This is a rush transcript from "Hannity," August 20, 2014. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: This a ''Fox News Alert.'' U.S. officials have confirmed that the video released by ISIS is, in fact, authentic and that it shows the beheading of American photojournalist James Foley.

And joining me now with exclusive reaction is the former vice president of the United States, Vice President Dick Cheney. Mr. Vice President, thank you for being with us. We appreciate your time.

DICK CHENEY, FMR. U.S. VICE PRESIDENT: Good evening, Sean.

HANNITY: You know, you said a while back-- and a lot of people kind of hemmed and hawed at what you said-- you predicted that America will likely get hit in the next 10 years in a way that was worse than 9/11. Did you watch this video?

CHENEY: I've seen not the entire video, just the edited version.

HANNITY: OK. The-- I watched this video. You know, remember the 9/11 commission report conclusion, they are at war with us. We weren't at war with them. After watching this video, I'm pretty convinced that we have a group of people at war with us. Would you agree with that?

CHENEY: Absolutely, Sean. There's no question what with the developments of Iraq and Syria, the development of a caliphate, that the ISIS organization in charge is very much a threat to the United States, to our friends and allies not only in the Middle East but in Europe.

And when you see them behead an American reporter, as they did today, that's obviously a terrible development, but magnify that a million times over because that's what's in store for the rest of the world if we don't deal effectively with this crisis.

HANNITY: You know, the president said the tide of war is receding, GM's alive, bin Laden is dead, Ft. Hood-- what happened, the massacre there is still officially referred to as workplace violence. You've heard the term ''man-caused disaster,'' overseas contingency operation.

Here's what the president said in an interview with The New Yorker about ISIS. He said, ''Well, the analogy we use around here sometimes, and I think it is accurate, that, you know, as if a JV team puts on Laker uniforms, that doesn't make them Kobe Bryant.''

What part of this is the president missing, Mr. Vice President?

CHENEY: Well, I keep wrestling with this question, Sean, of whether it's naivete or lack of experience or because that's the way he wants things to work. I've just about reached the point where I've concluded that what he is discovering fairly late in his administration is that his basic world view is fundamentally flawed, that the world is a mean, nasty place on occasion, that you need a very strong America, you need superior American military forces to deal with it.

And I think every single day that goes by, he's finding that there's a bigger and bigger gulf between his hoped-for view of the world and reality. He's not up to speed and does not want to believe all that's going on out there. But every day, we find new evidence that he'd rather be on the golf course than he would be dealing with the crisis that's developing rapidly in the Middle East.

HANNITY: What did you-- how was your reaction today when the president minutes after he gave that three-minute statement ran off to the golf course to play with Alonzo Mourning? What was your reaction to that?

CHENEY: Well, I noticed the reaction of David Cameron, the British prime minister, when he found out that the individual who apparently did the beheading was speaking with a British accent. He wanted to immediately leave his vacation spot, head back to London and go to work, trying to deal with the problems that that represents. And of course, our president headed for the golf course as soon as he made his relatively, I thought, ineffective statement.

HANNITY: I would think a more appropriate place might be the Situation Room. I think a more appropriate place would be the White House.

We have all these radical Islamic groups-- Islamic Jihad, Boko Haram, Hezbollah, Hamas, the Muslim Brotherhood, ISIS, ISIL, Al Qaeda. There are differences, but there seems to be one thing that they all agree on. That is, they want to wipe Israel off the map. And they also want to destroy the West and advance a caliphate.

Does the -- do you think the president fully understands the danger of radical Islam? And what do you think the danger is, if you can explain it in your own words?

CHENEY: Well, I think the danger is enormous. I don't think the president understands it. I look at things like the Rand report that was published a couple months ago that talked about a 58 percent increase in the number of jihadist groups around the world over a three-year period of time. I look at the statements by General Flynn, who's just stepping down as director of the Defense Intelligence Agency, who says over a 10-year period of time, there's been a doubling of the terrorist threat in that part of the world.

The intelligence is there for all to see. There's no question about what's happening. But this president and the people around him refuse to recognize it and certainly refuse to deal with it. The damage that is being done as we talk tonight, Sean, to the American military, is enormous. They're taking our Army down below levels we haven't seen since Pearl Harbor. They've made major reductions in the Air Force and the Navy. There was a recent excellent study done by a commission, bipartisan commission, Republican and Democrat alike, studying the long-term trends of the defense budget that basically concludes that there's no way under current circumstances we can execute the national strategy.

So it's a train wreck. And there's one more train wreck every day. It's hard to believe that this president is as ineffective as he clearly is.

HANNITY: Mr. Vice President, we have seen the rise of ISIS, ISIL, throughout the region from Syria-- we lost 4,000 Americans in the Iraq war. City after city that they freed-- and albeit, it wasn't a perfect democracy, but they were an ally and they were a democracy, an emerging democracy, in Iraq prior to the administration coming into power.

There seems to be two issues that are the foundation for the situation now. One was when the president drew the red line in the sand with Syria and did nothing after they used chemical weapons, and also the president pulling out training and intelligence for the Iraqi forces.

My question to you is, did ISIS gain control of these areas of Syria, now surrounding Baghdad-- is this all a result of the president's bad policy, the naivete that you discuss?

CHENEY: Well, I think that's part of it. I think he has managed in so many different ways to be ineffective when he responds, to draw the red line in the sand and then never respond to it, to make threats and never act. It's reached the point where I think around the world, people, other leaders see him as weak and ineffective.

