Bahman Kalbasi: Mr. President, thank you very much for your time.

Barack Obama: Thank you for having me.

Bahman Kalbasi: If I could just begin with getting your reaction to the remarks Mr. Ahmadinejad made yesterday, faulting America for 9/11.

Barack Obama: Well, it was offensive. It was hateful. And particularly for him to make the statement here in Manhattan, just a little north of Ground Zero, where families lost their loved ones, people of all faiths, all ethnicities who see this as the seminal tragedy of this generation, for him to make a statement like that was inexcusable.

And it stands in contrast with the response of the Iranian people when 9/11 happened, when there were candlelight vigils and I think a natural sense of shared humanity and sympathy was expressed within Iran. And it just shows once again sort of the difference between how the Iranian leadership and this regime operates and how I think the vast majority of the Iranian people who are respectful and thoughtful think about these issues.

Bahman Kalbasi: In your first video message to be sent in March of 2009, on the occasion of the Persian New Year, you spoke to the government of Iran, the people of Iran. And you talked about how you are committed to diplomacy. And you also said that this process of talking about all the issues on the table will only succeed if there’s no threats. And with threats, this will not go forward. Yet your administration in much of this year not only threatened Iran with sanctions but finally enacted sanctions that have been branded as “crippling.” What do you say to those who see this as a departure from that promise of no threats and diplomacy only?

Barack Obama: Well, I think we have to be — we have to look at what we’ve done this year, and it’s very consistent. What I’ve said consistently is, is that we are willing to reach out with an open hand to the Iranian government and the Iranian people, because we believe that there’s nothing inevitable that should cause Iran and the United States to be enemies.

There’s a history there that is difficult. But it can be bridged with mutual understanding, mutual respect. And we want to see the people of Iran ultimately succeed. But the government has taken Iran on a path that has led to international condemnation. And I think it’s very important to understand that the sanctions that arose this year had to do with the fact that alone among signatories to the Nuclear Nonproliferation Treaty, Iran has not been able to convince the international community that its nuclear program is peaceful. That’s not just my judgment; that’s the judgment of the international community, including countries like Russia and China that generally are very hesitant to impose sanctions on other countries. But they have consistently seen a behavior on the part of the Iranian government that indicates that it has a nuclear program that does not abide by international rules and that potentially poses a threat to the region as well as the world.

Now, that’s a choice that the Iranian regime has made. They can make another choice, and we would welcome them making another choice, which would be to act responsibly. They would then be able to have their rights for a peaceful nuclear program under the Nuclear Nonproliferation Treaty. And that would remove the sanctions and would allow them to fully enter the international community in a way that would tremendously benefit the Iranian people. But we have not seen them make that choice yet.

So this is not a matter of us choosing to impose punishment on the Iranians. This is a matter of the Iranians’ government I think ultimately betraying the interests of its own people by isolating it further.

Bahman Kalbasi. This government has lived through three decades of sanctions. What convinces you that this time it’s any different, that it will have — you know, end in some result for diplomacy or for resolution?

Barack Obama: Well, there are no guarantees. This regime has shown itself to be very resistant to observing basic international norms and being willing to engage in serious negotiations around a nuclear program that has generated great fear and mistrust in the region and around the world.

But we do think that the sanctions raise the costs for the government. Most of these sanctions are targeted at the regime, at its military. And we think that over time hopefully there’s enough reflection within the Iranian government that they say to themselves, you know, this is not the best course for our people; this is not the best course for Iran — which is rooted in an incredible civilization.

It has some of the highest literacy rates in the world. The potential for Iran to succeed economically, to open itself up to exchange and commerce with other countries, is enormous. But in order to do that, the Iranian regime I think has to take a different course than the one that it’s been on of late.

