This is a rush transcript from "Special Report with Bret Baier," July 16, 2018. This copy may not be in its final form and may be updated.

BRET BAIER, ANCHOR: This is a Fox News alert.

President Trump and Russian leader Vladimir Putin have concluded their summit in Finland. Shortly after, it wrapped up. "Fox News Sunday" anchor Chris Wallace had an exclusive one-on-one interview with the Russian president.

Here is that exclusive interview in its entirety right now.

(BEGIN VIDEOTAPE)

CHRIS WALLACE, ANCHOR: President Putin -- thank you for speaking with us. I am going to get to some specifics about the summit in a moment, but let's begin with the big picture.

President Trump said in his news conference that our relationship has never been worse but that changed a few hours ago. How has the relationship, big picture, between the U.S. and Russia changed today?

RUSSIAN PRESIDENT VLADIMIR PUTIN (through translator): Primarily, I think we should be grateful to our staff and our aides who spent several months working with one another and not just in the preparations of this summit.

I'm referring to the effort of our agencies across the board who worked in even the very sensitive areas, sensitive both for Russia and the United States. Primarily I refer to the counterterrorism efforts.

Today talking with President Trump, we agreed that terrorism is the greatest threat than it seems at first. Because God forbid if something happens, if there is a direct attack using the weapons of mass destruction -- if they get weapons of mass destruction -- it may have a devastating ramifications.

So our military, our special agencies do establish cooperation in this particularly important area. A case in point would be our cooperation in Syria. Although there are some understanding missing to some extent, especially in terms of broader picture but this cooperation is going on between the military, between the special services. That is our counterterrorism effort in the general sense of the word.

But then in 2021, the New START treaty is about to expire, so what are we going to do next? I reassured President Trump that Russia stands ready to extend this treaty, to prolong it, but we have to agree on the specifics at first because we have some questions to our American partners. We think that they are not fully compliant with the treaty, but this is for experts to decide.

We also discuss the Iranian nuclear program. We discussed what we can do to improve the situation with North Korea. I pointed out and I will point out again that I think that President Trump contributed a lot and he did a lot to settle this issue.

But in order to achieve complete denuclearization of the peninsula it will take international guarantees. And Russia stands ready to make its contribution to the extent what will be necessary.

So we can say that there are several issues of crucial importance for us. Based on some others we are starting to achieve some understanding, which gives us sufficient ground to say that some things -- a lot of things change to the better during today's meeting.

WALLACE: But do you see this summit as a turning point, and end of the effort by the West in recent years to isolate Russia?

PUTIN: I think you will see for yourself that this effort failed and they were never bound to succeed. I mean take a look at the scale, the sheer size of it, the importance of it in terms of international security and the economy, its contribution to the global energy market. It's too big to be sanctioned and isolated.

Speaking of the things that do unite us though, and the things that require our joint efforts, it brings us to the idea that such attempts to fight one another should be ended and rather look for ways to address common differences -- to address common issues and challenges; how to overcome this -- how to address this common concerns.

So I think this is the beginning of the path. This is a start. We did make a good start today.

WALLACE: Mr. President -- one of the issues that is standing in the way of more progress, as you know, are the allegations of Russian interference in the U.S. election. You have repeatedly said, and you said again today that this was not the action of the Russian state, that if it was anything, it was patriotic Russian individuals.

I have here the indictment that was presented on Friday from the special counsel Robert Mueller that says that 12 members of Russian military intelligence, the GRU, and they talk specifically about units 26, 165 and 74-455. They say -- you smile, let me finish -- they say that these units were specifically involved in hacking into Democratic Party computers, stealing information, and spreading it to the world to try to disrupt the American election.

May I give this to you to look at, sir? Here.

PUTIN: Well, let me start answering your question with something a little bit different. Let's have a look at it this way. People are talking about interference of Russia with the election process in the United States.

I have mentioned this in 2016 and I want to say it now again and I really wish for your American listeners to listen to what I say.

First of all, Russia as a state has never interfered with the internal affairs of the United States, let alone its elections.

