The real story about the war in the Middle East, that is the subject of this evening's Talking Points memo. Pull up a chair and listen to this.

Secretary of State Colin Powell will meet with Ariel Sharon, and Israel will begin pulling back its forces. That's my prediction. This whole Powell visit has been a secretly orchestrated dance. The Bush administration knows that Israel is fighting terrorism, and it agrees with that fight.

So Sharon is being given some extra time to capture as many terrorists as he can, and inflict punishment on the Palestinians so they will remember that there is a price to be paid for supporting terrorists.

This military strategy is as old as civilization. The Roman legions used it, the Northern armies used it in the Civil War, the Axis powers used it in World War II. The message is simple. For every one of ours that you kill, you lose 10, or 20, or 100. That is the brutal truth of what is going on here.

Israel is totally dependent on America, so it will have to stop its military offensive soon or risk the loss of money and equipment that we provide, and we provide billions.

While it is true that Israel is fighting terrorism, the collateral damage on the Palestinian civilian side is tremendous. In effect, Israel is fighting terror with terror. The ethical problem here is that Israel does not seem to have much choice but to inflict pain on the Palestinians.

There is no question that their leadership encourages attacks on Israeli civilians, no question about that. And the population seems to support that choice.

So President Bush is giving Sharon some room to make his point and perhaps protect his people. But soon Sharon will have to order a pullback so as not to embarrass Bush and America.

Americans themselves must make a mistake. They do make a mistake if they take rigid sides in this fight. Both the Palestinians and the Israelis have done wrong. There is no black and white in the situation.

I believe that Israel is the more reasonable of the two sides and the more moral. But the Israelis can be brutal and unfair. They see this as a fight for their survival, and that mindset justifies a lot of carnage.

In the end, the USA will continue backing Israel, as the Arab world has become increasingly irrational and anti-American. Fundamentalist Muslims have power, and they are our enemies, as well as the enemies of Israel.

So we have common ground with the Israelis, administration that is the reason we tilt in their direction.

But make no mistake about it. Both sides have caused this war, and it will take both sides to end it.

And that's the memo.

The Most Ridiculous Item of the Day

The Federal Aviation Administration is a disaster, in my opinion. That agency allowed the skies to become dangerously crowded in the late '90s, oversaw the lack security at the airports that aided the terrorists, and is generally full of apathetic and incompetent boobs.

Not everybody, but a lot of them. Hey, this is a no spin zone.

Anyway, last month the FAA mailed out a newsletter featuring an editorial calling for the 9/11 terrorists to be brought to justice.

Wow.

Groundbreaking analysis, and we paid for it. Problem is, they sent the newsletter to Ziad Samir Jarrah, one of the dead hijackers. A spokesperson for the FAA says she doesn't now how that happened, but we do. The FAA is ridiculous.

— You can watch Bill O'Reilly's Talking Points and "Most Ridiculous Item" weeknights at 8 & 11p.m. ET on the Fox News Channel. Send your comments to: oreilly@foxnews.com