This is a partial transcript from "Hannity & Colmes," Jan. 12, 2005, that has been edited for clarity.

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SEAN HANNITY, CO-HOST: Joining us now, Secretary of State Colin Powell.

Mr. Secretary it is always good to see you. You just toured the region with the tsunami disaster was. Tell us what you saw.

COLIN POWELL, U.S. SECRETARY OF STATE: I've never seen anything like it before, Sean. Let me start with that comment. Especially in Banda Aceh, in Indonesia. It is as if a little nuclear weapon went off in just simply leveled half of a town. Scrapped clean houses, mosques, schools, bridges, cars, boats, vegetation. Everything just gone.

Most importantly, people gone. Washed out of their homes, taken out to sea, drowned and then put back up on the beach; terrible scene of devastation.

Not as bad in Sri Lanka or in Phuket, Thailand, but nevertheless, throughout that part of the world, this really is a tragedy and where 150,000 people lost their lives.

HANNITY: It's very disturbing. The images are disturbing. The fact that early on people tried to politicize this. I was very glad to see you were out there and you put an end to that very quickly. You made, personally, the first call the day that this happened and offered whatever assistance would be necessary. So, explain the process for people that perhaps are under some illusion that we didn't react quickly enough, with enough.

POWELL: On Sunday morning [December 26, 2004] when I got word that this had happened our task forces had already started to operate, here in the State Department, as well as in the U.S. Agency for International Development. We responded immediately. And by Sunday afternoon when it became clear that this was something very significant, I got on the telephone and called all of the affected countries, through their foreign ministers. And I reached them all, either Sunday night or Monday morning, recognizing there is a 12-hour time difference.

What I said to each and every one of them, we're sorry about what happened, extended condolences. Don't know how serious this is, but let us know what you need. Our ambassadors have already given money to your people. Let me know what you need. Let our ambassadors know and we're going to respond.

All of them said, thanks very much. Casualties look like their in the hundreds or may a thousand or two. But by Monday we could see it was growing. So, we gave $4 million in response to a $7 million request for assistance from the International Federation of the Red Cross. So, we took up over 50 percent of what was asked for initially. And then we threw in another $10 million, and then we threw another $15 million, a total of $15 million -- and then another $20 million. And we said, all along, that we would add whatever funds were necessary. We weren't capping our contributions.

Nevertheless, people started characterizing that as stingy. And the fact of the matter is, it was not. We were there first. And even though people had been using this as a source of controversy, the nations in the region --I can tell you this, because I've been there-- they are enormously grateful for our willingness to step forward, and frankly, lead the effort, the international effort, until the international community caught up.

So, people might comment about it here at home, but 70 percent of the American people, in accordance with a recent Gallup poll, think that we have done the right thing and that we have done enough. And every country I spoke to are very happy that America stood tall and are helping in this time of need.

HANNITY: You characterize it as an investment, Mr. Secretary, in national security. And I thought about it in terms of the Muslim world, and in the context that perhaps there will be a lot of good will that comes toward the United States in this way. But it makes me wonder, on the other hand, the number one murder of Muslims in the world was Saddam Hussein. We removed him from power, and yet we didn't get credit on that front. Why would you be optimistic on this front?

POWELL: This is totally a different case. Muslims were in need. They needed food, they needed water, they needed health care. And there were American sailors, flying in, in helicopters. And they weren't pointing guns at anybody. They weren't shooting anybody. They were reaching out and helping people and that is an entirely different image.

And what I said in all of my interviews in the last 10 days is we're doing this, not because they are Muslims, but because they are humans and because we're Americans. And Americans are a compassionate people and we reach out. In this case we are reaching out to Muslims.

We have helped Muslims in a number of ways over the last 10 or 15 years. Whether it was liberating Kuwait after they were invaded by a Muslim nation, Saddam Hussein's Iraq, in 1990. Or Muslims in Kosovo, who were being persecuted, or Muslims in Afghanistan, who were being dominated by the terrorists led by Usama bin Laden and with the help of the Taliban. The United States rescued all of these people.


POWELL: We don't get credit for it. It is a burden that we bear. We just have to keep working. Ultimately, when people see that Afghanistan is becoming a democracy, and they have an elected government that they elected; that was not put in place by a terrorist organization.


POWELL: And when they see the same thing happen in Iraq, I think these attitudes will change.

HANNITY: Mr. Secretary, the president has invited the new Palestinian president, Abbas, to the White House. Something that he did not extend, that similar invitation to Yasser Arafat. My question is, do you think there is a newfound optimism by the administration, as it relates to the peace process? And how concerned should we be about Abbas' association with some of the terror groups, more specifically during the election?

POWELL: We know Mr. Abbas very well. We got to know him really well last year when he was prime minister. And President Bush stood up along side of him, in the region and blessed the road map with him and with Prime Minister Sharon, of Israel. So we know him well.

Now, he did not achieve success as a prime minister then, because Arafat was in the way. Arafat is gone. Mr. Abbas put himself before the Palestinian people and now he is their new president. Yes, he said some things during the campaign that were of concern to me, that were disturbing to me. And we'll raise them directly with Mr. Abbas.

