This is a partial transcript of "Special Report with Brit Hume", March 22 that has been edited for clarity.

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BRIT HUME, HOST: Saddam Hussein (search) is not only gone but captured, a new constitution has been adopted, and Iraq seems headed for elections. But the terror attacks lately have intensified. And the casualties, both U.S. and Iraqi, continue to mount. So is the glass in Iraq half full or half empty?

Who better to answer than our own panelist, Fred Barnes, who is on assignment in Iraq for our sister publication, the "Weekly Standard," of which he is executive editor.

Hi, Fred

FRED BARNES, EXECUTIVE EDITOR, "WEEKLY STANDARD": Hi, Brit. Great to be here; I don't even have to wear a tie.

(LAUGHTER)

HUME: And no worry about being interrupted by Mort or Mara either.

BARNES: Exactly.

HUME: Tell me what -- what your impression -- you've been there what? Nine or 10 days now? What are your impressions?

BARNES: Yes. Well, my impression is that it is a much bigger task here that America has undertaken than I thought before I came. And than I think most Americans think is here. It is very, very difficult.

Paul Bremer (search) and the military and all the people who work for him have done a wonderful job. But it's going to take more than just a boost in the economy and getting the terrorism tamped down for this whole mission here, for democracy in Iraq to succeed.

I mean the Iraqi people are very difficult to deal with. The Arab press that they read and watch on television is very, very anti-American; this is the media that they get. You know, Paul Bremer, who is the head of the coalition here, says that he was in France -- did some studying in France and says the French have never forgiven Americans for liberating them. You get a little bit of that attitude from the Iraqis as well.

HUME: Tell me about -- first of all, you mentioned the economy. You mentioned the economy improving. You sounded like you think it's going to happen.

BARNES: Yes.

HUME: Why?

BARNES: Well, the Iraqi economy is going to get a mammoth stimulus, you know, so much bigger than, say, the Bush tax cuts in America. Iraq has an economy of less than $30 billion Gross National Product (search).

And the stimulus that'll be -- that starts here soon, the $18.5 billion for reconstruction begins in a month or so, and will be spread over just a couple years. Can you imagine that kind of a stimulus? I mean it's huge.

I don't think ever in human history will any country have gotten such an economic stimulus. And there is a Treasury Department study that shows that it will create a million jobs just on the reconstruction it will stimulate, and a million spin-off jobs. That will go a long way here.

HUME: All right. What about the security situation, which is the thing that we hear about all the time? Everybody keeps saying, well, everything's going well but the security situation remains a problem. You seem to think that that might get better but it's not enough.

BARNES: Well, it is going to get better. I mean it's already gotten better in part. I mean there are two separate aspects of the security situation. One is the Ba'athists, you know, the former people, the aides and allies of Saddam Hussein. That has gone down some. I mean they've arrested many of them. It's been tamped down.

But then you have the Islamic terrorists from other countries, and they're here bombing civilians. And you know, a couple of Finnish businessmen were killed here today. They are a tougher problem; that's a problem that Paul Bremer and everyone else says will continue. But in the long run, I think they'll defeat that problem.

HUME: Now, tell me -- but you seem pessimistic about the Iraqi people and whether they want to embrace this future that they seem to have, at least within their grasp or at least potentially, within their grasp. What makes you say that about the Iraqi people?

BARNES: Well, I guess I'm just -- I don't know whether I'm pessimistic. I'm just less optimistic than I was. I didn't realize that that would be a problem.

Look, it's different from what America faced in Germany in dealing with the non-communist countries -- the former communist countries. Remember in Germany, Germans could remember a dozen years earlier when there was a democracy and elected government and a free economy, so on in Germany.

The non-communist countries had a 10-year transition, where there was liberalization in these countries and the terror was gone, even in the Soviet Union, but in Poland and other communist countries.

There's been no transition here. There's no memory of democracy. And I'm not sure that -- obviously the Iraqis who are tied -- who are in the Governing Council and the exiles that have come back and many Iraqis here get it. But an awful lot of them don't seem to get what democracy is all about.

HUME: What does -- how did that manifest itself? And how do you sense that?

BARNES: Well, I think it manifests itself in some resentment toward America. I mean the Iraqis have an odd attitude by and large, and it shows up in these polls. They hate the occupation, but they're really leery of having Americans leave, because Americans are really what is holding Iraq together right now.

HUME: All right. Fred, look, stay safe, buddy, and we'll see you back here later in the week, I hope. Be well. Be well.

BARNES: All right. Look forward to it.

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