With Fox News' Greta Van Susteren

2:00 p.m. EST

MS. VAN SUSTEREN: Nice to see you, sir. I want to start with Iran. Is there any possibility or probability that Iran has a secret enrichment plan?

DEPUTY SECRETARY ARMITAGE: Oh, I think there is. We've had some suspicions. I note that thus far they haven't lived up to their obligations as expressed to the IAEA, which I think will fuel those suspicions. So we've got an IAEA Board meeting next week and we'll see what the organization has to say about the performance of the Iranians.

MS. VAN SUSTEREN: It's reported that Iran has a centrifuge design that is consistent with one that might have come out of the black market in Pakistan. Is that what you think is sort of the -- the black market technology has come from Pakistan to Iran?

DEPUTY SECRETARY ARMITAGE: Certainly, Iran, Libya and North Korea have benefited from the A.Q. Khan network, which came out of Pakistan. I'm one of those who thinks the breakdown of this network in large measure is going to impede the ability of nations to father nuclear programs.

MS. VAN SUSTEREN: You mentioned A.Q. Khan fathered the nuclear program in Pakistan. From what has been told, this has been going on with him for a number of years, he's been running this black market. Why are we just learning about it now?

DEPUTY SECRETARY ARMITAGE: I think we've been following this for some time. I can't speak for our predecessors. I can speak for this Administration, and from early on in the Administration we were discussing A.Q. Khan and his colleagues. We were putting all the threads together and working with others, including Pakistan, to bring a halt to this and we're pleased with what's happened.

MS. VAN SUSTEREN: Did President Musharraf look the other way, I guess, with A.Q. Khan and sort of ignore it for a number of years?

DEPUTY SECRETARY ARMITAGE: I don't believe so. It seems to me he was pretty unwitting of this, and he developed suspicions, and the more we talked to him and others, I think, the more the suspicions took -- became crystallized. And we're delighted with the actions he's taken.

MS. VAN SUSTEREN: And you're happy that President Musharraf has pardoned A.Q. Khan?

DEPUTY SECRETARY ARMITAGE: Oh, I think I'd put it a little differently. I think I'd say that he's given a conditional one, and that the conditions of the pardon are quite strict, and they include continuing cooperation with the investigations. And at any time, as I understand it, if the investigation cooperation stops, the pardon stops.

MS. VAN SUSTEREN: How extensive do you think A.Q. Khan's black market for nuclear weapon technology was?

DEPUTY SECRETARY ARMITAGE: Well, I've just named three countries that I think have benefited, and if three did benefit, then others could have. We know of a number of discussions with a number of countries and I won't go into which ones they were. We don't think that they involved transfers of technology yet, but certainly there were active discussions.

MS. VAN SUSTEREN: Those countries, Iran, Libya and North Korea and Pakistan, all seem rather dangerous to me. Do you consider them dangerous to the United States?

DEPUTY SECRETARY ARMITAGE: Well, I'd consider them dangerous in terms of, one, becoming states which will own not only weapons of mass destruction but try to develop delivery systems for them; two, they're dangerous in that they do have ties with terrorist groups and if they can transfer this material to terrorist groups, we'd be in a different ballgame.

I don't consider Pakistan the same league, and I think the Government of Pakistan has cut down and aided the international community enormously by bringing A.Q. Khan to a full halt.

MS. VAN SUSTEREN: With the benefit of 20/20 hindsight, are Libya and Iran more dangerous than Iraq was for us?

DEPUTY SECRETARY ARMITAGE: I think Libya proved to be much less dangerous because they listened to the many lessons, among them, Iraq. Iran, on the long run, may be quite dangerous in that they appear intent on developing longer and longer-range missiles. And I would note that no matter how Iran develops their relationships with other countries is, there's one thing the moderates seem to -- and extremists in Iran seem to agree on, and that is that Israel has no right to exist, and until that's moderated, we consider Iran quite a dangerous place.

MS. VAN SUSTEREN: All right. Russia, apparently, at least is has been reported, is striking some deal with Iran to provide them, at least, nuclear support.

DEPUTY SECRETARY ARMITAGE: Nuclear fuel, I think I read.

MS. VAN SUSTEREN: Nuclear fuel. Right. First of all, is that something that we in the United States want, and number two, what can we do about it?

DEPUTY SECRETARY ARMITAGE: Not very enthusiastic about it, but I think we should let the Russian Federation make up their own mind about Iran after the IAEA Board meeting next week, and we'll see what the IAEA has to say about Iran's cooperation and we'll see how that affects the Russian Federation's judgment.

MS. VAN SUSTEREN: All right, Iran says that it wants nuclear technology for conventional use, for power. They're sitting on an awful lot of oil. Is there any sort of -- do you credit that at all? I mean, is there any -- any sort of likelihood that that's what they really want it for?

DEPUTY SECRETARY ARMITAGE: I think there's a possibility that that's what it's for, but until they completely clean and live up to all their responsibilities, to include ratifying the additional protocol to which they've -- which they've signed, I think we have to err on the side of suspicion.

MS. VAN SUSTEREN: All right. You served in Iran --

DEPUTY SECRETARY ARMITAGE: Yeah.