WALLACE: But sir, this is the indictment. It shows -- I have 12 names here. It talks about specific units of the GRU, Russian military intelligence. Is the GRU not part of the Russian state?

PUTIN: I will get to it. Just have a little bit of patience and you will get a full answer to your question.

Interference with domestic affairs of the United States, do you really believe that someone acting from the Russian territory could have influenced the United States and influenced the choice of millions of Americans?

WALLACE: I'm not asking if they influenced -- I'm asking whether they tried.

PUTIN: I'm about to answer. This was the first point that I'm trying to make.

WALLACE: If you have some patience, you will hear the entire response.

I said this in 2016 and I say it now -- the idea was about hacking an e- mail account of a Democratic candidate. Was it rigging of facts? Was it some forgery of facts? That's the important thing that I'm trying -- point that I'm trying to make. Was there any false information planted? No, it wasn't.

These hackers that are being discussed -- I will get back to it, just bear with me for a moment. As we're getting told, they hacked a certain e-mail account and there was an information about manipulations conducted within the Democratic Party to incline the process in favor of one candidate and as far as I know the entire party leadership resigned.

They admitted the fact of their manipulation, so that's one thing. Manipulation of the public opinion should stop and an apology should be made to the public at large --

(CROSSTALK)

PUTIN: -- instead of looking for those responsible or the party at fault.

And now to the mentioned things -- As I said in the press conference --

WALLACE: But Mr. President, may I just say, you are indicating that they stole real money, not counterfeit money. So are you saying it's ok because of the fact that they took from the DNC, from John Podesta. It was their real e-mails, so it's ok to hack and spread this information out and interfere with the election?

PUTIN: Listen to me, please. The information that I am aware of, there's nothing false about it. Every single grain of it is true and the Democratic leadership admitted it, first point.

Now the second point, if you don't like my answer, you can give it to me straightaway, and I'll just keep silence. And if you want Americans to listen to my opinions could you just wait for a little bit?

And now for the specific accusations. First of all, special counsel Mueller has accused a certain private company in Russia that is not even a very big enterprise. The core area of competence is a restaurant. And now this company hired American lawyers and defending its integrity and reputation in American court.

So far, American court has not discovered any trace of interference whatsoever. Do you know it or not? Millions of Americans know about it.

And now do the individuals from the indictment act. We with the United States, we have a treaty for assistance in criminal cases, an existing treaty that exists from 1999. It is still in force and it works efficiently. Today I referred an example of its sufficient work.

(CROSSTALK)

WALLACE: And I'm not trying to interrupt --

PUTIN: Why would Mr. Mueller --

WALLACE: I'm not trying to interrupt -- be disrespectful --

PUTIN: Well, let me finish. Just let me finish. You are trying to interrupt but I will finish. Why wouldn't special counsel Mueller send us an official request within the framework of this agreement? Our investigators will be acting in accordance with this treaty. They will question each individual that American partners are suspected of something.

Why not a singular request was filed? Nobody sent us a single formal letter.

WALLACE: Let me just say, I don't want to interrupt. And I want to ask one question -- I'm trying to move on to other subjects.

Why do you think Robert Mueller issued this indictment three days before you and President Trump met here at the summit?

PUTIN: I'm not interested in this issue a single bit. It's the internal political games of the United States. Don't make the relationship between Russia and the United States -- don't hold it hostage of this internal political struggle.

And it's quite clear to me that this is just an internal political struggle and it's nothing to be proud of for American democracy to use such dirty methods and political rivalry.

WALLACE: Do you think they were -- do you think that Mr. Mueller is trying to sabotage the relationship?

PUTIN: I don't want to make any assessments about his operation. It is for Congress that appointed him to do this, to assess his performance. And I think court actually had some doubts about the due procedure about appointing special counsel Mueller to the post that he now held.

I think that American court now believes that it was done stand with the infringement of the American legislation, but that's none of my business. Please address it to yourself.

(CROSSTALK)

WALLACE: Actually, Congress didn't appoint them. The Justice Department did.

(CROSSTALK)

WALLACE: May I move on, sir? I thought the news conference today, my opinion was a bit curious because President Trump spent more time criticizing the Democrats and asking about the Democratic server than he did in criticizing Russia and asking about the GRU.

