MR. O'REILLY: Okay. Let's start with national security. Do you believe we're in the middle of a war on terror?
SEN. OBAMA: Absolutely.
MR. O'REILLY: Who is the enemy?
SEN. OBAMA: Al Qaeda, the Taliban, a whole host of networks that are bent on attacking America, who have a distorted ideology, who have perverted the faith of Islam. So we have to go after them.
MR. O'REILLY: Is Iran part of that component?
SEN. OBAMA: Iran is a major threat. Now, I don't think that there is the same -- they are not part of the same network. You know, you got Shi'a and you got Sunni. We gotta have the ability to distinguish between these groups because, for example, the war in Iraq is a good example where I believe the administration lumped together Saddam Hussein, a terrible guy, with al Qaeda which had nothing to do with Saddam Hussein.
MR. O'REILLY: All right. We'll get to that in a minute.
SEN. OBAMA: And as a consequence, we ended up, I think, misdirecting our resources. So they're all part of various terrorist networks that we have to shut down and we have to destroy. But they may not all be part and parcel of the same ideology.
MR. O'REILLY: But I still don't understand -- and I'm asking this as an American as well as a journalist -- how threatening you feel Iran is. See, look, if Iran gets a nuclear weapon, okay, to me, they're going to give it to Hezbollah if they can develop the technology. Why not? And so we don't have anything to do with it. So therefore, the next president of the United States is going to have to make a decision about Iran, whether to stop them militarily. Because I don't believe -- if diplomacy works, fine. But you've got to have a plan b. And a lot of people are saying, look, Barack Obama's not going to attack Iran.
SEN. OBAMA: Here's where you and I agree. It is unacceptable for Iran to possess a nuclear weapon. It would be a game changer, and I've said that repeatedly. I've also said I would never take a military option off the table.
MR. O'REILLY: But would you prepare for one?
SEN. OBAMA: Well, listen --
MR. O'REILLY: Answer the question, Senator. Anybody can say options. Would you prepare for it?
SEN. OBAMA: Look, it is not appropriate for somebody, who is one of two people who could be the president of the United States, to start tipping their hand in terms of what their plans might be with respect to Iran. It's sufficient to say I would not take the military option off the table and that I will never hesitate to use our military force in order to protect the homeland and United States interests.
But where I disagree with you is the notion that we've exhausted every other resource. Because the fact of the matter is is that for six, seven years during this administration, we weren't working as closely as we needed to with the Europeans to create --
MR. O'REILLY: Diplomacy might work. You might be able to strangle them economically.
SEN. OBAMA: Sanctions, maybe.
MR. O'REILLY: Maybe. But that's just all hypothetical.
SEN. OBAMA: Well, everything is hypothetical. But the question is, are we trying to do what we need to do to ratchet up the pressure on them to change their --