This is a partial transcript from Your World with Neil Cavuto, December 16, 2003, that was edited for clarity.

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NEIL CAVUTO, HOST: If France and Germany are budging on forgiving debt, should we be budging on giving them contracts? My next guest says no way. Nevada Sen. John Ensign (search) joins me now from Las Vegas.

Senator, thank you for coming.

SEN. JOHN ENSIGN (R-NV), ARMED SERVICES CMTE.: It's good to be with you, Neil.

CAVUTO: So even with their budging you are not budging?

ENSIGN: Well, I thought that we should have had - half of the aid going to rebuilding Iraq should have been in the form of loans in the first place. And if we would have done that, we could have had that leverage to use against France and Germany right now, saying, hey listen, we'll forgive the debt, basically, the loans that we are giving Iraq when you forgive. And then we wouldn't have had to get into the idea of the contracts. The contracts should be for those countries that have helped us. Think about Jordan. Here's a country in the Middle East that has taken great risks with - it is an Arab country, surrounded by Arab nations, or Kuwait or Qatar or whatever you - whichever one of those countries you want to point to, shouldn't they have an advantage over countries like Germany and France, who I believe not only didn't help us in the war but actively opposed us.

CAVUTO: But let's say now, Senator - let's say now they all but acknowledge that, realize the error of their ways and say, all right. In France's case I think it is $3 billion in debt that they are owed, that's just principal, we'll let it slide. And we want to make a step in the right direction. Would you then allow them to at least bid on some of these contracts?

ENSIGN: Well, I think that maybe if they forgave 100 percent of their debt. But they are not talking about forgiving their debt, they are talking about restructuring.

CAVUTO: So it is a matter of degree to you, right, not just a little bit but, the whole enchilada, you are open to it.

ENSIGN: The whole enchilada, I would be open to it. And I think that the administration is working toward that end and I support them in their efforts for doing that. France and Germany and many other countries, they didn't just sit on the sidelines. It wasn't a question of them not just participating. They actively were leading the efforts against the United States in liberating Iraq. And I - so I don't think that they should share - unless they are willing to make some sacrifices, I don't think that they should share in the contracts.

CAVUTO: Now it is interesting the timing of some of these concessions, Senator. I think, as you intimated, that the capturing of Saddam Hussein over the weekend, and you were not too far from there when this was announced. From your visit to Tikrit and elsewhere in Iraq what was your sense of the Iraqi people and whether they are now more inclined to think of us as liberators?

ENSIGN: Yes, I actually was fortunate enough to be in Baghdad when I heard the news, and a couple of hours later I was up in Tikrit, getting briefed by the major general of the 4th ID who ran the operation, about a half an hour before Paul Bremer (search) made the announcement, so it was an exciting time. You can imagine what our troops were doing, they were celebrating. But all over the country, gunfire was going off, not after Americans, but in celebration. There was celebration in the streets, everywhere. I met with some Iraqis who were part of the civil defense force, they were talking - these are people that had been there for about three months up in Tikrit. When they first went into it they took a lot of heat from their local communities, even their families. And in the three months, relations had improved, they were becoming more accepted that they were helping the Americans. But it was still - had a long way to go. But asking them about the arrest of Saddam...

CAVUTO: Even in Tikrit, you are saying, this is Tikrit you're talking about.

ENSIGN: Yes. This is in Tikrit.

CAVUTO: All right, that's interesting. So some of these protests that we have had since, you don't read into that that this is a hot bed of support for Saddam Hussein, sympathy for him, bad news for the infidels, the Americans?

ENSIGN: Well, I mean, there is some of that up there, but once again, you get 100 people or a few hundred people out there protesting, and that is going to catch all of the headlines, that is going to catch all of the video. That is not the majority of the people there. A quarter of the schools have been rebuilt. The hospitals are opening. Over half the people there have running water and this is in the Tikrit region.

CAVUTO: Very good point.

ENSIGN: Our military is doing a spectacular job. And the capture of Saddam Hussein is going to help the Iraqi defense force, the civilian defense force, their police and their new army that they are creating, but it is also going to help American troops over there, Neil.

CAVUTO: Senator, great perspective. We're glad you got home safely. Sen. John Ensign, Republican of Nevada. Thank you, sir.

ENSIGN: Thank you.

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