So we are having diplomatic successes, but these are very tough problems. They've been growing for a while. They were ignored for a long time--that these countries were cheating on their obligations. And this president's very tough non-proliferation and counterproliferation programs, as well as the fact that we've been fortunate to wrap up the A.Q. Khan network, the Pakistani nuclear scientist who was selling components to rogue states, gives us a chance of getting a handle on these programs.

MR. RUSSERT: Bottom line: Will we allow Iran to develop a nuclear bomb?

DR. RICE: I don't think the international community believes that it can afford to allow Iran to develop a nuclear weapon.

MR. RUSSERT: So we will not let it happen?

DR. RICE: I think you cannot allow the Iranians to develop a nuclear weapon. The international community has got to find a way to come together and to make certain that that does not happen.

MR. RUSSERT: Let me turn to the war in Iraq. These are the latest casualty numbers, U.S. troops: killed, 924; wounded-injured, 6,087. The primary rationale given for the war was to dismantle and disarm Saddam Hussein's weapons of mass destruction. In light that we have not found those weapons of mass destruction, can you justify the cost of human life that we have suffered in Iraq?

DR. RICE: The primary reason for going to war against Iraq was that Saddam Hussein was a threat. He was a--he represented a regime against which we had gone to war in 1991, which we had gone to war again in 1998 because we were concerned about his having thrown out weapons inspectors and that he was continuing his weapons-of-mass-destruction programs. He was an avowed enemy of the United States who had attacked his neighbors, who had used weapons of mass destruction. He was tying down our forces in Saudi Arabia. He was a threat to change in the Middle East, which is at the core of how we change the security environment in which terrorism is taking place. And he was a friend of terrorists.

Now, it is true that stockpiles have not been found in Iraq, but I think we've gone all the way over to the other side in assuming somehow that Saddam Hussein was not a weapons-of-mass-destruction threat. Of course he was. And people who--and intelligence services around the world, both the Clinton administration and the Bush administration, the United Nations inspectors, knew that this was somebody who had the knowledge, the capability, the intent to make weapons of mass destruction, had used them before, refused to disclose them, was, of course, continuing to defy the international community.

Sooner or later, Tim, the international community had to mean what it said about Saddam Hussein. When it said that it could no longer tolerate his defiance and he had one last chance to disarm or be disarmed, he chose defiance. And the president fulfilled the obligation that he had given to the international community when he went to the U.N. in September of 2002 and said, "If he will not comply with his obligations, then he has to go."

MR. RUSSERT: But having not found the kind of stockpiles of chemical and biological and potential nuclear that we thought he had, you have no second thoughts that the war was not necessary?

DR. RICE: Absolutely not. Because Saddam Hussein had been a threat for 12 years, ever since he invaded Kuwait and set the Middle East on a course of instability. Somebody had to take care of Saddam Hussein and set the Middle East on a different course. This president is not confused about this point. He knows that this was the right thing to do. And now we have an opportunity--and let me just say, Tim, every sacrifice of an American soldier is felt deeply by us all, because this is a great sacrifice for the men and women in uniform, for their families and for the American people. But nothing of value is ever won without sacrifice. On September the 11th, we were brutally attacked by people who had an ideology of hatred so great that they, with a few people, threatened to try and bring down our way of life.

MR. RUSSERT: But there's no linkage between September 11 and Iraq?

DR. RICE: There is no linkage between the plot of September 11 and Saddam Hussein's regime that we see. But I think it would be wrong to say that there is no linkage between what happened to us on September 11 and the instability and lack of hope and lack of freedom in the Middle East. And Saddam Hussein's regime was one of the prime elements in that kind of Middle East. Now, we have a chance to build a different kind of Middle East.

MR. RUSSERT: You talked about September 11. On Thursday, John Kerry was asked what he would have done differently on September 11, and this is what Senator Kerry had to say:

(Videotape, Thursday):

SEN. JOHN KERRY, (D-MA): First of all, had I been reading to children and had my top aide whispered in my ear, "America is under attack," I would have told those kids very politely and nicely that the president of the United States had something that he needed to attend to. And I would have attended to it.

(End videotape)

MR. RUSSERT: Your reaction?