The campaign is now over. And things get said in the height of a campaign as one is trying to garner support. But I believe he understands that he now has to take a strong position, an open, vocal, clear position against terrorism. But more than just take a position, he has to fight against those forces within the Palestinian community that still thinks there is a role for terrorism. And if he does that, then the United States will be able to support him. And he'll find that Israel can be a partner for peace with him as well.

I am please that he and Prime Minister Sharon are already in touch with each other and they are planning to meet in the near future.

HANNITY: Moving on to the pending elections in Iraq, Mr. Secretary, Brent Scowcroft, with whom you served in the first Bush administration, said he "feared that the election would further alienate Iraq's Sunni Muslim population. It has a great potential for deepening the conflict." And talked about this could be the beginning of a civil war at the present time. Your reaction to his comments?

POWELL: Well, first I have great respect for my dear friend and colleague Brent Scowcroft, but regardless of his point of view, we have to go forward and have this election. [The] Iraqi people deserve to be heard and let them decide how they wish to be governed.

I don't believe it will necessarily result in the kind of outcome that Mr. Scowcroft reflected upon and was musing about. I think that it could just as easily be the case, and I'm confident will be the case, that with this kind of positive result, the people of Iraq selecting their own leaders. That gives new energy to the people of Iraq, to help them put down this insurgency, along with the military forces of the coalition, and Iraq's own armed forces.

So, I think we have to have this election. And election could be a catalyzing event, to bring the Iraqi people to the realization that the enemies of Iraq are not the coalition forces that are helping. The enemies of Iraq are these terrorists and former regime elements. And so I hope that will be the outcome and not the outcome that Mr. Scowcroft was reflecting about.

HANNITY: I know, Mr. Secretary, I speak for a lot of Americans, in as much as I have lost a lot of confidence in the United Nations, and particularly the Oil-for-Food scandal. Are you satisfied the investigation is being handled properly and do you still have confidence -- and to what degree, if you do -- in Kofi Annan, as a leader there?

POWELL: Well, first of all, I have a lot of confidence in Paul Volcker. I frankly participated in pushing him forward as a candidate for this investigation. He's a man of great skill and competence and credibility. So, I'd like to wait and see for his completed work on this matter. But what we have heard, so far, is that there were serious problems inside the U.N. on the management of this. We're not sure if there were criminal problems, but there were certainly management problems.

And the secretary-general will have to be accountable for those management problems. But I think Kofi Annan is a very distinguished gentleman. He has served the cause of humanity well over the years. I worked very closely with him. And I'm going to continue to work closely with him as long as he is the secretary-general.

The responsibility does not rest entirely on Kofi Annan. It also rests on the membership. And especially on the Security Council and we are a member of the Security Council. It is the Security Council that had the responsibility for the day-to-day management of this program.

So, I want to wait and see the results of the Volcker investigation, as well as the investigations that are being done by the United States Congress, before we make any judgments about the overall management of this by the United Nations, or how it might effect Kofi Annan.

HANNITY: Now, on a more personal note. You have often told me that you serve at the pleasure of the president. You have decided you are not going to stay for a second term. And I was watching you, Mr. Secretary, with the president, yesterday. And it appears to me that you have a great fondness for him, that you guys had a great working relationship together, in spite of, perhaps, some intramural squabbles you may have had with Defense or elsewhere.

But your relationship with the president, how would you describe it? What would you tell the American people about your relationship? And more importantly, what is next, what is the next chapter in Colin Powell's future?

POWELL: Let me answer the second part first.

I don't know. I have been getting some very interesting business offers that I expect I'll go back and make some speeches. And do some other things that will keep me somewhat in the public eye. But I haven't settled on a full agenda of activity yet.

With respect to my relationship with the president. It is a good relationship. It has been very strong all along. And the president, I think, appreciated the fact that I would always tell him what I thought. I would give him the benefit of my experience. And sometimes it was in agreement with all of my colleagues, and that was more often than not, and sometimes it was not.

But that is what I'm supposed to do. I'm not paid to be in consensus. I'm paid to give my best judgment. And that is what I always did. And I think the president always appreciated that.

And, frankly, when I look at what we have accomplished over the last four years; whether it has to do with doubling the amount of development assistance that we are giving to the world; what we're doing with HIV/AIDS; the Sudan peace agreement, that I witnessed the other day in Nairobi; the disarming of Libya; the way we brought attention on nuclear proliferation Iran and Iraq; to free trade agreements we have entered into; the good relations we have with China and with Russia; the progress we are now making in the Middle East.

I'm pretty comfortable with the record of this administration, in the first four years, in foreign policy. And I'm pleased to have been able to play a role in that record. And I think it is a role I play because of the very strong relationship, both professional and personal, relationship that I have with President Bush. I've known him and members of the family for a long time and sometimes I think I'm a part of that family. And I think I always will be.

HANNITY: Well, Mr. Secretary, you can put all your diplomacy aside and maybe you can fill in for me here and join that vigorous debate. But anyway, Mr. Secretary, you have accomplished a lot. It has always been good to have the pleasure of you being on the show.

Thank you for being with us. We hope to talk a lot in the future. And thanks for all you do. Thank you.

POWELL: Thanks very much, Sean.

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