O'REILLY: You believe we're in the middle of a shooting war on terror?
CLINTON: Yes, absolutely. You and I are from New York, we lived through the horrors of 9/11. Every single day I or my office is doing something to help somebody who is suffering, who was a victim.
O'REILLY: So you're buying into the war on terror. Now, I believe Iran is the most dangerous country vis-?-vis the United States. Do you believe that?
CLINTON: I think it is, in combination with the other threats we face. Because clearly, if Iran were to ever obtain a nuclear weapon, that would be unbelievably bad for us and the world, and I'm going to do everything I can to prevent that from ever happening.
O'REILLY: If you start pulling US troops out of Iraq, that's good for Iran. Iran wants to dominate Iraq for a number of reasons. How are you going to stop it?
CLINTON: First of all, I believe that our military has fulfilled all their military missions. They got rid of Saddam Hussein, they gave the Iraqis free and fair elections, they gave the Iraqi government the space and time to make the decisions that only the Iraqis can make for themselves. There is no military solution to what we face in Iraq ... I have said that I will begin withdrawing our troops, because I believe two things: number one, because there is no military solution, we have to emphasize the political and the diplomatic. And because, as we withdraw them, that's the only way to focus the Iraqi government on what they must do for themselves. I think it's somewhat open to debate as to whether Iran really wants to se us withdraw, and here's why. They have been an equal opportunity supporter of the militias, of the insurgents, of anybody who would pick up arms against the United States. They would have to begin to pick sides. That will, I believe, catalyze Iraq nationalism. There will be a lot of conflict between the Iranians and the Iraqis moving forward if the United States is on the sidelines instead of in the middle.

O'REILLY: OK, let's, let's go to Afghanistan. Do you know where the primary haven is for the Taliban right now?
CLINTON: It's in Pakistan. It's along the border, and there are a couple of different places, it's not just one place.
O'REILLY: It's in Quetta. That's where it is.
CLINTON: But that's not the only place.
O'REILLY: No, but it's command and control. The Pakistani government, even under Musharraf, knew that. Quetta is not up in the mountains. You can drive right through it tomorrow. The Pakistani government allows the Taliban openly to operate out of Quetta, to go across the border to kill our guys and other NATO forces, and to come back. How are you going to solve it?
CLINTON: If you had more troops committed, we could prevent the infiltration and their being able to carry out their missions inside Afghanistan. We could make a stronger case to the newly elected government in Pakistan that their livelihood and lives depend upon us working together to take out al Qaeda and the Taliban. We didn't make that argument. We supported Musharraf through thick and through thin. I've met with Musharraf over and over again, he said all the right things, you just never got the follow through. We should have been supporting the pro-Democracy movement. They just had an election where the Islamist party lost. Why? Because the Pakistani people do not want to have this creeping terrorism and extremism.

O'REILLY: I believe the Bush administration has done a good job in protecting Americans after 9/11. I believe they've hurt al Qaeda, and I'm not saying this from any partisan point of view. I believe they got them on the run, they protected us, and they've done so in a very aggressive manner: Guantanamo, water boarding three times, and other things. If we get an al Qaeda big shot, I'll dunk him in the water if our intelligence agency believes there's an imminent attack. You won't dunk him in the water. I will. Why am I wrong?
CLINTON: I do not think the United States government sanctioning torture is in our best interests. What we've got to do is make sure we protect and defend the United States of America, which I am one-hundred percent committed to. I have been strongly in favor of an aggressive effort against al Qaeda. In fact, I think we should have been more aggressive, we shouldn't have taken our eyes off the ball in Afghanistan. I will do whatever it takes to go after them. I do not think torture works.
O'REILLY: What I want is the President of the United States, whether it's you, McCain, or Obama, to have the ability to use water boarding as an executive privilege when you feel American lives are in danger. And I think most Americans agree with me.
CLINTON: Well, Bill, of the three of us who are running for President, each of us has decided we will not condone and sanction torture. Obviously Senator McCain knows a whole lot more about this than both of us put together. I know from first hand discussions with people who have responsibilities for extracting information and getting good intelligence out of our enemies that torture doesn't work. They'll say anything. I think we can be strong and we can be incredibly effective by following our laws, by setting the example, and by going after these guys where they are like in Afghanistan.

O'REILLY: All right, last question. Sanctuary cities are angering many Americans, San Francisco, Los Angeles, and other cities won't cooperate with federal immigration law. Are you going to crack down on those sanctuary cities?
CLINTON: I'm not, because of the reason a lot of those folks do it. In New York, why do police officers turn a blind eye? They want them to report crimes. Sometimes you have two competing values. You want to report crime, you want to protect people.
O'REILLY: But why have the federal law? Abolish it.
CLINTON: We've got to fix it, it's broken. I share the frustration. I have voted for tougher border controls, I voted to put more money, more personnel, even a physical barrier where appropriate. I am one hundred percent in favor of tightening our borders, of enforcing the laws against employers, of going after the kind of abuses that we see in the job market. We have a broken immigration system.
O'REILLY: You have anarchy when you have the son of a sergeant serving in Iraq, 18-years old, shot dead by a criminal illegal alien who was let out of an LA jail because Los Angeles won't obey the federal law.
CLINTON: Well, that's a problem. If they pick somebody up, if they've committed a crime in this country or elsewhere, they should be deported, no questions asked, or tried for the crime. But we do not want to have what some people are advocating, which is that literally you have deputized law enforcement officials going door to door. I don't think Americans would put up with that for a nanosecond.
O'REILLY: Americans are reasonable. They don't like sanctuary cities, they want the laws enforced.
CLINTON: And they don't like demagogues either. They want this to be solved, not be turned into some political football, and that's what I will do. You got to say what we're going to do with the twelve to fourteen million people who are here. You've got to evaluate them, you've got to register them. We can reach a fair and balanced approach toward this to protect people from those kinds of violent acts.
O'REILLY: This is the most fun interview you've ever done, I know it is.
CLINTON: I could have said it's the most fun interview you've ever done.
O'REILLY: No, I interviewed Cher one time and that was just a blast.
CLINTON: That must have been really fun, yeah.
O'REILLY: Senator, thanks for taking the time, we really appreciate it.
CLINTON: Thanks a lot, Bill.