GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) Good morning, everyone. The war of words between the US and Iran escalated today.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Voiceover) In Tehran, President Ahmadinejad promised to continue Iran's nuclear program. While US officials in Baghdad presented evidence that proves, they say, that the highest levels of the Iranian government are behind efforts to ship explosives into Iraq.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) Here to discuss that and more our exclusive headliner this morning, Senator John Kerry. Welcome back.

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

Glad to be back. Thank you.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) The administration insists that with this new Iranian evidence they are not saber-rattling, they are not preparing for any kind of a military confrontation. Do you believe them?

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

Well, that remains to be seen. You are a going to have a skeptical Congress and appropriately so because of the last experience with Iraq. We need to ask tough questions. We will.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) But one of the things they pointed out is that these explosives which they say come from Iran have killed 170 US military officials.

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

I have no doubt that there are weapons - nobody questions that there are weapons flowing across the border. Nobody questions those of us who have been to Iraq and in the region know that there are Iranian instigators, agents in Iraq, and that's happening. No question.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) So what do you do about it?

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

The key here, George, is to listen to the Iraq study group, listen to those of us in Congress who have said we've got to engage in the region fully. That means engage with Syria, engage with Iran. I am convinced that there are a set of issues ranging from the freezing of assets, the borders themselves, ultimately, obviously the nuclear plan, the economic integration into the global community, a set of issues that Iran has enormous interest in, and every leader in the region and every observer, every expert here in our country tells us that Iran does not want a complete and total implosion in Iraq. Do they want to make mischief for us now? Yes, because there are issues of tension between us. But ultimately they want an Iraq that is stable. They want influence. They want to be players in the region, and we need to recognize that and engage in the kind of diplomacy that the Iraq study group recommended.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) You have also said that we need to set a firm deadline for the withdrawal of US troops from Iraq. You say they all or almost all have to be out in the next year. Let me read to you what the national intelligence estimate said last week though about that.

GRAPHICS: FEBRUARY 2, 2007

GEORGE STEPHANOPOULOS (ABC NEWS)

(Voiceover) It said if coalition forces were withdrawn rapidly during the terms of this estimate, we judge that this almost certainly would lead to a significant increase in the scale and scope of sectarian conflict in Iraq, intensify Sunni resistance to the Iraqi government, and have adverse consequences for national reconciliation.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) They are saying basically if you pull out over the next 12 to 18 months, you're going to have chaos in Iraq, chaos in the region.

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

That's not what I'm recommending. I went to the national security briefing. I listened to them. In fact, I asked one of the first questions, and what they are talking about is an option of either what we're doing today or a precipitous withdrawal, a complete withdrawal.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) Well, they're saying over the next 12 to 18 months, that's the timetable they point out.

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

But they're doing it in a vacuum without looking at what I have proposed and others have proposed. First of all, I have not talked about the complete and total to the chagrin of some people. What I've talked about is setting a date that leverages the behavior and the measurement of the progress of the Iraqis. Without a date, George, it's not going to happen.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) But here's the problem -

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

Now let me just finish. Let - it's very important for me to finish. Because there's also coupled to that, within that time frame of the date, a summit, a critical amount of ratcheted up diplomacy that the Iraq study group also suggested. I mean, Jim Baker is not, you know, he's not somebody to be taken lightly, nor even, you know, Larry Eagleburger or Ed Meese or Al Simpson, all moderate, thoughtful, respected voices in Washington, and they all said in a united way that we have to engage, and we have to start targeting that withdrawal date and they felt we could get troops out by March of next year. Mine is a suggestion that you leverage the behavior of the Iraqis with a set of benchmarks that allow you to measure what they're doing. Without that, they have never lived up to any expectation. Six months ago General Casey and Ambassador Challises said what, they said they have six months to make critical decisions. Did they make them? No.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) Okay, but you used the leverage, you use the leverage.

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

Correct.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) Let's say it works. The Iraqis start to meet the benchmarks. Then do the troops stay for awhile?

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

No, because there are three caveats in the proposal for setting the date. Number one, the president has the discretion to leave those forces critical to the complete the training of the Iraqis. Number two, the president has the discretion to be able to leave those forces critical to continue to prosecute against al Qaeda. And, three, the president has the ability to leave forces to protect American facilities and troops. Now, what other purpose after a year from now, George, one year from now, what other purpose could there be for leaving forces at that point in time?

