Transcript: National Security Adviser Gen. James Jones and Sen. John McCain, R-Ariz.

STEPHANOPOULOS: Good morning and welcome to THIS WEEK. Our exclusive headliners today: General Jim Jones, Senator John McCain.

(BEGIN VIDEO CLIP)

JONES: We are focused on al Qaeda, but we're also focused on extremism of any form.

(END VIDEO CLIP)

STEPHANOPOULOS: In his first Sunday interview, the president's national security adviser confronts two wars, Dick Cheney's scorn, terrorists in the U.S., and gays in the military.

Then, the GOP's candidate in 2008 weighs in on Obama's start and his party's future.

(BEGIN VIDEO CLIP)

MCCAIN: I realize that elections have consequences.

(END VIDEO CLIP)

(ABC News Photo Illustration)

STEPHANOPOULOS: McCain and Jones, only on THIS WEEK.

Plus...

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Now is the time to put a new foundation for growth in place.

(END VIDEO CLIP)

STEPHANOPOULOS: ... the recession may be winding down, but will lingering job loss and record deficits stall Obama's agenda? That and the rest of the week's politics on our roundtable with George Will, Cokie Roberts, Sam Donaldson, and Robert Reich.

And as always, the "Sunday Funnies."

(BEGIN VIDEO CLIP)

JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": It was hot today, wasn't it? I'll tell you, whew, I was sweating like John Edwards waiting to watch his wife on Oprah.

(LAUGHTER)

(END VIDEO CLIP) ANNOUNCER: From the heart of the nation's capital, THIS WEEK with ABC News chief Washington correspondent, George Stephanopoulos, live from the Newseum on Pennsylvania Avenue.

STEPHANOPOULOS: Hello again, and happy Mother's Day to all of the moms watching. We're going to begin with a Sunday first.

General James Jones, welcome to THIS WEEK, your first appearance as national security adviser.

JONES: Exactly. Thank you.

STEPHANOPOULOS: You all had a busy week this week. The heads of Afghanistan and Pakistan came here to the United States to meet with the president -- to meet with the president's entire team.

And you seemed to be on the same page, yet after the meetings, the president of Afghanistan, Hamid Karzai, said that all air strikes -- all American air strikes in Afghanistan must end. Will the U.S. comply with that demand?

JONES: Well, I think that we're going to take a look at trying to make sure that we correct those things we can correct, but certainly to tie the hands of our commanders and say we're not going to conduct air strikes, it would be imprudent.

That's part of the combined arms package and so we probably would not do that. But we are going to take very seriously the -- and redouble our efforts to make sure that innocent civilians are not killed.

STEPHANOPOULOS: Does President Karzai understand that you're not going to comply with that demand? And what do you expect his reaction to be?

JONES: Well, I think he understands that we have to have the full complement of our offensive military power when we need it. We have to -- we can't fight with one hand tied behind tied behind our back.

But on the other hand, we have to be careful to make sure that we don't unnecessarily wound or kill innocent civilians. But the other side of the coin is that it -- what makes it difficult is the Taliban, of course, not playing by the same rules.

They're using civilians as shields. So we have to take a look at this, make sure that our commanders understand the -- you know, the subtleties of the situation, the complexity of it, and do the right thing.

So it's a difficult problem, but it's not unsolvable.

STEPHANOPOULOS: President Karzai also said while he was here that he believes Osama bin Laden is alive. Yet President Zardari of Pakistan says he thinks bin Laden is dead.

What is the best U.S. intelligence right now?

JONES: I think the best intelligence is that we gauge our reaction based on what intelligence we have. And it is inconclusive. Secondly, we wait and see how long it has been before we've seen him actually make a statement, release a video, and make our judgments on that.

The truth is, I don't think anybody knows for sure.

STEPHANOPOULOS: Well, let me ask you about that, because we saw some audio tapes from Osama bin Laden in both January and March of this year, and it's my understanding that U.S. intelligence thought that those were authentic.

JONES: Mm-hmm.

STEPHANOPOULOS: So what has changed since then to make the intelligence inconclusive?

JONES: Well, as of March, they thought it was authentic, but we don't have any firm information that says that that has changed one way or the other. So I think we'll just continue to press on and we'll see what happens there.

STEPHANOPOULOS: What does your gut tell you?

JONES: I -- my gut -- I would like to know conclusively if that's not the case. And I think we have that evidence.

STEPHANOPOULOS: Does it matter any more if he's dead or alive?

JONES: I think it matters symbolically to the movement, for sure. But it's clear that that movement has been resilient in replacing their leaders as quickly as we are able to capture or eliminate them.

But I think symbolically it would be a very big thing if he weren't.

STEPHANOPOULOS: Let me ask you about Vice President Cheney, he has been something of a media tour lately. And the big point he is making is that the Obama administration actions, repealing some of the Bush administration counterterrorism policies, announcing you're going to close Guantanamo, ending enhanced interrogation techniques are all putting America at risk of another attack.

Now that is a serious charge coming from a former vice president. What's your response?

JONES: Well, I would take issue with some of those allegations. And I think, frankly, in the Bush administration there wasn't complete agreement with the vice president on that score.

