This is a RUSH transcript from "The O'Reilly Factor," June 20, 2011. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: In the "Personal Story" segment tonight: On June 7, rapper Lupe Fiasco, who is promoting an album, called President Obama a terrorist. Now, we're used to irresponsible statements from rappers, but that's really over the top. So I invited Mr. Fiasco on "The Factor" to discuss it.

(BEGIN VIDEOTAPE)

O'REILLY: What do you mean President Obama is a terrorist?

(BEGIN VIDEO CLIP)

LUPE FIASCO, RAPPER: My fight against terrorism -- to me the biggest terrorist is Obama in the United States of America.

(END VIDEO CLIP)

FIASCO: To put it into context, I was asked about a song that I did called "Words I Never Said," which addresses terrorism.

(BEGIN VIDEO CLIP)

FIASCO (RAPPING): I really think the war on terror is a bunch of bull (EXPLETIVE DELETED). Just a poor excuse for you to use up all your bullets.

(END VIDEO CLIP)

FIASCO: So the statement that I made, which was I believe that the biggest terrorist, Obama, and the United States of America and its foreign policy. That was what the whole, you know, context of everything was. And it was really just an expression of me trying to, I guess, understand critically, you know, this society.

O'REILLY: You know, President Obama is not a terrorist. He's trying to do what he believes is the right thing to do. The United States is not a bad nation. It's a noble nation. We're trying to defend ourselves against people who killed us on 9/11. And then you go out there and you talk to a lot of younger people. And this is what gets me, that your constituency are not exactly political science Ph.Ds, OK? They're impressionable kids.

FIASCO: I don't think that that matters. I don't think you need to have a political Ph.D…

O'REILLY: But they listen to you...

FIASCO: ...to understand -- to understand politics. To understand politics I don't think you necessarily need that. And I don't think that politics are as complex as people like to make them seem or out to be.

Richard Nixon said that, you know, if you -- they reduced fear by reducing the causes of fear. And then in that same interview, which I spoke about, you know, calling Obama a terrorist and every president before and after him a terrorist, right? Is that if you're going to fight terrorism, right? True terrorism, you know, weaponized fear. In defense of ourselves, we're fighting -- actively fighting something else. But if you're going to fight terrorism, to me, you fight the root causes of terrorism.

O'REILLY: The root causes of terrorism are many, OK? They are varied. It depends region to region and all of that. The United States cannot cure ills in the world. What the president of the United States' responsibility is is to protect you and me. That's his responsibility, and he's doing it through aggressive action. So, Navy SEALs killed bin Laden. You OK with that?

FIASCO: With them hunting down a criminal, a person responsible for the deaths, right, of innocent people?

O'REILLY: Yes.

FIASCO: I have nothing wrong with that. Nothing, nothing.

O'REILLY: So when bin Laden got killed, you didn't have any problem with that? That was OK? Legitimate action?

FIASCO: You know what I had a problem with? The war -- the war in Afghanistan.

O'REILLY: OK. You have a problem with the war in Afghanistan.

FIASCO: Let me finish that. The point -- the point of the war in Afghanistan was supposedly to go in and find bin Laden, right?

O'REILLY: No, that's not right.

FIASCO: In the -- well, 9/11.

O'REILLY: Mr. Jaco, look, what you just said is fallacious. That means it's wrong.

FIASCO: It's not fallacious at all, sir. It's not wrong. It's not wrong. The point and the purpose of -- then why did we go -- why are we in Afghanistan if it wasn't to hunt down Al Qaeda and the terrorist network, because it definitely wasn't for any other reason?

O'REILLY: No, that's wrong. I will answer. The reason we went to Afghanistan was to deprive Al Qaeda of a sanctuary. We removed the Taliban government when they wouldn't crack down on Al Qaeda. Now, to get bin Laden, that was another part of the operation, OK?

FIASCO: But it's a part of the operation, sir. But it doesn't -- but that doesn't negate it. That doesn't take it away from the purpose of it, just because it was another part, sir. It's the same. It's the same…

O'REILLY: It gives legitimacy to the war. The war is...

FIASCO: No, it gives -- the legitimate part of it is to go find a criminal, right?

O'REILLY: The legitimate part is to...