Bahman Kalbasi. You speak of increasing cost, but many would argue that this is also impacting ordinary people in Iran. We get reports every day from a small business man who can’t import a spare part, mainly because of the banking system now not providing services to them, all the way to medicine and food prices going up because shipment lines are not being ensured, all the way to old-standing sanctions like planes that are now sold to the Iranians that we have had 2,000 people die in plane crashes — all of these. Are you not worried that this might backfire, that the people of Iran would be looking at America and wondering why they’re being punished in this process?

Barack Obama: Well, look, I am obviously concerned about the Iranian people, and they are trying to live their lives. And there is so much promise in the country. The question is can the Iranian regime take a different approach that would help its people as opposed to harm its people.

Right now it’s not taking that approach. Right now what the Iranian government has said is, it’s more important for us to defy the international community, engage in a covert nuclear weapons program, than it is to make sure that our people are prospering. And the international community I don’t think prefers the choice that has been taken.

As you noted, at the beginning of my term I came in — at some political cost, by the way — because obviously outrageous, disgusting statements of the sort that Mr. Ahmadinejad just made makes the American people understandably wary of any dealings with the Iranian government. But I said, you know, there should be a way for us to change the dynamic that has been in place since 1979, since you were born. And it turns out that so far, at least, the Iranian regime has been unwilling to change its orientation.

So when people inside of Iran are asking themselves why is it that we can’t get spare parts or food prices are going up or other basic necessities are harder to come by, they have to look at the management of their own government, both in terms of the economic management but also in terms of them deciding that it’s a higher priority to pursue a covert nuclear program than it is to make sure that their people have opportunity.

I think they’re moving down the wrong course and they continue to have the option of moving down the right course.

Bahman Kalbasi: If these sanctions fail, what are your options, Mr. President?

Barack Obama: Well, I think there are a whole host of options and these options would be exercised in consultation with the international community. Our strong preference is to resolve these issues diplomatically. I think that’s in Iran’s interest. I think that is in the interest of the international community. And I think it remains possible. But it is going to require a change in mindset inside the Iranian government.

Bahman Kalbasi: For a lot of Iranians, they’re looking at the — how this scenario is playing out. Many see similarities to the run-up to the Iraq War — you know, the succession of U.N. resolutions, toughened economic sanctions, on and off talk about war and a military strike. What do you say to them that are worried that they’ll wake up to a military attack by America or Israel?

Barack Obama: Well, I think what people should remember is that I don’t take war lightly. I was opposed to the war in Iraq. I am somebody who’s interested in resolving issues diplomatically. I think that we have been very clear that the Iranian government has — and the nation of the Islamic Republic of Iran — have a right to peaceful nuclear programs and peaceful nuclear power. That is a right that all NPT members have.

So the Iranian government itself has said we are not interested in nuclear weapons. That’s their public statement. If that’s the case, there should be a mechanism whereby they can assure and prove to the international community, including the IAEA, that that is in fact the case. And if they take those constructive steps in serious negotiations, then not only should there not be a threat of war but there also won’t be the sanctions that are currently in place.

Again, the United States here is not operating unilaterally. There may have been strong objections to the United States going into Iraq. This is a situation where we’ve got the U.N. Security Council and countries that have significant business dealings with Iran making decisions not to do business with Iran despite the fact that Iran is a significant oil producer. When a country like Japan or South Korea or China or Russia — all of whom have commercial dealings with Iran — make these decisions, they do so at great cost to themselves.

And the reason they’re doing it is not simply because we’re pressuring them. The reason they’re doing it is because they too see a threat of destabilization if you have an Iranian regime pursuing nuclear weapons and potentially triggering an arms race in the region that could be dangerous for everybody.

Bahman Kalbasi: What if during this process of diplomacy, Israel decides to attack Iran? Will you stop them?

Barack Obama: Well, I’m not going to engage in hypotheticals. I think that, understandably, Israel is very concerned when the president of a country, a large country near them, states that they should be wiped off the face of the Earth.

And so, again, this is an example of where the Iranian people I believe are ill served. To have a President who makes outrageous, offensive statements like this does not serve the interests of the Iranian people, does not strengthen Iran’s stature in the world community.

