TEXT - Interview with Barack Obama

(Reuters) Full text version of Caren Bohan's interview with Presidential candidate Barack Obama on Saturday evening on the flight back to Chicago from London.

Q - You describe your foreign policy as pragmatist. What do you mean by that?

OBAMA: "There's always been a tension in American foreign policy between realism and idealism. When we're at our most effective, we are both concerned with protecting our values and ideals in the world but also mindful of how difficult it is to move societies in particular directions. So we've got to have some humility about what we can accomplish at a given time."

"Iraq is a good example. Prior to the war, if you had asked me, would I like to get rid of Saddam Hussein, the answer is absolutely yes. He's a vicious dictator who invaded other countries, was interested in acquiring weapons of mass destruction, brutalized his own people. And so whatever pressure we could apply to contain him I thought was very important. Realistically I thought that we had very high - our highest priority was staying focused on Afghanistan. And I anticipated a range of problems there. The idealism tell me that we should want to remake Iraq. The realism tells me that we've got finite resources. Iraq is a very complicated society and we should stay focused on finishing the job that is critical to our national security."

Q - How does that apply to Russia?

OBAMA: "Our relationships with Russia and China offer great examples of how we need to balance these concerns. I don't think America should be silent in the face of human rights abuses or problematic behavior, support for regimes like the Bashir regime in Sudan that is carrying out genocide. I think we should be a voice on the international stage for promoting these ideals and values but on the other hand, we have to get Iran to stand down on nuclear weapons. That is a very, very high priority for our own safety and security, for the safety and security of the region, for the safety of our ally Israel. It's going to be very hard to pressure them effectively if we don't have China and Russia on board. So we may not be able to do everything all at the same time. We've got to pick and choose our priorities on foreign policy, just as we do on domestic policy.

Q - You've expressed admiration for some aspects of the first President Bush's foreign policy. Could you elaborate on that?

OBAMA: "I think they managed the end of the Cold War with extraordinary sophistication that could have gone wrong in all sorts of ways. They didn't overreach. They understood that you couldn't spook the Russians or be unnecessarily provocative during that time. As the Soviet Union was unwinding, you had to coax them into permitting more freedom and not acting rashly. They understood the absolute priority of securing those nuclear weapons and worked with people like Dick Lugar and Sam Nunn to secure those weapons effectively. They were very hard-headed but also worked very diligently in terms of rounding up our allies. Nowhere was that clearer than in the Gulf War - a war in which not only did we meet our goals efficiently and with relatively low casualties but our legitimacy on the world stage was never challenged and where other countries carried such a significant burden that it almost cost us nothing.

"You contrast that with this Iraq war and I think the first Bush administration made a lot of very good choices."

Q- You said Iran should not wait for the next U.S. president to make a deal on its nuclear weapons and you praised the Bush administration's decision to send Bill Burns to the Geneva talks. Am I reading too much into it or were you expressing solidarity with the Bush administration and do you think there could be progress before Bush leaves office.

OBAMA: "Yes. I thought I made that explicit. I want the Bush administration to be successful in working with the Europeans to get Iran to stand down on its nuclear weapons. I don't think it's an acceptable outcome. I have said that tough, direct diplomacy with the Iranians should be part of the toolkit that we use in getting them to stand down. The fact that the Bush administration has moved in that direction is something I have been advocating for some time. I think it's a positive development and I want them to be successful.

Q - So you think it's substantive?

OBAMA: "Absolutely. Bill Burns is a very serious guy. And the Iranians should take that gesture seriously."

Q - You say Afghanistan is the war the United States has to win. What does winning mean in Afghanistan?

OBAMA: "I think our goals have to be very modest but they will still be very difficult to meet. We should want a functioning Afghan government that can maintain its own security and territorial integrity. We want to be helpful in moving the development process along in Afghanistan so that the Afghan have greater opportunity and prosperity but our highest priority is making sure that the Taliban and al Qaeda can't continue to use that region from which to launch attacks around the world.

If we have routed them and scattered them, that would be success."

Q- There's always sensitivity about talking about private meetings but what are your impressions of Maliki and Karzai?

OBAMA: "I think that both of them are obviously working under the most difficult possible circumstances. And I think that they have worked well with the coalition forces in their respective countries. I think Maliki has made some tough choices, particularly going into Basra and Sadr City to disperse the Shia militias.

I'm glad to see that he is eager to take more responsibility for his country's own security. And I think he recognizes that the Iraqi government both has to become more efficient and more inclusive. Whether he understands the degree to which that has to happen, how important that is in order for him to achieve the goals he set for himself, I can't tell. We didn't have a long enough discussion to explore all those issues.

"I think President Karzai is a very smart and charming person. And I think that the vision he has for Afghanistan long term has a lot of good elements but I think it was very important for the Afghan people to feel as if this federal government is delivering for them and right now they are not seeing that. I told President Karzai that I thought that he needs to really focus on issues of corruption and counternarcotics and to counter the narcotics trade much more aggressively than has been done so far. "

Q- What do you think of the job that Ben Bernanke is doing in handling the financial crisis?

OBAMA: "I think that Chairman Bernanke was handed a pretty tough hand and I think some of the decisions he's made have been the right ones. I think it's very hard to second-guess every single decision that has been made because this is a huge, complex economy and the Fed is just one actor among many who have enormous influence on the U.S. economy or for that matter the global economy.

I'm going to be convening a meeting of my top economic advisers on Monday, including Paul Volcker, Warren Buffett, Bob Rubin and a range of others to talk about these issues in depth. I think it's very important for the next president to get the long-term fundamentals right. The things I've talked about during the course of this campaign like a new commitment to energy independence, fixing our health care system, rebuilding our infrastructure but also that we think through what the right mix of transparency measures are needed in order to give the market confidence again."

Q- Is this being planned because the housing bill has now passed and you want to look forward to the future?

OBAMA: "Yes."

Q - Will there be new proposals out of the meeting?

OBAMA: "This will be a first step in a series of meetings and proposals that we'll be presenting during the remainder of this campaign."