This is a partial transcript of Special Report with Brit Hume, August 21, that has been edited for clarity.

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BRIT HUME, CO-HOST: When terrorists strike in Iraq (search) and almost simultaneously in Israel (search), it is time to talk to Dennis Ross, the man who represented the last two presidents in that part of the world and who is now a FOX News contributor and analyst.

Dennis, welcome. Nice to have you.

DENNIS ROSS, FMR. U.S. ENVOY: Nice to be here.

HUME: Kofi Annan (search) said today, it was interesting to hear him say that…say that more countries needed to do more. He would urge more countries to do more in Iraq. The French and Germans didn't sound, at least initially, very amenable to that. But how important is it to have Annan making those noises in the aftermath of this atrocity in Baghdad this week?

ROSS: I think it is tremendously important from at least two standpoints. One standpoint is just to send a signal that there's not going to be an intimidation factor. Part of the purpose of those who did this was to drive everybody out who's interested in helping in reconstruction. The U.N. (search) is helping this in that regards.

But the U.N. also does create a certain umbrella of legitimacy. So when Kofi Annan says A, we aren't going to be driven out and B, we want to stay committed to this, I think it sends a very important signal. And it probably also bolsters those within Iraq and in the Arab world, more generally. Since the U.N. is a more generally acceptable symbol than we are, it is also a reminder that there is kind of international consensus that Iraq needs to be reconstructed.

HUME: Is there a need now in order to get this cooperation? Is the United States going to have to cede authority to the U.N., in your judgment, or might that not be necessary?

ROSS: My guess is we're going to have…we're going to have to find some way to reconcile what is a need for other, like the Pakistanis or Indians, or the Turks, perhaps to say there is a U.N. umbrella. Does that mean we have to cede some authority? Maybe a little bit. Maybe we can't keep complete control over everything. But I think it's worth finding some ways to compromise on this because the more we can spread the responsibility, the better it is going to be.

HUME: Paul Bremer said this week that Syria was continuing again or started again allowing terrorists to infiltrate across the border into Iraq. Iran has done so. What about Syria though? That seems to be worrying more people now than ever. What is Syria's percentage in this and how likely is it, do you think, that Syrian infiltrators are making a serious contribution to this mess there?

ROSS: I don't think the Syrians have a great stake in this. I mean at an earlier point, they might have felt if they were going to be the next target, they didn't mind if the U.S. was consumed within Iraq. When we put some pressure on Syria in the immediate aftermath of the war, then you saw the Syrians immediately try to respond to us.

I think right now they feel we're not paying so much attention and basically a border that has always been rather porous, especially that relates to smuggling, is something that they've pretty much turned a blind eye to.

Can we influence the Syrians? I think we can. I think we have to make it clear they have to do everything they can to ensure that nothing crosses their border. And if we do, I think they'll be responsive.

HUME: Now, Israel and the Palestinians. How precarious is that situation now in light of what's happened in the last few days. Did that bomb…bus bomb, in effect, blow the Roadmap out of the water, to mix matters for us horribly.

ROSS: Well, I think it's pretty close. If it hasn't, it's pretty close. I mean the fact of the matter is even before this was done, we had more of a relative cease-fire than we had a real peace process. I say that because, in effect, neither side was really fulfilling what they were supposed to be doing under the first phase of the Roadmap.

On the Palestinian side, of course, the focus was supposed to be on security. They had a truce that was basically a substitute for what they were supposed to be doing in terms of disarming these groups.

HUME: You mean they had a truce…the Palestinian authority had a truce with Hamas?

ROSS: They had a truce with the groups with regard to their not carrying out attacks against Israelis. There was an understanding. In return for that, though, they weren't making arrests or dismantling their capabilities. And their rationale was give us time to build our credibility among the Palestinian public. And at a certain point when we show that we're delivering, then we're able to use our leverage with these groups.

Now what's happened is that with Hamas and Islamic Jihad breaking the truce, the cease-fire, demonstrating that they wouldn't fulfill it, crossing any conceivable red line, the fact is, now the Palestinian authority has to make a choice. This is a moment of truth for Abu Mazen.

For him, he needs help from the Arab world. To ask him to do this totally on his own is pretty difficult. We need…we need Hosni Mubarak, we need King Abdullah, we need Crowned Prince Abdullah, we need President Bin Ali. We need a collective group of Arab leaders to say what Hamas did was wrong, they are a threat to the Palestinian cause, they will kill Palestinian interests. The only hope for a Palestinian state is to act against them. We support Abu Mazen in this effort. And they needed to go at the same time to Yasser Arafat and say don't block what Abu Mazen must do.

HUME: Now, it was reported last night that the Palestinian authority, under Mazen, were on the verge of declaring all-out war on Hamas, Islamic Jihad or whatever other groups were involved. That was awaiting the approval of Yasser Arafat. Does anybody know what became of that idea? Or was it simply made moot by the fact that the Israelis came storming in?

ROSS: No, I think what happened was last night they went to him. And the purpose was to make him responsible as well, so they're not the only ones. And what they sought from him was the approval to allow all of the forces of the Palestinian security apparatus to be coordinated now and under one control. Meaning Mohammed Dahlan, the minister of security. He said no. The sole purpose of doing that was to basically ensure that they came to so they could confront Hamas (search) and Islamic Jihad (search).

HUME: So we get down to it again, a critical moment of truth and there at the center of the equation is old Yasser himself.

ROSS: He knows one word very well and that word is no.

HUME: So where do you go from here? You hope for the other countries to get involved. What do you think the chances are at this stage?

ROSS: It will only happen if we insist on it. I think we basically have to say we cannot pursue a process that is guaranteed to fail because Yasser Arafat will undermine it, or Hamas will undermine it. Right now, we know that Hamas Islamic Jihad betrayed their commitment to preserve a cease-fire. Which in the case of the Egyptians, they brokered.

HUME: Got you.

ROSS: So right now, we have to get them to go.

HUME: Dennis Ross, great to have you. Thank you.

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