The truth of the matter is that the Obama administration inherited a situation at Guantanamo that was intolerable. There are only two people had been - who had entered a plea, they both had been released with time served. Hundreds of people went through Guantanamo and were released. Many of those are back on the battlefield right now waging war against us again.

The Obama administration has put a stop to that temporarily as you know. We do have some decision points coming up. The president is absolutely committed to making sure that we recognize the rule of law principle, we don't make America less safe and that we continue to try to find the right balance in what could be a multi-layer approach.

STEPHANOPOULOS: I want to get to more on Guantanamo in a second but let me just press this one more time. The vice president, former vice president says the Obama administration is putting America at risk of another attack.

JONES: Oh, I don't believe that.

STEPHANOPOULOS: That's clear enough. Let me ask you more about Guantanamo, then. Because the Congress has sent several more strong messages to the administration about Guantanamo this week. The chairman of the House Appropriations Committee, David Obey, did not include the money for closing Guantanamo in his war spending bill and Republican leaders in the Congress have mounted a campaign against bringing any of the detainees from Guantanamo into the United States. Here's Senator Kit Bond.

(BEGIN VIDEO CLIP)

SEN. CHRISTOPHER S. BOND, R-MO.: Whether these terrorists are coming to prison in Kansas or a halfway house in Missouri or any other state, I can tell you this. Americans don't want these terrorists in their neighborhoods.

(END VIDEO CLIP)

STEPHANOPOULOS: In fact, the Republican leadership has introduced legislation called the Keep Terrorists Out of America Act which would require approval from both the governor and the state legislature of a state before any detainees can be brought in. What does the administration think of that legislation?

JONES: Well, the first think I would say about that is there has been no decision taken. This is an issue that we are - the president is studying but absent the final determination this is all speculation.

STEPHANOPOULOS: But you have determined - you don't know exactly how but because we're asking other countries to take detainees, that we're probably going to have to take some as well. Secretary Gates said that to the Congress this week.

JONES: We're going to have to figure that out and those discussions are currently under way so it would be premature to comment on what the president might or might not do at this particular point.

STEPHANOPOULOS: But how about the legislation? They are saying before anyone comes back, a governor and a state legislature must approve. Do you have any problems with that?

JONES: Well, we'll take that under advisement. These are near term subject that are currently being discussed and that is going to have to be one of the decision points and one of the discussions that we'll have on this issue but it hasn't been determined yet.

STEPHANOPOULOS: This - I'm just a little confused on that because Secretary Gates did say a couple of things when he testified this week. He did say that some would have to be brought into the United States. He said there's this problem of 50 to 100 detainees who can't be tried and can't be released and we're going to have to find a way. In fact, the Pentagon is looking into building a prison.

You're saying now you've already made the threshold decision that some detainees are going to have to come to the United States.

JONES: Well, if you're going to ask other to take some, you're going to have to figure out how you're going to have to do that and that's where we are right now. No decision has been taken as to exactly how to do that.

STEPHANOPOULOS: Because this has become so thorny - the president wants to close Guantanamo by the January deadline. Are you open to extending that deadline? This has turned out to be quite a difficult decision to implement.

JONES: Well, the - again, the very discussions on these issues and how to do this are currently on the table at the White House. We are coming up on the 20 May deadline for a decision so there will be some announcements made in the near future but no decision has been taken yet.

STEPHANOPOULOS: But the president has not ruled out bringing back military commissions try them, either, correct?

JONES: I think the - all options are on the table. The president has said that at some point there may be a multi-layered approach that has to be developed in order to solve this problem but it's clear that we want to maintain our values, we want to protect the judicial process and this president is not going to do anything that's going to make American safe - less safe by bringing people into the country that is going to put ourselves at risk. That is simply not going to happen.

STEPHANOPOULOS: Let me bring up the issue of gays in the military. The president has said he wants to reform that policy, allow gays to serve openly in the military and actually a remarkable letter from the president was released this week to Lieutenant Sandy Tsao, who was a serviceperson who was discharged from the military because she's a lesbian and there is this handwritten note I want to show our viewers right now from the president to Sandy in which he says, "Thanks for your wonderful and thoughtful letter.

STEPHANOPOULOS: It is because of outstanding Americans like you that I committed to changing our current policy. Although it will take some time to complete, partly because it needs congressional action, I intend to fulfill my commitment, Barack Obama."

Now, this is in the Congress right now. Will take legislation to completely overturn but some of the president's supporters like Congressman Rush Holt of New Jersey say that what the president can do right now is issue an executive order to review the policy and order the military to stop investigation and prosecutions while that review is going on, while the Congress is considering this legislation. Will the president issue such an order?

JONES: Well, that is, of course, up to the president. And this issue is something that has been brought up during the campaign. We have had preliminary discussions with the leadership of the Pentagon, Secretary Gates, the chairman of the Joint Chiefs, this is, as you know, George, better than most, this is an issue that is not going to be a light switch but more of a rheostat in terms of discussing it and building - having the discussions that have to be had with the military in order to make sure the good order and discipline of the military ...

STEPHANOPOULOS: And I understand that and this is a complicated issue.

JONES: So it's a complicated issue. It will be teed up (ph) appropriately and it will be discussed in the way the president does things, which is be very deliberative, very thoughtful, seeking out all sides on the issue and trying to ...