And there is an easy solution to this, which is to have a Iranian government act responsibly in the international community, along the lines of not just basic codes of conduct or diplomatic norms, but just basic humanity and common decency.

Again, for Ahmadinejad to come to somebody else’s country and then to suggest somehow that the worst tragedy that’s been experienced here, a attack that killed 3,000 people, was somehow the responsibility of the government of that country, is something that defies not just common sense but basic sense — basic senses of decency that aren’t unique to any particular country — they’re common to the entire world.

Bahman Kalbasi: Mr. President, if I may, I want to move on to the human rights issue. After the disputed presidential election, we saw the birth of a Green Movement in Iran — brutally oppressed by the government. We’ve all seen the images of young men and women dying on the streets; being shot at; many being taken into custody and dying in custody; journalists, politicians, students being taken to jail and staying there for years.

For a lot of these human rights activists, when they look at the United States, even though they’ve heard you talk about “arc of justice” and you talked about Neda, they see this sense of obsession with the nuclear issue as if, if that is resolved, human rights is not the big problem for America in its relations with Iran. Are you — what’s your response to them? You know, in the streets in Tehran, there was the chanting — “Mr. Obama, are you with us or are you against us?” Are you with them or are you against them?

Barack Obama: Well, I just made a speech this week in the U.N. General Assembly in which I said that not just my administration but I think all of America sees human rights, basic freedoms, the freedom to speak, the freedom to — freedom of the press, freedom of assembly, freedom to choose your own government, freedom from fear and abuse from government, as central to who we are, central to our values, central to our foreign policy. And that applies around the world and it certainly applies in Iran.

I think all of us were moved by the demonstrations of courage and hope that were expressed in Iran after these elections. We have no interest in meddling in the rights of people to choose their own government, but we will speak out forcefully when we see governments abusing and oppressing their own people. And I think this is another example in which the Iranian government delegitimized itself in ways that continue to reverberate around the world.

Had you seen an election that was abiding by basic rules, basic norms, in which the current regime had won, it might not have been an ideal outcome from my perspective but we could have respected it. When we see instead a reaction in which people are imprisoned and beaten and shot and harassed and opposition figures are imprisoned, that I think violates the norms that need to be upheld all around the world.

So the answer is, is that for those who aspire to have their voices heard, to participate in a democracy that recognizes their human dignity, we will always stand with them.

Bahman Kalbasi: On Afghanistan — we have a large Persian audience in Afghanistan who watch BBC. And they’re hearing all these mixed messages, competing statements, about what really July 2011 means. And they’re worried about the commitment that America has to Afghanistan. Will you stay there until the job is done?

Barack Obama: Well, we are going to stay there until the job is done. The job is to provide Afghans themselves the capacity to secure their own country. And so the July 2011 date is a date in which, having ramped up our armed presence in Afghanistan in order to provide space and time for the Afghan security forces to develop and strengthen and to blunt the momentum of the Taliban, we will then start gradually reducing the number of U.S. troops and coalition troops that are inside of Afghanistan.

That’s something that I think the Afghan people want. Afghans are a very proud people, and this is a sovereign government. So we are providing them assistance. And in the short term I increased our troop levels because, frankly, we had neglected the security situation and Taliban had been able to regain momentum and control of vast portions of the country.

But now we’re seeing Afghan security forces trained. We’re seeing Afghan police trained. We’ve got a very effective civilian effort there in order to help build infrastructure and improve the day-to-day lives of people within Afghanistan. So starting in July ’11, we’ll begin to draw down those additional troops.

But we’re not going to suddenly leave, turn off the lights and go home on that date. What will happen is, as we are training up more and more Afghan security forces, they’re becoming more effective, we will transition so that they are starting to take over more responsibility for security. And slowly, the United States’ troop presence, as well as coalition troop presence, will diminish.