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) Well the reason they're going in now, to keep Sunnis and Shiites from killing each other in Baghdad.

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

Yeah, but the only way you're ultimately going to keep Shia and Sunni from killing each other is by having the kind of political reconciliation which there is no benchmark for today. That's the point. The point is that Sunni and Shia - and this goes back 1300 years, this isn't something that started with us. And unless you resolve the fundamental stakes between the two of them, the stakes over the oil, the stakes over the federalism, the stakes over their mutual security, the position of the militia, all of that has to be done politically. It can't be done with 21,000 additional troops going in, which only acts as a bigger target, raises the stakes, makes the negotiations harder and, frankly, reduces the cards available to the United States.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) So bottom line, bottom line, combat forces, combat forces out in a year, you've watched the presidential primaries already. You've got some Democratic candidates like Tom Vilsack saying, no, we have to cut off the funding now.

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

Well, I think that's a mistake and I've said that. I don't think that's the way to approach this. I think the way to approach this is in an intelligent way that deals with the United States' interests in the region and also is thoughtful about other countries, our allies and other people's interests in the region. Lebanon is in a fight for its life. Hezbollah is stronger than ever before. Hamas is stronger than before. There's a radicalism within the Muslim world that we're all aware of that is dangerous, and you can't just sort of say that doesn't matter to the long-term interests of our nation. What I'm trying to do and others who believe that you need to set a date is not be arbitrary - is not arbitrary because the administration has said they think they can shift responsibility within that time. The Iraq study group said that that's the date we ought to target. What I'm saying is without the date, there's nothing to compel Iraqi politicians who today are using our presence as a cover for their own manipulation, for their own power struggle. There's nothing to compel them to say the order here is going to change and we have to respond. And I think you set the date. The date is not without, as I said, a sensitivity to what you need to do, to complete the training, which is all that you really ought to be there for and let me just say one other thing, we can redeploy our troops in a thoughtful way that is short of a precipitous withdrawal from the region. We can stay as a buffer in various places to Iran's interests. We can stay as an emergency reaction force to buff - to buttress the Iraqis themselves. But you've got to put them in the lead. You've got to put them in charge. It's disgraceful that after four years our soldiers are out there bearing the brunt of a patrol in a community of an IED when the Iraqis could be doing that.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) You said you want to stop the war from the Senate. You chose not to run for president again this year. What was the tipping point in the decision?

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

Well, there are two great issues that I think are the most compelling that I've seen in the entire time I've been in the Senate. One is the war in Iraq. And I think by not running, what I say about it now is outside of the cloud of, oh, he's running for president and this is why he's saying it. I'm liberated, and I can say what I believe and think, which is the same, but I hope will be understood differently and, secondly, global climate change. I know it sounds, you know, people are - it's getting a little into that clichéd atmosphere. It is, George, the most serious thing that I've confronted since I've been here. I'm on the science technology - I'm chairman of that subcommittee. I'm on the commerce committee. Teresa and I have been writing a book somewhat about that, not exclusively. The more I read, the more I study, the more compelling that issue becomes. We have to take action now. We have a 10-year window, according to all the scientists' consensus.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) So that means hard caps. It means new energy taxes.

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

It means real caps. It means reducing carbon from the atmosphere. It means building our efficiency opportunities in America. It means clean coal technology. We cannot allow these dirty coal plants to be built in Texas. We can't allow China to build one plant a week. It cannot happen. If it's happen, it's Katie bar the door.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) What role are you going to play in this presidential campaign?

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

I'm going to listen carefully and be very clear about what I think the important issues are. I'm going to try and push my definition of what I think the priorities are, look to those candidates who embrace that. And at some point in time, I would hope to get involved. But I'm not going to do it now.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) So you will eventually endorse a candidate but not now?

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

It's possible. I'm not saying that to a certainty that I will but it's very possible that I would.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) And you mention these two big issues, Iraq and global warming. Because you want to fight for those issues, will you commit to running for another term in the Senate?

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

I have. I plan to run for another term in the Senate. I'm going to keep on fighting on these issues and try to provide leadership which I think is critical.

GEORGE STEPHANOPOULOS (ABC NEWS)

(Off-camera) Senator Kerry, thanks very much.

SENATOR JOHN KERRY (FOREIGN RELATIONS COMMITTEE)

Thanks so much.