ISIS: The natural evolution of a terrorist threat - and no longer 'JV' to Obama

This is a rush transcript from "On the Record," August 8, 2014. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Former U.N. Ambassador John Bolton joins us. Good evening, sir.

And ISIS is so awful that al Qaeda has thrown out ISIS because they're too extreme and too violent.

JOHN BOLTON, FORMER US AMBASSADOR TO THE U.N.: Well, I think this is a natural evolution of the terrorist threat, and belies the argument we've heard the last three or four years that the international threat of terrorism is declining. Manifestly, it's not. It's growing in ways that we just haven't been paying attention to up to and including the president's speech last night.

VAN SUSTEREN: Well, the president said, on September 6, 2012, at the DNC, about how the al Qaeda is on the path to defeat. Now, of course, this is ISIS. And then just in January he was referring to al Qaeda offshoots as J.V.

BOLTON: Look, he's still locked into it. Last night he said there's no American military solution here, and he was at pains to limit what the U.S. involvement in this current conflict is going to be. The whole point of the threat of ISIS now is that they will be able to establish their own separate state within which they can continue to metastasize as a terrorist threat to Western Europe and the United States. It's not enough to say the Iraqi government has got to take care of things because it's not just the threat to the Iraqi government. It's a threat to the Kurds, to the Sunnis. Ultimately, it's a threat to us.

VAN SUSTEREN: Is this different from Syria in the sense of how the United States responds? Obviously, the humanitarian crisis in both spots. But we were in Iraq and we weren't in Syria. Is it sort of like what Colin Powell said, we broke it?

BOLTON: I have always believed that Syria was a strategic side show. The issue in Syria was never the fight there. It was always Iran and the support of Iran for the Assad government. Iraq, if it breaks apart, gives is the possibility of setting up a separate terror state. It threatens natural allies of the United States and the Kurds, and that's why we need to intervene. You can't say that we're going to go back and forget we withdrew three years ago. That was the biggest mistake right there. You've got to --


VAN SUSTEREN: But if we would intervened in Iraq, like Senator John McCain wanted to, we might have -- I mean in Syria, we might not have is now in Iraq.

BOLTON: It's possible or ISIS might have captured the weapons from the Free Syrian Army before they captured them from the Iraqi army. They're very different circumstances in my view.

VAN SUSTEREN: President Obama -- do you think that now he sort of has a greater sense that it's not the J.V.? Because it's really a shocking statement. When he made that statement about the J.V. in January, Fallujah had fallen to ISIS at that point and we had two years of ISIS in Syria. It wasn't some big surprise. Even in January, should have been aware what ISIS was doing, and they called them J.V., or groups like theirs.

BOLTON: Yeah. I think he has ideological blinders on. He simply cannot admit that the threat of international terrorism is growing, whether it's core al Qaeda or this piece of al Qaeda. He just can't admit it because it would be a concession that his entire conduct of the war on terror, in fact, his dismissal that there is a war on terror was fundamentally wrong.

VAN SUSTEREN: Why do the limited strikes now if that's his ideology if he won't admit it.

BOLTON: Because it's so limited. What he said last night -- he could change it today, maybe he already has -- but he said last night was that the use of force would be to protect the American personnel in Erbil and to protect the distribution of humanitarian supplies. Not aid the Kurds, defeat ISIS, not enable the Sunni tribal militias to defeat ISIS, but for those two very limited objectives. If he follows what he said, the American military involvement cannot be consequential.

VAN SUSTEREN: We're going to talk about it in a minute, the issue of the dam, the Mosul Dam, which may be a far bigger problem that's associated with ISIS. But we'll get to that in a minute.

But anyway, Ambassador, thank you, sir.

BOLTON: Thank you.