This is a rush transcript from "Hannity," December 19, 2011. This copy may not be in its final form and may be updated.

FRED THOMPSON, GUEST HOST: The Pentagon is keeping a close eye on the Korean Peninsula tonight following the death of long time dictator Kim Jong Il. North Korea test fired at least two short range ballistic missiles off the country's east coast today, elevating concerns that his passing could trigger unusual military activity in the region.

Earlier this afternoon, Secretary of State Hillary Clinton reacted to the news.


HILLARY CLINTON, SECRETARY OF STATE: We both share a common interest in a peaceful and stable transition in North Korea, as well as ensuring regional peace and stability. We reiterate our hope for improved relations with the people of North Korea and remain deeply concerned about their well-being.


THOMPSON: Joining me now with the very latest on this developing situation is the chair of the Keep America Safe, former deputy assistant Secretary of State Liz Cheney. Liz, thank you so much for being with us this evening.

LIZ CHENEY, FORMER DEPUTY ASSISTANT SECRETARY OF STATE: Good to be with you, Senator. Thanks for having me.

THOMPSON: My pleasure. Fear of instability, what is that all about? Obviously, a transition is taking place. Is it the fact that we don't know really who is going to wind up in charge causing people to go on alert and meetings with the Japanese and the South Koreans in all that, in the area?

CHENEY: Yes, I mean, anytime that you have a leadership shift like the one that we are experiencing now in North Korea, there are concerns about what that will mean. I think in the case of North Korea in fact, it may well be that we don't see much of a difference at all. You've got the brother-in-law of Kim Jong Il, who has long been ahead of the military in North Korea, whose headed the nuclear program, who is likely to continue in that position. The problem though is, people shouldn't take false comfort from the possibility that the status quo will continue, because in fact, the status quo is not stable. North Korea is clearly one of the world's worst proliferators of nuclear weapons. A country that we know for example was building a nuclear facility in the Syrian Desert. A country that we know from news reports seems to have sold nuclear technology to the Pakistanis for example. So, it's a very real concern that remains, how do you go about ensuring that the nuclear technology that the North Koreans have acquired is not further proliferated to dangerous regimes.

THOMPSON: Well, going back to the stability issue just a moment, I think some people are concerned that the military is just not going to let this young kid -- what, 26 years old -- you know, step up. He hasn't had very long in getting ready for this. Hardly anybody knew him. I guess, it's fair to say, isn't it that the military is going to call the shots and the question is, whether or not he is just going to be a figurehead in the military, will indeed call the shots. And if that's the case, doesn't that complicate our situation? We always wondered what Kim was up to and what his plans were. Now, we would have, you know, many other players in the military that we would have to identify and get their predilections and histories and so forth. It seems like the situation may become more complex and complicated.

CHENEY: Well, you know, it's a very, very opaque place. But there is some sense that both the sister of Kim Jong Il and her husband have long been serving in leadership posts, particularly her husband. And I think that, people think that's likely to continue. Nobody knows for sure what role this 27-year-old will play. But I think at the end of the day, you know, I get nervous when for example when I hear analysts over the course of the day today since we got this news saying, well, now is the time for increased engagement. Now is the time for us to open up. Now is the time for us to somehow, you know, reach out a hand of engagement in the idea that we will have some kind of new opening here. I think it's in fact just the opposite. I think we are likely to see the continued threat that North Korea poses. And I would feel more comfortable frankly if I saw this administration putting more focus and more emphasis on the problem of nuclear proliferation.

I would also like to see our own candidates talking about it more in the Republican primary. It's one of the most significant threats we face. And I think that the opaque nature of this regime where you got a clear history here where they pocket concessions from the west. They pocket benefits from the west. And then continue to, you know, break whatever agreements they've made with us, whether it's in the six-party talks or during the Clinton administration and the framework agreement, and march forward in pursuing their nuclear program, both through the plutonium program they've got. And also, we know now through a uranium enrichment program.


CHENEY: So, it's a very dangerous regime and I think it will clearly continue to be so.

THOMPSON: Yes. Well, two or three million people starved to death there. They're putting all their efforts in a place that will get our attention. Probably the only country in the history of modern world anyway that has broken every agreement that it's ever made with anybody, and last but not the least of course, the United States of America. Getting back what you just mentioned. I was wondering a little bit when Hillary Clinton said, took this occasion and say, we hope for improved relations. Like this is some way --


THOMPSON: And isn't it true that just a month or two ago, some of our emissaries are meeting with some of their people and exploring the possibilities of reopening talks maybe leading to the six-party talks again? Or things like, is there any indication that the Koreans have changed their mind with or without Kim Jong Il?

CHENEY: No, not at all. And it really is, if you go back and you look at the history. You can see that in a sense, you know, the North Koreans have been trained because whether it's the Clinton administration or frankly even in the Bush administration, when in the aftermath of the discovery that they had been building a nuclear reactor in the Syrian Desert, our State Department removed them from the terrorism list in exchange for verbal promises about steps they were supposed to take. I don't know very many people who were surprised when it, you know, became clear that they broken those promises, that they in fact, you know, we now know had approximately 2,000 centrifuges spinning at their Pyongyang nuclear site.

And so, I do worry that what happens is the west is so anxious to try to open relations, we end up giving them benefits, which just frankly buys them more time and more space to develop their program while their people starve. I think now is the moment when we very clearly need to send a tough message to China. We need to make clear that stopping the North Korean nuclear problem is the top priority for us and that if the Chinese wants to be responsible members of the world community, they need to get on board. They certainly have not in the past helped us in the way they ought to help us. I think it's also clear that you know, we need leadership in this country that will bring back American prestige around the world, bring back American credibility, put us back in a position where, you know, people don't view our words as empty threats as I'm afraid they do too often do now. I think that, you know, we need to make clear that we'll stand with our friends and that our enemies will pay a price and that we won't stand for nuclear proliferation from the North Koreans.

THOMPSON: Great points, Liz Cheney. Liz, thank you so much for being with us.

CHENEY: Thank you.

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