There are many theories in the United States about why President Trump is so reluctant to criticize you, and I would like to ask you about a couple of them. One is that you have something on him -- kompromat.

The other is that as a skilled politician and a former KGB officer, you know how to play him. You use phrases like fake news and deep state. And my question is, do you find President Trump easy to deal with?

PUTIN: Well, the first point I'm about to make is why did we talk about like polite people? Why should this come as a surprise? Was it worth going all the way to Helsinki, going through the Atlantic to just insult one another? It's not exactly the diplomatic standard in the world.

There's no need to go and meet personally if you just want to insult another person. We met to try to find a way for improving our relationship and not aggravating it or destroying it completely.

The second part of the answer is whether we have something on him. We don't have anything on them and there can't be anything on them. I don't want to insult President Trump when I say this, and I may come as rude. But before he announced that he would run for presidency, he was of no interest for us.

He was a rich person, but there is plenty rich persons in the United States. He was in the construction business. He organized the beauty pageants, but it never occurred to anyone that he would think of running for president. He never mentioned his political ambitions.

It sounds like it's an utter nonsense. I just mentioned this in the press conference. St. Petersburg Economic Forums was visited by 500 businessmen. Pretty much every one of them is a major industrialist tycoon on a greater scale than President Trump.

Do you think that our special services actually organize surveillance on each and every of them? Well unlike you and unlike like the United States, we don't do this. We don't have enough resources. We don't have enough manpower to organize the total state of control.

That's not part of our plan and it's clear that we did nothing of that kind against Mr. Trump.

WALLACE: I would like to ask you a couple of specific questions about NATO. If NATO were to move to add either Ukraine or Georgia to the alliance, how will you respond?

PUTIN: Well, negatively. The situation around NATO is going along those lines. I have a pretty clear understanding of how their decisions are made. I know about the consensus rule, but before the consensus-based decisions are made on the organization-wide basis, there is an opportunity for bilateral contacts with member states which was done with Poland, with Romania, which now station and deploy elements of the strategic anti- missile defense of the United States for us to want to direct an immediate threat for our national security.

So according to -- moving this NATO infrastructure towards our borders would be a threat and the reaction would be extremely negative.

WALLACE: Secondly, there are two major NATO exercises later this year -- Anaconda and Trident Juncture. Did you and President Trump discuss those? And did he give any indication, as he did with Chairman Kim of North Korea, where he agreed to stop participating in war games? Did he give any indication that the U.S. might not participate in these two NATO operations?

PUTIN: No. We haven't brought this issue up although it is a concern for us since NATO is expanding its infrastructure and facilities, the number of servicemen is on the rise in the regions where they shouldn't be. They increase the manpower to the tune of 10,000 people.

This is in compliance to the treaties between Russia and NATO and this is a destabilizing factor which we have to factor in, but we haven't mentioned this today with President Trump.

WALLACE: I want to ask you about Russia's involvement in Syria. According to independent monitors, since the civil war began in 2011, more than a half a million people have been killed and Russia has bombed civilians in Aleppo and Ghouta. No qualm about killing innocents?

PUTIN: You know, when there is warfare going on -- and this is the worst thing that can happen for the humankind, victims are inevitable. There will always be a question who's to blame.

I think it is the terrorist groups who are to blame, who destabilize the situation in the country -- the ISIS, the Jabhat al Nusra and the like. Those are the true culprits.

And that's exactly the answer that American military give us when they hit military -- civilians object in Afghanistan or other countries. And it might seem dubious to some people, but in fact it is true. In terms of Syria, America aviation bombed the city of Raqqa, bombed quite heavily, and today we discussed the need for humanitarian operations to be put in place, and I hope we'll make progress in this area. We would really like for the plans that we discussed today to be carried into life.

WALLACE: But the U.N. commission that is investigating Syria says, and I quote their words, there was deliberate targeting of civilians by Russian pilots flying SU 24 and 34 military aircraft.

PUTIN: All of it can be verified and assessed, but I just want to get back Raqqa.

