CNN Lou Dobbs Moneyline

DOBBS: We’re joined now by former CIA director, James Woolsey, who says the United States will have to maintain a military presence of a substantial degree in the Gulf region. He hasn’t put a time limit on the commitment, and he also says there’s no doubt the United States would win any war against North Korea, should that be necessary.

James Woolsey joins us now from our studios in Washington. Good to have you with us.

JAMES WOOLSEY, FORMER CIA DIRECTOR: Good to be with you.

DOBBS: Let’s start with North Korea. Secretary to State Colin Powell today said there is a proposal on the table now from the North Koreans only requiring, as he put it, something considerable. Nothing beyond that. Is it reason for a positive view of what’s happening now?

WOOLSEY: I think we have to know more to believe it’s positive. I think we can’t trust Kim Jong Il and his regime any further than we can throw them. They’ve made progress with blackmail in the past, and I think they’re still trying it. If there’s been the beginnings of the diplomatic break through, bravo, but I would say the reason would probably be, in addition to our maintaining a firm position if China has come around.

China cut off their oil for a few days a few weeks ago, and they have joined us in these multi-lateral negotiations. It’s the first positive thing the Chinese have done in some time with respect to North Korea.

If they lean on the North Koreans, this could wind down. But if they don’t, I’m suspicious that it could get out of hand.

DOBBS: As you’re pointing out, the Chinese provide half of the fuel to North Korea, half of the food supplies even though they’re insufficient for the North Koreans. No one can have any greater leverage here than China. Is it your sense, based on what you’re saying, Jim, that you believe China has decided to step forward and to deal with this issue?

WOOLSEY: Well, they did those two small — take the two small — steps, and those were positive. But they need to be really firm with the North Koreans.

For example, people talk about possible blockades. We can’t effectively operate a blockade around North Korea unless China joins it. Russia, too. But China is crucial. Otherwise, they just fly their missiles out to Pakistan or Iran they way they have in past — or the heroine.

China has — that border has to be blocked. Not just the sea.

DOBBS: Do you believe that the Bush administration is absolutely committed, if a deal can be struck, to absolutely intrusive inspections, absolute verification of whatever is agreed upon with the North Korean regime?

WOOLSEY: I don’t know. I’m sure the President and secretary of state, secretary of defense are working as hard as they can to end this peacefully, but inspections in North Korea have been pretty limited and partial and blocked in the past.

It’s not going to be easier to inspect them than it was to inspect Iraq. And particularly, if they’re not only reprocessing plutonium, which can be done at a limited number of sites. If they are enriching uranium, that could be done at a lot of different places in very small facilities. And they apparently began doing that right after they signed the agreement with the Clinton administration that they would not produce fissionable materials.

So, we have lot of steps before us before we could trust the North Koreans to obey anything that they signed on to.

DOBBS: Let’s turn to the Middle East. The announcement today that U.S. command will be moving to Qatar from Saudi Arabia. Is this the first step in what seems to be a realignment of all U.S. assets in the Middle East for a new Middle East. at least in terms of U.S. policy to the region?

WOOLSEY: I imagine it’s a very important beginning of are realignment. It may well not be total. We may maintain some skeletal bases. The manning of the base, the Prince Sultan Base in Saudi Arabia, but the heart of the matter is we don’t want to depend on the Saudis.

As it turned out this time, they permitted some transit and some steps. But I think over the long run, the other, the smaller states of the Gulf, from Oman all the way up to Kuwait, including Qatar and Bahrain, are a better bet for places that really need the United States. We need them. Their general culture, in several of the cases, guarantees a freedom of speech, permitting a role for women much, much bigger than that in Saudi Arabia.

All of these things suggest that we, I think, can get along a lot better with some numbers of U.S. troops in those states along the Gulf, rather than in Saudi Arabia.

DOBBS: In Iraq, the President is expected to, if you will, announce this week that hostilities have basically ended in Iraq. The President, the administration, seems pleased with the response of this Syrian government to this point to its requests ,or demands if you prefer, that the border be closed down, that there be some recognition of a new world. Is the same thing happening with Iran?

WOOLSEY: I don’t know, but even if the Iranian government says that they’re not doing anything, they’re lying. They’re backing these bodder (ph) brigades, irregular forces, very much like the Saddam’s Fedayeen in — that we had to fight in the closing days of the war in Iraq.

They are working through Shi’a clergy in some parts of Iraq to try to establish a theocracy like the one in Iran, and they are massively unpopular in Iran. The small number of clerics who are trying to operate this theocracy in Iran have run afoul, not only of the students and the women and the brave reformers, as you would expect, they’re starting to run afoul of their own Ayatollah because what they’re doing in running terrorism and the like is very much at odds with the Shi’a tradition.

The Shi’a, generally, not always, have been separate from the state. They have observed kind of a separation of mosque and state, and that’s what we would like to see in Iraq, as well, but that’s not what the Iranian mullahs who control the instruments of power of Iran want. They’re operating more or less like Bolsheviks in 1917 in Russia trying to take over with riots and targeted killing and the rest.

DOBBS: As a flash point, how much does this concern you, General?

WOOLSEY: A lot. Iran is — the mullahs who run Iran are a major threat to security and peace in the region. They’re a threat in Afghanistan, as they have proven in the past. They’re a threat in Iraq. They, just as Bashar Assad said on March 27, would probably very much like to turn Iraq into something like Beirut and Lebanon was for us in the early 1980s with Americans getting killed and leaving. That’s what they want.

DOBBS: Jim Woolsey, former director of the CIA. As always, good to have you here.