TRANSCRIPT: Bob Woodward Talks to ABC's Diane Sawyer About 'Obama's Wars'

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SAWYER: And a stack of requests from the military unanswered, unfulfilled. You also -- this is just a small thing, but you talk more about the role of the Saudis than I had seen before. It approaching the Taliban in Queta, in dealing with the Iranians.

WOODWARD: There's a secret channel that the Saudis have with the Taliban, and it's not really delivered much so far.

SAWYER: Some other portraits here -- Karzai. Karzai, what they are saying about President Karzai, that's he's bipolar, that he's off his meds?

WOODWARD: This is -- see, we -- we wonder why this unreliable partner and of you go into the intelligence as I had about Karzai, it turns out he's a diagnosed manic depressive, he's on medication --

SAWYER: You believe this?

WOODWARD: The intel agencies believe it at the highest level and with the most graphic detail. And the intelligence shows that sometimes he's delusional, sometimes, as our ambassador reports to Joe Biden last spring, Karzai's on his meds, off his meds.

SAWYER: Delusional? In what sense?

WOODWARD: Well for instance, when our representatives went to Karzai in the election last year and it looked like there might have to be a runoff as required by the Afghan constitution, they told Karzai that and Karzai said this is a British-American plot against him. And it was merely -- gee, Mr. President, that's in your own constitution, and he wouldn't hear of it.

And if you look at what's going on now about him springing his aides who are arrested or under investigation. In one of these meetings, General Petraeus says, the Karzai government is a criminal syndicate.

SAWYER: Is he talking about the Karzai government or talking about the constellation of Taliban to corruption to the whole thing?

WOODWARD: Well, it's all connected. That's the problem.

SAWYER: So what does this say about the future and dealing with Karzai?

WOODWARD: Well this is one of General Lute's four risks, how do we govern. Not good news.

SAWYER: Secretary Clinton -- what did you learn about her role?

WOODWARD: Well, first of all, David Axelrod, the president's key adviser, when the president said I'm thinking of Hillary for a cabinet post, asked, how can you trust Hillary? And Obama, then president-elect, said, no I know how she'll be loyal, I'll be able to use her, this is important.

But again, it's one of those unsettled relationships. She never -- in the political White House, they look at her and they remember the bloody campaign of 2008 and --

SAWYER: Shame on you.

WOODWARD: Yes, when she said, shame on you, Barack Obama. And, you know, that's politics and you don't forget. To the president's credit, he's used her as secretary of state.

But when she says things at meetings, for instance, at one of the meetings she said, well, you, Mr. President, have a hard decision. And on the back bench, people like Press Secretary Gibbs just go, see, she's putting it all on the president, she's not being a team player. And so there are suspicions that linger.

SAWYER: And she was allied with the military straight through.

WOODWARD: She and -- and out of conviction. But she believed that we needed to send 40,000 troops, we needed to do what the military wanted and there was no give on her part. So the president and the White House team looked at this, you've got Hillary, you've got Gates, you've got the entire uniform military establishment saying you've got to do it this way, where's the choice.

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