WALLACE: You can't talk about Aleppo and Ghouta?

PUTIN: Well, we can discuss both, but should we also throw in Raqqa for good measure? We shouldn't take things out of the context and completely forget about others.

WALLACE: I don't think that there has been the bloodshed in Raqqa that there was, the hundreds of thousands of people that were killed in Aleppo and in Ghouta and in the entire civil war, half-a-million people. By some estimates, 20,000 children have been killed by the Assad regime and his supporters in Moscow. Are they terrorists?

PUTIN: You are completely deceived and I'm very sorry that you do not know the real situation about Syria. A huge proportion of civilian population of Raqqa died. It was erased from the face of the earth. It reminds Stalingrad from the World War II, and there is nothing good about it. And I reiterate, the blame is on those individuals who take guidance from those terrorists and use the civilian population as its hostages.

WALLACE: At the G-7 summit, President Trump reportedly told the other leaders that Crimea might as well be Russian because everybody there speaks Russian. Did he give you any indication that at some point, not today, but at some point he might recognize Russia's annexation of Crimea or lift sanctions, or move to bring Russia back into the G-7, now the G-8, all of which happened as a result of the annexation of Crimea?

PUTIN: First of all, I would like to make a correction. The joining of Crimea to Russia is not an annexation. In democratic governance, the free manifestation of a person's will is a referendum, and the people of Crimea went to referendum and voted for joining Russia. If this is an annexation what is democracy then?

Secondly, we are aware of President Trump's posture that Crimea is part of Ukraine. He told me this today. I responded with the words pretty much similar to what I said to you, and I think we should leave the discussion at that.

WALLACE: All right, we are running out of time anyway. Let's move on.

Last year, Defense Secretary Mattis said that Russia is the greatest threat, Russia is the greatest threat to the United States, and he has since made it clear, an even greater threat than terrorism. In March, you introduced a new generation of Russian missiles, including what you called in invincible missile you said that could evade, defeat all of our missile defenses, and you even released a video that showed the super missile flying over the United States and hitting Florida very near where President Trump's estate is at Mar-a-Lago. Aren't you escalating the arms race, and aren't you being deliberately provocative?

PUTIN: As far as the footage is concerned, they did not specify that the missile is about to hit the United States. You have to look at it more carefully. Secondly --

WALLACE: It shows Florida.

PUTIN: There was not sign Florida. There was not a caption saying Florida. Take a more careful look at it. It was never a caption Florida.

WALLACE: No, but you can see it on the map.

PUTIN: It was clear it was flying over the eastern coast of -- no, no, no it couldn't be seen on the map. Just take a closer look. And I'm not trying to scare your population with make believe threats. I'm pretty sure I can give you as a present this footage.

And now to the offensive weapons. They were not born out of nowhere. They were born as a response to the unilateral withdrawal of the United States from the ABM treaty. From the very beginning we've been warning our American counterparts that we aren't going to join the global antimissile system, we see no purpose for it, but we'll do everything to have means to overcome it.

Well, the response of our counterparts was that the United States designed this antimissile defense system because it is not designed to be guided against you. In 2003 or 2004 I think I mentioned one of those systems, and there was no response from our American counterparts. So what we did now, we just demonstrated that we do have means to overcome the system. It's just a negotiating item. I do hope that in terms of strategic stability, we will be able to find a mutually acceptable solution for both sides, and that applies to the INF treaty under the intermediate and shorter range missiles as well.

WALLACE: I have limited time. I'd like to ask you about the alleged INF violation, but I want to move on and ask you three final questions about Vladimir Putin. When you were first elected in the year 2000, you were portrayed as a democratic reformer. You talked about the value of European culture, and you did not even rule out coming apart of NATO. What happened?

PUTIN: Nothing changed about me. I am the way I am. I am the way I was. I was elected the president of the Russian Federation as an adult man. And in this age, your preferences, beliefs and attitudes towards life does not change that much, but we have to react to what's going on around us.