We've seen it in terms of Putin's actions in Crimea and the Ukraine. We've seen it in what China's trying to do in the South China Sea. There is no question but what he is viewed as perhaps the weakest president of my lifetime and that he doesn't have a clue about what needs to be done, and he is viscerally opposed to the use of military force.

We've had a bipartisan agreement, consensus, if you will, Republican and Democrat, since the end of World War II that the world's a safer place when the United States is actively and aggressively leading, when we have a strong military and we provide the kind of leadership that the world needs to deal with these crises.

HANNITY: Can I ask you--

CHENEY: Barack Obama doesn't believe that. Barack Obama doesn't believe that. He's the first in a chain of presidents going back to Harry Truman of either party that simply refuses to recognize the reality of the world we live in.

HANNITY: With that said, I'm not sure America has the appetite. You know, all those cities that Americans fought and died for in Iraq now, ISIS is controlling many of them-- you know, what should be done if the country doesn't have an appetite for war? And sort of-- I want your answer viewed through the prism that you think something horrific is likely to happen worse than 9/11 in the next 10 years.

CHENEY: Well, I think the question of lack of desire for war-- I think that's a general proposition for the American people. We're basically a peaceful, democratically elected governments. We periodically have to use military force, and you've got to explain to the American people why that's necessary, what the dangers are, what the objects are, what the objectives are.

It's leadership, and Barack Obama's not providing it. Of course, it's difficult to persuade the American people that we ought to send our sons and daughters off to fight a war. But sometimes, it's absolutely necessary. And that's why we have presidents. And that's why they have the authority as commander-in-chief to make those decisions and why those of us who are involved need to do everything we can to support them and support our troops in the field.

Now, is there a great threat coming? Absolutely. Remember what happened on 9/11, when 19 guys armed with airline tickets and box cutters came here and killed 3,000 of us, took down the World Trade Center, blew a big hole in the Pentagon. I'm absolutely certain that some day, there will be another mass casualty attack against the United States. Only next time, they'll have far deadlier weapons.

HANNITY: Let me ask you this. You're the president of the United States, and now you know that if you respond to ISIS, that another American, another video like the one that I watched today, will be coming out. How specifically do you answer that? I don't think you're going to find the answer on the golf course, by the way. But you know, you know that if you respond militarily that another video with another American being decapitated is going to come out.

I would want to talk to all the best, brightest, smartest people in the country before I made my decision. I don't think it's-- I like Alonzo Mourning. He's a great player. But I don't think he's the guy that should be guy giving advice to the president on this.

CHENEY: Yeah. But Sean, with all due respect, it's a tragedy when someone dies like that. No question about it. But that's not the issue. They're trying to use terror, obviously, acts of terror against us, especially against the press, in order to try to force us to change our behavior or to dominate that part of the world.

The issue is whether or not we're going to allow them to succeed in their basic fundamental objective in achieving a caliphate, a true caliphate, representative of the kind of thing we saw centuries ago in the Middle East, and follow their ideology, which calls not only for the destruction of Israel but also the United States.

HANNITY: Let me-- can I play for you--

CHENEY: Now, are we going to pull yourself up by our bootstraps and get on with the business of destroying ISIS, or are we simply going to sit back and agonize every time they commit another outrageous act?

HANNITY: I want to play for you CIA director John Brennan in 2011. He said the idea of a caliphate's absurd. I want to play this for you.

(BEGIN VIDEO CLIP)

JOHN BRENNAN, CIA DIRECTOR: Our strategy is also shaped by a deeper understanding of Al Qaeda's goals, strategy and tactics that we have gained over the last decade. I'm not talking about Al Qaeda's grandiose vision of global domination through a violent Islamic caliphate. That vision is absurd, and we are not going to organize our counterterrorism policies against a feckless delusion that is never going to happen. We are not going to elevate these thugs and their murderous aspirations into something larger than they are.

(END VIDEO CLIP)

HANNITY: It sounds like a pre-9/11 mentality to me. And how do you answer what he said, as Israel got hit with 175 rockets in the last 24 hours? Aren't they pushing for a caliphate there?

CHENEY: Yeah. The thing that's really disturbing, as I listen to that, is that it shows a man who clearly refuses to recognize what has to be crossing his desk as the latest intelligence. He can read the Rand study report. He can listen to what the director of the DIA says, the Defense Intelligence Agency, about a doubling in the size of the terrorist organizations that are out there. He can look at what has happened over the course of the last few weeks as ISIS has moved into and now controls the eastern part of Syria and the northern part of Iraq.

With a man like that advising the president as director of intelligence, it's no wonder the president doesn't understand what's going on out there. It's absolutely--

HANNITY: How do you view the treatment of Israel?

CHENEY: Well, I think the treatment of Israel-- I think there are a lot of nations in that part of the world that deserve to have strong U.S. support, and Israel obviously is right there at the top of the list. But that's true also of the Jordanians and the Saudis and the Emirates and the Egyptians. What Egypt has done by way of overthrowing the Muslim Brotherhood is a master stroke, and we've now got a good man as president of Egypt, capable of military-- a good military. And we ought to be backing the Egyptians to the hilt.

So there are a lot of things we could be doing, including working with the Israelis, to take on the terrorists, the Islamists, the jihadists in that part of the world. It's in our interest to do so. It's not an act of charity. It's our danger (ph) that's threatened. We're the ones that are going to get hit with the next mass casualty attack that potentially kills hundreds of thousands of Americans.

HANNITY: All right, Mr. Vice President, appreciate your insight. Thank you so much for being with us. Appreciate your time tonight.

CHENEY: Thank you, Sean. Thanks for covering it.

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