MS. VAN SUSTEREN: -- in the 1970's. Is Iran getting more dangerous or are they getting friendlier to us since, at least in '79 when they had the great -- the revolution?

DEPUTY SECRETARY ARMITAGE: I think Iran's a very complicated place. You know, the Persians in Iran are just slightly in the majority in their own country. Azeris are the second largest ethnic group there. They've got a very well developed sense of their place in history. I served during the time of Shah, which many people considered the heyday of U.S.-Iranian relations, but I found them at the time of the Shah to be hegemonistic and I don't think that's changed.

MS. VAN SUSTEREN: Well, in terms of trying to develop a nuclear weapons technology, I mean, it seems to me that it certainly is not on an upswing for us but rather, something that should be particularly disturbing.

DEPUTY SECRETARY ARMITAGE: The President spoke to this matter yesterday in his National Defense University speech on proliferation. It's quite disturbing to us. That's why we use all the tools available to try to thwart and try to limit these type developments.

MS. VAN SUSTEREN: What's the domestic situation for President Musharraf now? He's had a couple of assassination attempts on him. Is it getting better or more dangerous for him?

DEPUTY SECRETARY ARMITAGE: I think it's quite dangerous to him. He has, I think, managed the question of A.Q. Khan with a great deal of skill and yet firmness. I think the extremists who are trying to kill him will still be out there, but I think the population, by and large, if the opinion polls are to be believed, are more for him than against him.

MS. VAN SUSTEREN: Now an update on Afghanistan. How are we doing in Afghanistan?

DEPUTY SECRETARY ARMITAGE: This is kind of like the little engine that could. There's more success there than people credit it. It's a dangerous spot, to be sure. There are -- particularly the south and east, but President Karzai is moving ahead with the national elections in June. A lot of roads and clinics have been built and I think the international community is getting more enthusiastic about the ability to have a success in Afghanistan. And we need more.

MS. VAN SUSTEREN: Iraq. Now we obviously have a military operation going on in there. What's the diplomatic role in Iraq today?

DEPUTY SECRETARY ARMITAGE: Well, we ourselves in the Department of State are preparing to take over on 1 July from Ambassador Bremer and the CPA. Right now, Mr. Brahimi, the representative of the UN Secretary General, has been having discussions in Iraq to include with Grand Ayatollah al-Sistani to try to find a comfortable way forward so that we can have transparent and representative government in Iraq.

MS. VAN SUSTEREN: Is Iraq getting better or worse? I know that today there was an attack at least near General Abizaid, and so that always, you know, of course, alarms us.

DEPUTY SECRETARY ARMITAGE: Well, I'd say if you were one of those unfortunate Iraqi policemen, the recruits at the army recruiting station who were victims of bombs this week, you'd say it was getting worse. But I think most observers who come in and out of Iraq from time to time, to include our own members of Congress, will find there's an awful lot of good going on in Iraq and that, at least as I understand it, the number of people who still want to sign up to be police recruits and army recruits is increasing. And I think that's a sign that Iraqis have some hope that they'll have a viable future.

MS. VAN SUSTEREN: How does the -- right now, does the State Department work with the Defense Department? I mean, the State Department's diplomacy, the Defense Department is just military and there's always, historically, been somewhat of a natural tension. How are you working now with the Pentagon?

DEPUTY SECRETARY ARMITAGE: Well, first of all, you ought to be very happy as a citizen that there's a natural tension. It's not unlike, I think, to some extent, a mom and a dad. If the parents are always agreeing a course of action for a child, the child would probably be a basket case. We need to have all issues threshed out, as Dan Dwight would say, and so too, the President needs these issues threshed out between the State and Defense Department.

We're doing fine right now, I think to the extent that, about a year, a year and a half ago, there was a lot of commenting on who was winning the tennis matches in Washington. You don't see that anymore because the enormity of the task at hand is such that we're all working together.

MS. VAN SUSTEREN: Well, it's a natural checks and balances thing. Is it -- it's a healthy thing, right?

DEPUTY SECRETARY ARMITAGE: I think it's healthy until it becomes non-functioning. And the President's not going to let it be non-functioning. And he gets all the issues exposed to it. He's a strong guy. He'll make his decision based on the strong points of view presented to him.

MS. VAN SUSTEREN: How are we doing at convincing the North Koreans to dismantle their program?

DEPUTY SECRETARY ARMITAGE: Well, the last time we spoke, I had said that I thought we'd have a six-party talk; and now, on the 25th and 26th of February, we're going to have them, a second round of six-party talks. And that's a lot better than fighting.

MS. VAN SUSTEREN: What actually happens at these talks? I mean, tell me what you expect.

DEPUTY SECRETARY ARMITAGE: We all get to -- there's six parties that express their own points of view. Five of the parties have pretty similar points of view and put them forward in a little different ways, but trying to bring the North Koreans around to the idea that having nuclear weapons is actually a bigger threat to them, and then getting rid of them and to moving forward expeditiously into life in the international community.