DR. RICE: My reaction is that anyone who thinks they would have known exactly what they would have done under those circumstances--I just can't imagine that you would say something like that. The president of the United States was confronted with one of the greatest tragedies that had befallen the United States in our 200-plus years of history. He decided on the spot that he was not going to alarm the third-graders. He was not going to alarm the American people. He was going to proceed in a calm way. That was the right thing to do.

And anyone who has any doubt about that just needs to look at what he did in the hours subsequent to that: when he made a statement to the American people that still stands that evening as the core of how we think about fighting terrorism; when he went to ground zero on that Friday and talked to the relief workers and told them that everybody would hear America for what had happened to us; and when he has led since then a war on terrorism that has been effective, that is making America safer--not yet safe, but safer; when he has liberated two countries; and when we are on a course to finally deal with the threat of terrorism, which had been ignored for so long in the past.

I really--I don't think that talking about that seven minutes, although the president handled that seven minutes correctly, in my view, has anything to do with how one would carry forward the war on terrorism.

MR. RUSSERT: Let me talk about the September 11 commission report and this is how it was reported upon on Wednesday in the papers. "But while Mr. Bush agreed to create such a [national intelligence director] post"--which had been recommended by the commission--"he rejected the commission's recommendation that the national intelligence director have direct control over the intelligence community's $40 billion annual budget and veto power over the people named to head intelligence agencies. Under the White House proposal, the intelligence director would have far more limited budgetary and personnel authority."

Now, the chairman of this commission report, Tom Kean, had this to say. "We believe that the position has to have budget authority and appointive authority. ... Otherwise it's not going to be much better than what we have now." Tom Kean's a Republican. Arlen Specter, Republican from Pennsylvania, "If you don't have the authority to pick the people, isn't a national director just a shell game and a shell operation?"

DR. RICE: Well, first of all, Tim, I think there has been some misconception of what the president is talking about here. He took the time to read the report. He took the time to discuss it with his advisers, and he believes that there should be a national intelligence director. The only thing that he's taken off the table that this person shouldn't be in the White House and shouldn't be a part of the Cabinet because he...

MR. RUSSERT: So he would allow budget authority and a point of authority?

DR. RICE: The president is determined to give this person effective authority to present for the process of budget through OMB, a unified, integrated intelligence budget. Nothing is off the table. We're discussing the mechanisms by which that might be done, and I think you will see that the president most certainly believes that this person needs to have more effective authority than the director of Central Intelligence now has.

So we're working through the issues. You obviously want to do this in a way that is deliberative and sound, because these are major reforms. You have a war ongoing. You want to make sure that there is fundamental support to the war fighter in intelligence, that there's fundamental support to homeland security. But the president fully understands that budget authority is an important element of this, and he's looking at how those mechanisms would work.

MR. RUSSERT: So complete control over budget and personnel is on the table?

DR. RICE: Well, of course, everything is on the table. But I think the president will look for a way that gives this person effective control.

MR. RUSSERT: What does that mean?

DR. RICE: The person needs the ability to make sure that the president's priorities in intelligence are being represented in the budget. What that means for how that relates to the intelligence budget which is currently broken up into several budgets I think we'll have to look at the mechanisms for doing that. But the president has said and said clearly that he wants a unified and integrated approach to the national intelligence program.

MR. RUSSERT: The right to hire and fire?

DR. RICE: We'll look at what that would mean. You obviously don't want to disrupt the lines of authority for people who have to run these agencies at Defense or run these agencies at the Homeland Security Department, but the president is looking at what the best mechanisms are to give this person the effective authority he needs to integrate the intelligence programs.

MR. RUSSERT: Last week, the Homeland Security director, Tom Ridge, had a news conference. On Thursday, The New York Times wrote this editorial. "This week [Homeland Security officials] were specific: the five financial institutions were in danger of being bombed in the 'near term.' The terror alert was raised to orange for those sites in New York, Washington and New Jersey. But things quickly lapsed into confusion. For three days, officials at news conferences and background briefings said their concerns were based on new information, then old information, then back to new information. Many people were scared out of their wits on Monday, cynical on Tuesday and befuddled by [Wednesday ]."

