Transcript: George Stephanopoulos Interviews President Obama

STEPHANOPOULOS: No, it's President Ahmadinejad. You have to have deal with him.

OBAMA: -- and now President Ahmadinejad. You're -- you're trying to get a rise out of me.

STEPHANOPOULOS: And it's not going to work?

OBAMA: No, it's not. I mean, look, the guy -- the guy's known for saying some pretty, pretty unconstructive stuff, how's that? And offensive stuff. So, I don't take that seriously. What I do take seriously is the fact that if we consistent and steady and applying international pressure, that over time, Iran, which is not a stupid regime, which is very attentive in watching what's happening in the international community, will start making a different set of cost benefit, you know, analyses about whether or not pursuing nuclear weapons makes sense for them.

STEPHANOPOULOS: Whose mind do you have to change there?

OBAMA: Well, I think, you know, how Iran works internally is a, is a pretty complicated thing. Ahmadinejad is just one player among many. Obviously, Khomeini is the, the person who probably has the ultimate power in Iran right now, but I think things are in flux in part because after this election, what we've seen is a delegitimizing of that regime. The violations of human rights, what we've witnessed on the internet and other venues have, I think, weakened this -- this -- this government.

So that there are probably a whole bunch of different power sources. And that's part of what has made this process difficult. I mean, it's not at all clear that they would have made the same decisions, for example, to reject the international offer that was made by the P-5 Plus One had they felt more secure and more stable. The fact that it came after an election may have, in fact made them dig in their heels a little bit more.

STEPHANOPOULOS: Are you seeing any signs there that they're ready to change their behavior?

OBAMA: Well, you know, we haven't seen the kinds of signs that would satisfy me. And that's why I think we've got to keep on pursuing all options. And at this point, the most important option in front of us is -- is strong and vigorous sanctions.

STEPHANOPOULOS: Let me ask you about Afghanistan. There's been something of a war of words between your administration and President Karzai recently. And -- and your press secretary, Robert Gibbs, refused to call him an ally the other day. And I think a lot of Americans wonder, if he's not an ally, why are we putting American lives on the line?

OBAMA: Well, first of all, the reason we're putting American lives on the line is because 3,000 Americans were killed by an attack that was launched from Afghanistan. And those people are still out there, still plotting to kill Americans.

So the reason the American troops are there, first and foremost, is because we've got to make sure that something like that doesn't happen again. And that means that we are going after al Qaeda to dismantle and destroy them. I say at the beginning of my Afghan strategy, that was our central concern. That remains our singular focus. But in order to do that, what we've said is we've got to work both in Afghanistan and in Pakistan to create an environment in which these extremist organizations are further and further isolated.

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