are working on, on missiles. And the third is, you have to weaponize. You have to find a way to make the bomb adaptable onto all of the missiles so it can explode. And that's where the IAEA has important information of stuff that can only be explained if Iran is trying to weaponize. And it only would be weaponizing if it's actually in pursuit of a nuke.

And that's where I think it's extremely important, because we had our own intelligence report in 2007, which said erroneously, and it was obvious at the time it was erroneous, that Iran had stopped its weaponization. Well, now we have from a U.N. source, of all places, a report that says the exact opposite. And that is alarming.

What is most alarming is the tepid response of the State Department spokesman you just showed, he said we have to make it clear. Iran has to come clean as if Iran is a regular nation, it isn't a rogue state. That somehow it's gonna admit that, oh we lied all these years and we want to come clean. Obviously, it requires pressure.

Obama had imagined that he could sweet talk the mullahs into giving up nukes, that's why he said nothing in the anti-government revolution in 2009. And then he imagined he could reset relations with Russia, give up our missile defenses in return and get cooperation on Iran and he got nothing. So here he is with no weapons, with no program. And all he can do is have his spokesman say we urge Iran to come clean.

BAIER: What we don't know Juan, is what is happening covertly. We know that there have been three assassinations of Iranian scientists; we know that they have had to deal with a major computer virus that set back enrichment processes there in computers at those plants. So I guess that's the part of the equation that we don't know about the administration.

JUAN WILLIAMS, SENIOR EDITOR, THE HILL: That's true, covert action. But the other elements here are these. You have a situation where there is not a global consensus, that China and Russia, in fact, tried to block this report from being released by United Nations.They didn't want it out. Why didn't they want it out? The Obama administration has imposed more sanctions on Iran than anybody else.

The question is, how effective are those sanctions, when in fact, you don't have cooperation from the Russias and the Chinas who think that they have business interests there that will allow them to continue to do business with the Iranians? And I would agree, the Iranians are a rogue state.

Remember, we are in a moment when the Iranians have been tied to that attempt to assassinate a Saudi ambassador here in Washington, and they are denying even that. The question then is if they are going to destabilize that entire Middle East region, what support can we possibly generate from the likes of Saudi Arabia, Turkey and others so that Israel doesn't get isolated as they may take independent action?

BAIER: Quickly, about the Saudi plot. The thought was here in the U.S. from some that in and of itself would somehow convince Russia and China to get on board in tougher action against Iran. The actions about this report by Russia and China don't suggest that that's happening at all.

KRAUTHAMMER: Russia's had a long interest in supporting Iran against us, in making it an irritant and perhaps a potential ally in the future. We have not changed its perception of that one iota. China as well has relations, energy relations with Iran. The diplomacy of this administration on this has been an abject and complete failure, and that is why all that we can do is to rally the western allies, it looks as if even that the administration is not able to do.

BAIER: That is it for the panel. Stay tuned for a "Grapevine" follow-up.

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