DR. RICE: Well, the government has a duty to warn when we find information that is more specific than the sort of general warnings that have been out there. The president's made that commitment. Tom Ridge has made that commitment. All of us have. And starting on a week ago Friday and going through the weekend, we began to get important intelligence from some of the people that were being rounded up in these raids in Pakistan, from raids that were done that produced physical evidence, all in the context of a pre-election threat that we had talked about before. And so while it was not imminent, it did give a time frame that suggested some urgency.

Among the things that were found were casing reports on several financial targets in New York City and Washington, D.C., and the decision was made that you had no choice but to warn people that their buildings had been cased. Now, yes, some of the reports came from 2000, 2001. Perhaps some of them had been updated. But whether they had or not, we know that al-Qaeda meticulously plans over a number of years. The casings for the East Africa Embassy bombings which were done in 1998 had been done five years before.

And so this information in the context of reporting about a pre-election threat in the context of what we were hearing from people who were being picked up in raids, in the context of known terrorists who were thought to be plotting against the United States made it imperative that we warn that this was going on.

The good thing, Tim, is that we don't have a situation like we had before 9/11 where the information was not being shared. It was being shared--this was in some way textbook for the sharing of information that was coming in from the field, coming in from liaison with Pakistan. Three years ago, Pakistan was not a fighter in the war on terrorism. And here you have them able to take down terrorists and to provide information which then could be shared in the government, could then be shared with state and local officials who were on some of the conference calls and you could have an effective response to these terror threats.

MR. RUSSERT: Howard Dean, who ran for president, as you well know, had some very pointed comments last Sunday. He said the following: "I'm concerned that every time something happens that's not good for President Bush, he plays this trump card, which is terrorism. His whole campaign is based on the notion that, 'I can keep you safe, therefore at times of difficulty for America, stick with me,' and then out comes Tom Ridge. It's just impossible to know how much of this is real and how much of this is politics, and I suspect there's some of both in it."

DR. RICE: Well, I wish that Governor Dean had been able to sit with us on Saturday and Sunday of last weekend and go through these terror threats. America was attacked on September 11, and everything that we've been doing since then, whether with it is with new allies in places like Pakistan to fight the war on terrorism, whether it is trying to enable state and local governments to really use information more effectively, whether it is sharing intelligence, it's all to try and prevent another attack. Now, we know we have an uphill fight, because the terrorists only have to be right once. We have to be right 100 percent of the time. But the idea that you would somehow play politics with the security of the American people, that you would not go out and warn if you have casing reports on buildings that are highly specific in New York City, are you really supposed to not tell the people of New York City or the people of Citigroup or the people of the New York Stock Exchange, their security experts, that we found casing reports that are highly specific about vulnerabilities? I don't even understand what Governor Dean is talking about.

MR. RUSSERT: But Democrats point out that Rom Ridge said he would divorce himself from politics, but in his presentation he lavished praise on President Bush and the war on terror.

DR. RICE: Well, he works for the president of the United States, and the president of the United States deserves credit for having us in a position where we now actually are getting--because we're on the offense in our war on terrorism--where we're actually getting information that can help us on the defense.

MR. RUSSERT: But wouldn't it be better if he refrained from campaign pitches?

DR. RICE: I don't think this was a campaign pitch. Tom Ridge is out there to tell the American people that there is a vulnerability, that there is a threat, and that they need to be vigilant and to give to local and state officials the way to be quite specific in their responses.

But, Tim, we're either going to fight this war all out and on the offense or we're not. We're either going to recognize that we can't sit back and just defend the country, that we've got to go out, that we have to find new allies in the war on terrorism as we have, for instance, Pakistan, that in the war that we're fighting in places like Afghanistan and Iraq, we are changing the circumstances out of which these terrorists came. And what the people of those countries need to know is that we're in this for the long term. We're not going to set artificial deadlines for American forces. We're going to be there for the brave Afghans and Iraqis who are taking risks for democracy, and that we are going to finish this job. This president is in no way confused about what our obligations are.

MR. RUSSERT: And for the long term, if President Bush is re-elected, will you stay in your current position?

DR. RICE: Tim, I'm trying to get through the next few weeks. I think we'll cross those bridges when we come to them.

MR. RUSSERT: Dr. Rice, we thank you for joining us and sharing your views.

DR. RICE: Thank you.