The National Interest: You were quoted describing the U.S.-Indian civil nuclear deal as "one of the most thoughtful approaches to foreign policy in the last 25 years."

Chuck Hagel: South Asia is potentially the most dangerous region in the world. All of the most dangerous and combustible elements are present. You have four nuclear powers: Russia, China, India and Pakistan, and a fifth aspirant, Iran. The Pakistan-Afghanistan border is the focal point for a good deal of terrorist-extremist activity; the Taliban has been reasserting itself and has re-emerged in that area. There are tremendous fault lines--cultural, historical, tribal and religious--which run throughout the region. One does not have to look much further than the question of Jammu and Kashmir and how it divides Pakistan and India.

I do believe that the agreement that President Bush signed with Prime Minister Manmohan Singh on a wide range of areas for joint cooperation, including nuclear, security, economic, education, agriculture and science, represents some of the most creative strategic thinking we've seen in some time. At the core of the agreement is energy--and the need for energy is the driving force that brings all countries and societies together. India is set, within 25 years, to overtake China as the world's most populous nation. If the Indian economy is to grow to address this great explosion in population, a stable and secure supply of energy is required. The same, by the way, is true for China and other developing countries, not to mention for the developed world.

It bears repeating that energy is the driving force behind growth--and economic growth means more jobs, better standards of living and more productivity. This enhances people's standards of living and their prospects for the future. This translates into stability and security. All of this is interconnected. This is why I think this comprehensive agreement is clearly in the interests not only of India and the United States but the world as a whole. This was the message I presented to Pakistani President Pervez Musharraf, to other senior officials of his government and to leading business figures in Pakistan this past April.

Why is the U.S.-India agreement in Pakistan's interest? It connects the United States into South Asia in an even more prominent and positive fashion than we are now. It makes the U.S.-India relationship more stable, consistent and predictable, and this can, in my opinion, only be helpful and positive for Pakistan. I made it clear to Musharraf that this agreement is in no way intended to threaten the U.S. relationship with Pakistan or any other state. It is a straightforward arrangement based on the mutual interests of India and the United States, although I do believe it has residual benefits that radiate out into Pakistan and China and other nations there. As I have noted, the agreement helps expand the breadth and depth of U.S.-India relations across the entire arc of our bilateral interests. In particular, helping India more-effectively address its expanding energy requirements should be beneficial for all of the region and the world's energy consumers.

I know the Pakistanis are concerned. In their view, they have been a good ally--and they have, and we should not minimize that. So why is a similar agreement not in the cards for Pakistan? I was very honest with Musharraf. It comes down to the proliferation issue. Pakistan has a very bad record, particularly because of A. Q. Khan, and they acknowledge this. But I pointed out to him that in the future the United States may be able to work out some kind of an agreement with Pakistan that would be similar to what we have negotiated with India. But for now, we need to work through the more immediate issues.

TNI: In the Summer 2005 issue of The National Interest, Ambassador Robert Blackwill described India as a "natural ally" of the United States. Would you concur?

CH: We are the world's two leading democracies, and not only are we connected by important commercial and business ties, we share common geopolitical and strategic interests. In my meetings with Prime Minister Singh and members of his cabinet and with a number of private-sector leaders in both New Delhi and Mumbai earlier this spring, we discussed the steps that would need to be taken for the United States and India to formalize its relationship in additional relevant ways as we enter the 21st century.

It is popular for commentators to describe the "new" relationship between the United States and India. But we have had, over many, many years, a relationship that has gone unnoticed by many. I was a bit taken aback on this recent trip to India, when government officials and business leaders would tell me about their connection to my state of Nebraska. Some had received doctorates from the University of Nebraska--many Indian students had studied there engaged in research in agriculture. There are significant, historical ties between India and the United States, and student exchanges have been a major component.

It is important to point out that the nuclear deal is only one part of a larger package--an entire relationship with India that encompasses agricultural and educational exchanges, trade and commerce. Even geopolitical strategic diplomatic relationships are woven into this.

TNI: Does a closer relationship with India jeopardize existing ties between Pakistan and the United States?

CH: I made it very clear to the Pakistanis that the U.S. relationship with New Delhi and Islamabad is not an either/or kind of arrangement. We have a very close friendship, alliance with Pakistan. They are an indispensable ally of the United States. India is a critical and important ally to the United States. It is not a matter of choosing between the two, not at all. In my conversations, particularly with Musharaff, I wanted to make clear that the U.S. aim is not to engage in a "great power game", trying to leverage our relationships and set one state against another, that improved U.S. ties with India are not meant to threaten Pakistan, China, Russia or any other state in the region.

I think the greater mistake we have made in the Middle East over the years is [that] somehow it has been perceived that we have "preferred" the Israelis over the Arabs, and that has caused a lot of problems. That should never be the case. We have strong relationships with our Arab friends and alliances with those friends, and we are obviously strong supporters of Israel. But nations get themselves into trouble when they play this kind of game, and they particularly get into trouble if the perception is out there that that is the case.

TNI: Iran is increasingly becoming the top U.S. foreign policy priority.

CH: Yes, and in both India and Pakistan, Iran was a question that we talked about in some specificity. After all, they live in that part of that world. Iran borders Pakistan. India has a relationship with Iran based on energy. These two countries, Pakistan and India, have as much to win or lose with the outcome of a showdown with Iran as anyone. And they are concerned that we, the United States, seem at times to arbitrarily make policies and do not take into account what impact our actions may have on their national interests, since "we don't live there."

We first have to recognize that the world is now completely interconnected. In a global community underpinned by the global economy, we must resolve our differences rationally, peacefully and diplomatically. The world is too dangerous to do otherwise. Weapons of mass destruction have changed everything. We must be very mindful of the fact that we live in a hair-trigger world. That's why these agreements and relationships that bind us together in ways of mutual interest are so important, because we all have interests in these relationships. And so when you intertwine that fabric with all these countries and interests, it is more difficult for countries to break away or become isolated or take precipitous action that might lead to some real trouble in the world. Closer strategic relations for the United States with India, Pakistan and other countries in South Asia will be critical to address the challenges and opportunities of an interconnected world.

That's why I believe that the United States should deal directly with Iran. We should be talking directly with Iran about the entire framework of issues, including the nuclear issue. I do not know of any other way to deal with these kinds of complex dangerous issues than to talk. What do we have to lose, and what are we afraid of? We are the greatest power on earth. We are not negotiating with them in order to be giving anything away to them. But by refusing to talk--this is what leads to real dangerous predicaments, when you isolate countries, when you don't talk to countries, and you somehow think that you're accomplishing something. I think the world is far more dangerous today in the Middle East than it's ever been. And I think part of that is because our policies have been wrong.