This is a rush transcript from "Special Report," October 18, 2011. This copy may not be in its final form and may be updated.


MAHMOUD AHMADINEJAD, IRANIAN PRESIDENT: I think that there are some peop le in the U.S. who want this to happen, but I think there are wise people in the U.S. administration who know they shouldn't do such a thing.


BRET BAIER, ANCHOR: Iranian President Mahmoud Ahmadinejad telling Al Jazeera that he thinks the U.S. wants to go to war with Iran, but, as you heard, thinks that the economic situation is diverting the attention of the warmongers in the U.S. This is as Iran is apparently having major problems with its nuclear program, evidence perhaps that sanctions are working on that front. And it is sending mixed signals whether it will investigate the alleged plot to kill the Saudi ambassador. The foreign minister saying they would investigate, the president saying no, we're not. We're back with the panel. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: What's so interesting are these reports about how the program, the nuclear program in Iran has been so devastated by these strange occurrences. The Stuxnet virus, which I've read about is an unbelievably ingenious virus which has slowed down and destroyed a lot of equipment inside Iran. Also, the mysterious assassination of some of their nuclear scientists.

The irony here is that everybody looks at the war against terrorism as us, the big guys, the Goliath, held down with heavy weaponry, and the terrorists sort of nimble, under the radar, IEDs, suicide attacks, and so it's asymmetric. And now it's asymmetric in the other way. Iran is attempting to be a big guy with bomb and missiles. And apparently the west, I'm sure the Israelis probably other intelligence services are working under the radar, not with a bombing attack on Iran but with these stealth ways to disable and retard a program. Otherwise we would have had a crisis years ago, and yes, it looks as if every year it recedes into the future because of these events that are largely unreported or mysterious.

BAIER: This is a report from a former U.N. weapons inspector David Albright, who suggests that the centrifuges and the efforts at Natanz, of one of the nuclear facilities, are decreasing, not increasing. And one would think, Mara, this is good timing for an administration that is trying to make the case that sanctions are working and that's how they're going to combat this plot.

MARA LIASSON, NATIONAL PUBLIC RADIO: And they need more. Yes. And they need more. I mean, it's -- Ahmadinejad sounded like he almost wanted the United States to go to war. That this was almost meant as a provocation. But yes, the Obama administration should have more ammunition now for its argument that sanctions work and we need more of them.

KRAUTHAMMER: I'm not sure it's sanctions. I think it's this other stuff.

LIASSON: Well, this other stuff which is happening covertly and it's going to happen anyway.

KRAUTHAMMER: If that is what is holding them back, it's not the lack of money.

LIASSON: Right. But I still think that if he wants to get more sanctions this is another argument for that. But I agree. The stuff that is happening covertly seems to be working. And, you know, credit should go to those countries who are doing it.

BAIER: And what's to say that covert action as people like General Keane have talked about against the Quds Force could not be effective as well.

JONAH GOLDBERG, AT LARGE EDITOR, NATIONAL REVIEW ONLINE: Yeah, well look, the Washington Post story today, which is all about this nuclear program, it has a line in there from a senior White House official who says -- ya know, basically says the [INAUDIBLE] feel under siege, and that's why they are doing crazy things as trying to launch this terrorist plot on the United States. It almost makes it --

BAIER: Justified or something.

GOLDBERG: Yeah, let these poor guys, we have to back off and give them room. We're sweating them too much. It's crazy talk.

It seems to me, you have a terrorist plot to assassinate the Saudi ambassador on U.S. soil. The one thing we know from this Washington Post report is that they are still determined to have a nuclear bomb and they have enough material for one or two bombs already. It seems to me that this is not a moment to be backing off. That this is a moment not even just to be talking about sanctions but to make Iranians feel the heat from the United States even more. I'm not saying we should bomb them, but they should be scared that we might.

BAIER: In other words, don't turn the other cheek now.

KRAUTHAMMER: And if you know, what would a Kennedy, or a Nixon, or a Reagan have done? Send the carrier, send the ship. We spend $600 billion a year on swords, rattle a sword or two.

GOLDBERG: And we just announced we are going to cut Iraq troops down to 160 troops right after this Saudi thing. I mean, that seems to me a gift to the Iranians.

BAIER: Very quickly, Mara, does this administration feel under siege on the issue of Iran?

LIASSON: I don't know. I think this administration feels so under siege on the economy that Iran is way down on the list of things it feels under siege on. I actually think the administration feels it has a strong case to make on foreign policy and national security. That's why you don't hear a lot of Republicans attacking them for it.

BAIER: That is it for the panel. But stay tuned to see an interview that was not exactly eye-opening.

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