That I think is something that is in the interests not just of the United States, but it’s also in the interests of the Afghan people.

Bahman Kalbasi: I have very short time, Mr. President. Iran, you’ve said, could play a constructive role in Afghanistan. You have a common enemy, being Taliban. Is there a sense that you would take Iran up on its offer that it’s publicly announced that they would — they’re ready to assist. Would you take them up on that offer?

Barack Obama: Well, I think that Iran and all the countries in the region can play a constructive role in Afghanistan. This is a country that’s been war torn. Most Afghans, like people around the world, simply want an opportunity to make a living, support their families, provide an education for their children.

And so I think the entire region would benefit from a stable, peaceful Afghanistan. And we are willing to work with Iran and all the other countries in the region to achieve that goal.

Now, I have to say there have been times where the Iranian government I think has said publicly it wants to work on these issues. Behind the scenes, we see evidence that occasionally they have actually helped insurgents in ways that end up harming our troops. But we will continue to explore ways in which we can work with all the countries in the region, including Iran, to stabilize Afghanistan.

I think this is one more example of where potentially the United States and Iran could end up working together on a whole range of issues. In order to do that, though, the Iranian regime has to make a decision that it is not simply maintaining power based on animosity towards the United States, based towards outrageous statements in the international community, but rather is looking for constructive ways to improve the lives of ordinary people inside of Iran.

And if that shift in orientation takes place, I think the opportunities for tremendous progress for a great nation and a great civilization exists. If it doesn’t, then it’s going to continue to be isolated and it’s going to continue I think to cause friction not just with the United States, but with the world community.

Bahman Kalbasi: Yesterday you talked about the naysayers when it comes to the Middle East peace process. But, Mr. President, a lot of this pessimism comes from people who want peace. But they’re looking at the makeup of the Israeli government, they’re looking at the divisions on the Palestinian side, and they don’t think it’s possible at this stage for them to take that bold step. What makes you so confident that this time is different? And if so, how would that politically change the region, including Iran?

Barack Obama: Well, let me say I wouldn’t consider myself so confident that we can get this done. I think it’s necessary. And the point I was making was for decades now, we have seen this conflict not only consume the politics of the region but also hamper the ability of Israeli children to feel safe, Palestinian children to succeed and thrive.

And if we cannot begin to actually move towards a Palestinian state living side by side in peace and security with a Jewish — the Jewish state of Israel, then what we are going to see I think is more and more conflict, more and more bloodshed, and the prospects of any peaceful resolution will dissolve. So I’m moving on the — out of a sense of urgency, not because it’s easy. I think it’s going to be very difficult for us to achieve these goals.

What I am optimistic about is I think that President Abbas is a man who sincerely desires peace as well as a sovereign Palestinian state. I think Prime Minister Netanyahu has undergone an evolution in his thinking. And I think that he genuinely would like to see a peaceful Palestinian state and a secure Israeli state that’s at peace with its neighbors.

We, as an international community, then have to support those efforts, acknowledging that it’s very difficult. It may not be possible. But we have to try. And now is the time to try.

And I think that if we were able to achieve the goal of a peaceful settlement between the Israelis and the Palestinians, then that would change the dynamic of the region in a very positive way. What I think most Iranian people are looking for is that Palestinians have their right to a sovereign state. Well, there is only one way to achieve that, and that is by peace through Israel. It’s not going to be achieved through violence.

And, again, this is an example of where the Iranian regime has a choice. It can be supportive of peace efforts that result in concrete benefits for the Palestinian people, or it can choose to engage in rhetoric and fund terrorist activity that ensures continued conflict, which may serve their political interests but certainly doesn’t serve the interests of a Palestinian family on the West Bank who would prefer to have a country of their own in which they can start a business or send their children to school. That’s I think the vision that we have to keep in mind.

Bahman Kalbasi: Thank you so much, Mr. President, for your time.

Barack Obama: I enjoyed it. Thank you very much.