This is a partial transcript of "Special Report with Brit Hume", Feb. 2, that has been edited for clarity.

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BRIT HUME, HOST: As we reported earlier, Israeli Prime Minister Sharon (search) wants to dismantle 17 Israeli settlements in the Gaza Strip (search). What's he up to? The Palestinians don't believe him; his own opposition doesn't seem to either. So what's going on?

For answers, we turn to the man who served two presidents as a top adviser and negotiator on the Mid East, own Fox News contributor, Dennis Ross. Dennis, welcome.

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

HUME: So what do you think is going on here? I mean nobody seems to believe that Sharon will actually do this. What do you think?

ROSS: Well, I think he's going to do it. I think in fact, one of the things he's been talking about in the last couple of months, is if he does not have a negotiating partner with the Palestinians that he will create a new security line for the Israelis and he will pull back. Now, starting in Gaza is politically lot more acceptable in Israel.

HUME: Gaza being cut off from the other places where Palestinians live. It's isolated against the water.

ROSS: That's right.

HUME: In a corner of what would otherwise be Israel (search).

ROSS: And there's 1.2 million Palestinians who live here. This has the greatest population density in the world. The Israelis are about seven to 8,000, and yet they're on about 35 to 40 percent of the territory of Gaza.

Nobody particularly wants to be there other than those settlers who are there. And the military actually has to have more people on scene at a settlement than the actual settlers who are there to protect them.

So, increasingly it's become a source of criticism within Israel. And from Sharon's standpoint, if he's going to move towards a new security line, starting in Gaza makes a great deal of sense. And if he's going to come here and see President Bush, he comes and he's able to say look, I'm prepared to take what is a big step and unprecedented step.

HUME: This cedes territory, right?

ROSS: Exactly.

HUME: Thirty-five to 40 percent of the Gaza Strip.

ROSS: That's correct.

HUME: But it leaves undisturbed, settlements encompassing even more territory, I presume not percentage wise; and many, more people in the West Bank.

ROSS: That is correct. But it is a start.

HUME: Right.

ROSS: And it could be seen as being from the standpoint of the settler movement, they will see this as a first step down a slippery slope. And so they will resist it. When I say that it's going to be something that is generally supported within Israel, doesn't mean it's going to be supported by the settler community within Israel, because they'll see it as opening a pathway they're extremely comfortable with.

HUME: Well, now what about the political opposition? If he moves ahead with this, will support then swing to his side?

ROSS: Within Israel, you will see that the country will coalesce behind this. And this will be a demonstration by him that he is serious. When he says he will not allow the situation to remain static, he will in fact act.

HUME: Now, the other side of this business of settlements and outposts is the so-called fence.

ROSS: Yes.

HUME: There's one already around Gaza and it keeps -- it's believed, if I'm not mistaken, to be pretty successful to keep terrorists from Gaza to crossing over into Israel.

He wants to put one across the West Bank and that is hugely controversial. Is he prepared, in your judgment, to do the same thing regarding settlements that would be outside that fence in the West Bank?

ROSS: That is a critical question. There are a couple of, I think, important points to be made. First, as you mentioned on Gaza, Gaza has had a fence around it and there has not been a single, successful suicide attack from Gaza in Israel in the last three years. Whereas in the West Bank, there have been over 70 successful suicide attacks.

HUME: Yes. Coming in the window.

ROSS: So, not a surprise that the Israeli public supports the idea of a fence in the West Bank as well, No. 1.

No. 2, the Palestinians can't have it both ways. If they are not prepared to assume their security responsibilities, it leaves the Israelis two choices. One choice is to maintain a siege, which means 160 checkpoints; it means if you're a Palestinian, you can't move from city to town to village. If you need to get to a job, good luck. If you need to get your kids to school, plan on a couple extra hours. If you need to get to a hospital, better hope it's not an emergency.

If the Palestinians don't assume their security responsibilities, the Israelis either maintain such a siege, which is bad for the Palestinian and Israelis.

HUME: And that's the status quo, correct?

ROSS: That's right. Or they pull back to a security line with a fence. Now, some Palestinians are saying, yes, but this is a land grab, because in fact, the fence will be in the West Bank.

Well, it's planned to be in about 15 percent of the West Bank right now. Now, if Israel was to follow the logic of that fence and say, all right, here's the new security line, we're going to lift the siege because once we have the fence we no longer have the siege, Palestinian life will become vastly better than it is today.

That does not mean this is the end of the road, but it can preserve a road for a settlement somewhere in the future.

The question you asked, what about the settlements on the other side of the fence, the wrong side of the fence? The logic is that eventually, maybe not immediately, but eventually if you're on the wrong side of the fence...

HUME: You're not going to want to be there.

ROSS: That's right.

HUME: So these settlements might dissolve, to some extent, on their own because people don't want to be there any more.

ROSS: Certainly is an implication that you cannot sustain it there. If the Israelis are going to be on both sides of the fence and they have to protect all settlements that out there, then they'll have to maintain the siege. Nothing will change. Then you have what might be called addition, not subtraction.

HUME: Now, isn't it also the case if that fence is successfully completed and successful in doing what it did around Gaza, that is to say dramatically decreasing the number of terrorist attacks, doesn't the Palestinian leverage diminish although they might not say that?

ROSS: One thing is for sure. The threat of violence is no longer going to be something that pays off. That's a fact.

Already where the fence has been built, in some places it is a wall, there's about, at this point, there's about 80 kilometers that have been built; only three or so or maybe five or so are actually wall. The rest is fence. It's a barrier. That's what it is.

And in the places where it's been completed, there's already been a dramatic reduction in successful attacks in those areas.

HUME: This thing sounds -- I get the sense you think this whole program is promising.

ROSS: My attitude would be I would prefer to see diplomacy because this is unilateral and there's no such thing as a unilateral solution. But if you can't work the diplomacy right now, then think diplomacy in a creative way.

HUME: Right.

ROSS: Think about paralleled or coordinated unilateralism. Work with the Israelis to make sure the root makes sense from a security standpoint, from demographic standpoint and from the future standpoint.

Work with Palestinians to say wherever the Israelis get out of the territory, you assume responsibility. You could even become sovereign there if you do assume your responsibility, and we'll orchestrate the international community to invest money there. This can be a way to preserve a road so you still have the chance to produce peace overtime.

HUME: Moves the ball.

ROSS: That's right.

HUME: Dennis, thanks.

ROSS: Pleasure.

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