It's a matter of letting everyone, to include the North Koreans, put their points of view on the table. They do have, from their point of view, 50-odd years of suspicion about the United States. I think we certainly have 50-odd years of suspicion of them, so do the South Koreans. And this is all a part of a process to bleed that off and get them to get down to brass tacks.

MS. VAN SUSTEREN: How do we actually alleviate their suspicion of us?

DEPUTY SECRETARY ARMITAGE: I think by talking to them straightforwardly in front of others where we can be judged by, sort of, the international community on the, not only the strength of our comments, but the manner in which we put forth a sincerity, I think, and I think having it done with an international audience of five other countries is a very good thing that inspires some confidence on behalf of the North Koreans.

MS. VAN SUSTEREN: Well, what happened in the last -- since about 1994 -- when North Korea -- we thought we had sort of a deal with them and apparently they were uninspired by the deal and cheated?

DEPUTY SECRETARY ARMITAGE: Well, what happened is they cheated. They stopped the "no-nuclear" program and they went on to develop a clandestine nuclear program at the same time we were following through and the Japanese and the Republic of Korea diplomats on our obligations to them.

So having had that cheating in the past, I was beginning, actually, to be even more suspicious.

MS. VAN SUSTEREN: You mentioned clandestine program. North Korea has one, and you know, there's suspicion Iran has one. Who else might have -- who are you suspicious of that might have one?

DEPUTY SECRETARY ARMITAGE: Well, we have had questions about WMD programs in Syria. We've voiced those. From time to time, we've had suspicions that others in the Arab world were looking to develop programs but I have no specific information on that.

MS. VAN SUSTEREN: And our relationship with Syria is now, what?

DEPUTY SECRETARY ARMITAGE: Well, I think it's a little troubled. Recently, we put a new ambassador into Syria and she was, in a very quick fashion, received by President Assad, who received her credentials, and we took that as a good sign.

But we haven't had much meaningful work on -- progress on things that really matter, such as stopping support for Hezbollah and Hamas and Islamic Jihad organization, though we've had some cooperation on the war with Iraq, but from our point of view it's still insufficient.

Secretary Powell traveled there last May and laid it out for President Assad that the way to have a better future, and President Assad, thus far hasn't chosen to follow the advice of the Secretary. I hope he will.

MS. VAN SUSTEREN: Why won't he? I mean, why not cooperate?

DEPUTY SECRETARY ARMITAGE: I don't know. There are -- you hear all kinds of things: that he's surrounded by people who are opposed to cooperation or that he's still a young man, not fully as confident as his father. Or maybe he just doesn't want to. He could be a victim of some misinformation. I read the most baffling thing in the paper this morning that Saddam Hussein never believed that we'd actually invade. And how could he not believe it? Everyone in the whole world knew it was coming. And yet he apparently was able to fool himself, and perhaps President Assad is fooling himself.

MS. VAN SUSTEREN: Is our PR in that region improving? I know that we have -- that we're supposed to launch a TV station this -- I think it's this weekend --

DEPUTY SECRETARY ARMITAGE: Right.

MS. VAN SUSTEREN: -- to try to communicate in the area. But how we are doing, sort of, getting across our message to the Arab world?

DEPUTY SECRETARY ARMITAGE: We've got a long way to go. We've asked Margaret Tutwiler to come back from being Ambassador to Morocco to run our public diplomacy. She's acknowledged that we've got a long way to go but we think we're making some very modest progress, but it's not enough yet and it's not fast enough.

MS. VAN SUSTEREN: What would you like to see being done? What would be your wish list? How would you --

DEPUTY SECRETARY ARMITAGE: Well, I want a lot more exchanges and things of that nature. I think they work wonderfully. I'd also like to see a lot more training in the host countries in the English language, if people want them. I think they do -- the English language and things of that nature.

Some of the changes we've put into effect in our programs in the Middle East are ones that, by definition will take a long time to be realized, and these are the ones that bring forth more transparency into government and more education for women. And these are not things that change a society overnight but they surely will change a society over time.

MS. VAN SUSTEREN: You have a wish list on how to improve intelligence gathering?

DEPUTY SECRETARY ARMITAGE: If I were the Director of Central Intelligence, I'd give it to you.

MS. VAN SUSTEREN: All right.

DEPUTY SECRETARY ARMITAGE: I've got all I can do to handle this job.

MS. VAN SUSTEREN: All right. Senator Biden had some things to say about you today. He said to Secretary Powell that you are a straight-talker, etcetera. What's your thought about Senator Biden's complimentary remarks?

DEPUTY SECRETARY ARMITAGE: Well, he also went on to say that his compliments would probably get me fired. I'm honored to be in his thoughts and I'll continue to work with all the members of the Senate, just as I have for the past three years.

MS. VAN SUSTEREN: And I understand Secretary Powell said that you would be insufferable, referring to the compliments of Senator Biden.

DEPUTY SECRETARY ARMITAGE: Actually, he said I'd be even more insufferable than I already am. So as soon as he got in his car, and he stepped in his car, I was on the phone saying, "You want insufferable? You can have insufferable."

(Laughter.)

MS. VAN SUSTEREN: Thank you, sir.

DEPUTY SECRETARY ARMITAGE: Thank you.