Take the NATO expansion to the east. When the Soviet Union was withdrawing troops from Germany, Russians should know -- we were told that Russians should know one thing, that NATO would never extend beyond the German borders. Within two ways it happened. Despite our principal posture, nobody gave a damn about our posture.

We didn't want the United States to withdraw from the ABM treaty, but they did despite our request not to do it. All the requests were denied. And the examples abound. Take the events in Yugoslavia. You know that President Yeltsin was completely against this conflict, and the only legal way to use the force is through the sanction of the Security Council of the United Nations.

Examples abound, examples of events that deteriorated the status of our relationship. Or take the application of U.S. legislation extraterritorially beyond its borders. It was not us who made these steps. You asked me about Crimea, you asked me about Ukraine. It was not us who organized a military coup in the country that completely ignored the constitution. It was not us who given prize on the city squares. It is not the way to deal with such issues, and when it happened, it happened exactly by our border. So nothing happened to me. What happened to you is what I want to know? What happened to the west?

WALLACE: You say nothing happen to you, but I need to ask you, domestically, not internationally, domestically inside Russia, why is it that so many of the people that opposed Vladimir Putin end up dead or close to it? Former Russian spy and double agent Sergei Skripal, the victim of a nerve agent attack in England. Boris Nemtsov, a political opponent, gunned down near the Kremlin. Investigative reporter Anna Politkovskaya murdered in an apartment building. Why is it that so many people who were political enemies of Vladimir Putin are attacked?

PUTIN: Well, first of all, all of us have plenty of political rivals. I'm pretty sure President Trump has plenty of political rivals.

WALLACE: But they don't end up dead.

PUTIN: Not always, well, haven't presidents been killed in the United States? Have you forgotten about it? Has Kennedy been killed in Russia or in the United States? Or Mr. King? And what happens with the clashes between police and civil society of several ethnic groups? That's something that happens on the U.S. soil. All of us have our own set of domestic problems.

But going back to what happened in Russia, yes, we do have crime, and, unfortunately, there are some crimes. And to some extent Russia's statehood is maturing. And there are some side effects, and we prosecute people responsible for these crimes. But since you have mentioned the Skripal case, we would like to get at least some sort of a document and evidence about it, but nobody gives it to us. It's the same thing as the accusations with meddling in the election process in America. We've recently heard that two more people suffered from the same nerve agent that is called Novichok. I have never even heard the last names of these persons. Who are they?

WALLACE: Supposedly they picked up the bottle that was used to attack Skripal. May I ask you one last question, sir?

PUTIN: No, no, let us seal this issue first. What kind of package, what kind of bottle, what is the chemical formula? Who got it? Or maybe there are other reasons, maybe reasons within the United Kingdom, but nobody wants to look into these. Now we just see the ungrounded accusations. Why is it done this way? Why our relationship should be made worse by this pretense? We have to build them with the U.K. as well.

WALLACE: Finally, I know one of the reasons he wanted to do this interview was so that people in the United States and the west could get a better understanding of the real man. You are often portrayed as a strong man, and autocrat, a person who is a symbol of Russia's strength. Are those fair characterizations of you, sir?

PUTIN: I'm not laying claim to be this kind of a strong man that I am being portrayed. But from the point of view of legal symbols, flag, all of them symbolize the country. And it's the same for any country. The anthem, the national flag, and the institute of the presidency, they portray Russian values and what it's ready to go for, what it's ready to stand for in order to build a relationship with such a great country as the United States.

I've mentioned economy before and I mentioned this fact to President Trump. Let's look at our market, for instance. Europeans sell hundreds of billions of dollars worth and about 1,500 billion Euro of services. The number for China stands at $57 billion. And what about the United States? It's $12 billion for the United States and $5 billion worth for services. So that's the direct result of these policies, including the sanctions.

In fact the United States have driven off their companies from the Russian market, so they left, and this vacuum was filled by their rivals, their competitors. Some of them lost their investments. What was that for? We are interested in developing our relationship in the area of security, of strategic stability, economic challenges, strategic challenges, and any other challenges that we have. I think that today with President Trump we made the first step in this direction.

WALLACE: Mr. President, thank you. Thank you for talking with us.

PUTIN: Thank you.

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