(Updated with video. See below the fold)

Think Progress has more excerpts and a link to the full transcript. But I found this especially interesting:

WALLACE: When we announced that you were going to be on Fox News Sunday, I got a lot of email from viewers, and I got to say I was surprised most of them wanted me to ask you this question. Why didn’t you do more to put Bin Laden and al Qaeda out of business when you were President? There’s a new book out which I suspect you’ve read called the Looming Tower. And it talks about how the fact that when you pulled troops out of Somalia in 1993, Bin Laden said “I have seen the frailty and the weakness and the cowardice of US troops.” Then there was the bombing of the embassies in Africa and the attack on the USS Cole.

CLINTON: OK..

WALLACE: …may I just finish the question sir. And after the attack, the book says, Bin Laden separated his leaders because he expected an attack and there was no response. I understand that hindsight is 20/20.

CLINTON: No let’s talk about…

WALLACE: …but the question is why didn’t you do more, connect the dots and put them out of business?

CLINTON: OK, let’s talk about it. I will answer all of those things on the merits but I want to talk about the context of which this arises. I’m being asked this on the FOX network…ABC just had a right wing conservative on the Path to 9/11 falsely claim that it was based on the 9/11 Commission report with three things asserted against me that are directly contradicted by the 9/11 Commission report. I think it’s very interesting that all the conservative Republicans who now say that I didn’t do enough, claimed that I was obsessed with Bin Laden. All of President Bush’s neocons claimed that I was too obsessed with finding Bin Laden when they didn’t have a single meeting about Bin Laden for the nine months after I left office. All the right wingers who now say that I didn’t do enough said that I did too much. Same people.

More after the Jump

...

CLINTON: What did I do? I worked hard to try and kill him. I authorized a finding for the CIA to kill him. We contracted with people to kill him. I got closer to killing him than anybody has gotten since. And if I were still president we’d have more than 20,000 troops there trying to kill him. Now I never criticized President Bush and I don’t think this is useful. But you know we do have a government that thinks Afghanistan is 1/7 as important as Iraq. And you ask me about terror and Al Qaeda with that sort of dismissive theme when all you have to do is read Richard Clarke’s book to look at what we did in a comprehensive systematic way to try to protect the country against terror. And you’ve got that little smirk on your face. It looks like you’re so clever…

WALLACE: [Laughs]

CLINTON: I had responsibility for trying to protect this country. I tried and I failed to get Bin Laden. I regret it but I did try. And I did everything I thought I responsibly could. The entire military was against sending special forces into Afghanistan and refueling by helicopter and no one thought we could do it otherwise…We could not get the CIA and the FBI to certify that Al Qaeda was responsible while I was President. Until I left office. And yet I get asked about this all the time and they had three times as much time to get him as I did and no one ever asks them about this. I think that’s strange.

It's rather nice to see someone actually fighting back. I had my problems with Clinton, but at least he knew how the game was played, and didn't roll over and play dead. He understands that no one else can make your case, for you, as well as you yourself can.

And this part, about the Republican strategy of fear, is also interesting:

CLINTON: well every even number year right before an election they come up with some security issue. In 2000 right before the election …In 2002 our party supported them in undertaking weapon inspections in Iraq and were 100% behind them in Afghanistan and they didn’t have any way to make us look like we didn’t care about terror. And so they decided they would…the homeland security bill that they opposed and they put some pill in it that we wouldn’t pass like taking the job rights away from 170,000 people and then say that we were weak on terror if we weren’t for it… This year I think they wanted to make the question of prisoner treatment and intercepted communications the same sort of issue until John Warner came and Lindsey Graham got in there and it turns out there were some Republicans who believe in the constitution and their convictions…some ideas about how best to fight terror.

As long as the American people believe that we take this seriously and we may have our differences over Iraq but I think we’ll do fine this election. Even if they agree with us about the Iraq war we could be hurt by Karl Rove’s new foray if we don’t make it clear that we care about the security of this country. We want to implement the 9/11 commission recommendations which they haven’t in four years. We want to…Afghanistan against Bin Laden. We want to make America more energy independent. If they want to talk about Iraq say what they really want about Iraq.

But Rove is good and why I honor him…I’ve always been amused by how good he is. But on the other hand this is perfectly predictable. We’re going to win a lot of seats if the American people aren’t afraid. If they’re afraid and we get divided again then we’ll only win a few seats.

WALLACE: Do you think the White House and the Republicans want to make the American people afraid.

CLINTON: Of course they do. They want another homeland security bill and they want to make it not about Iraq but some other security issue. Where if we disagree with them we are by definition endangering the security of the country. And it’s a big load of huey. We’ve got 9 Iraq war veterans running for House Seats. President Reagan’s Secretary of the Navy is the democratic candidate for Senate in Virginia. A three star admiral who was on my NSC staff — who also fought terror by the way — is running for the seat of Kurt Weldon’s in Pennsylvania. We’ve got a huge military presence in this campaign and you can’t let them have some rhetorical device that puts us in a box that we don’t belong in. That’s their job. Their job is to beat us. But our job is to not let them get away with it and if we don’t we’ll be fine.

Update: Do watch this - what Fox chose to run.

Notice that they've clipped out only the most damning part. Hatchet job indeed - it ends with a whine "I tried, I failed". This is the problem with fundamentally dishonest actors like Fox News (indeed, all the networks) - he who controls the editing, controls the message. You can ask Dean about that. Anybody can be hatchetted.

But Fox better get down on their knees and pray Hilary never winds up as President. I don't get the feeling she's a real forgiving sort. That's two networks now who have gone to the mat for George Bush.

Which is two more reasons to break up the conglomerates and reinstitute the fairness doctrine.