This is a RUSH transcript from "The O'Reilly Factor," July 9, 2010. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: Now for the top story tonight: If Sarah Palin were president, could she solve the illegal immigration problem? When I spoke to the governor last night, that was the big question.

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(BEGIN VIDEOTAPE)

O'REILLY: So you're president of the United States, Sarah Palin. You send how many National Guard to the border right away to secure it?

SARAH PALIN, FORMER GOVERNOR OF ALASKA: However many you need. This is a top priority. This is a national security issue.

O'REILLY: All right, but I'm talking Texas, California, New Mexico, all of them. So you'd send maybe 10,000, 15,000 National Guard down there to assist the Border Patrol, yes?

PALIN: Whatever it takes. Whatever it takes.

O'REILLY: All right, so you'd militarize the border. You'd finish the fence, finish building the fence from Brownsville to San Diego, yes?

PALIN: Yes.

O'REILLY: Now we have 12 million people staring at you. And you say to those people you're in here illegally; you broke civil law by coming in here. Now are you going to deport them? What are you going to do?

PALIN: Well, again, first, let me go back to the importance of securing the border. They're talking about amnesty…

O'REILLY: No, but we got that, governor. Everybody…

PALIN: No, we don't.

O'REILLY: Yes, the people watching this program have it. We have it. We assume that you, as president, would secure the border. I have confidence that you would do that. But now you have to look inward, all right? And you've got 12 million people staring at you. What are you going to have them do?

PALIN: You're not going to give them a free pass. You're not going to say, OK, you and anybody else who wants to scurry across this porous border between now and when we finally do finally get it fenced in and physically secure, we're going to give you a free pass.

O'REILLY: All right.

PALIN: And just because you've broken law in the past…

O'REILLY: So no amnesty.

PALIN: …we can trust you. No, no amnesty.

O'REILLY: But what do you do with these folks?

PALIN: Which means…

O'REILLY: Do you make them register with the federal government? Do you tell them they have 60 days to get out of here before we put you in jail? What do you do with them?

PALIN: Do we make them register with the federal government? Yes, we do.

O'REILLY: Yes, so we know who they are.

PALIN: We have -- exactly, yes. I want to answer to that question absolutely.

O'REILLY: All right.

PALIN: We're not going to give them a free pass.

O'REILLY: So you make them register with the federal government.

PALIN: We're not going to reward the bad behavior.

O'REILLY: And if they don't register with the -- say you gave them 60 days to register with the federal government. There's a form at the post office they have to send in like a Census form. All right, say they didn't do it.

PALIN: You deport them.

O'REILLY: OK.

PALIN: You have to get them out.

O'REILLY: So the ones that don't…

PALIN: We don't reward their continued bad behavior.

O'REILLY: …after period of time. OK, after a period of time…

PALIN: Yes.

O'REILLY: …the ones that don't cooperate, you catch them, they're gone.