The following is an excerpt from FOX News Sunday, April 11, 2004.

CHRIS WALLACE, HOST, FOX NEWS SUNDAY: It's been a year since the fall of Baghdad, but there has been no celebrating this week. U.S. forces have been fighting insurgents across Iraq. And with less than three months to go until the handover of power, the U.S. and its Iraqi partners have still not agreed on the make-up of the new government.

Where do we stand in Iraq? For answers, we turn to the U.S. civil administrator of Iraq, Ambassador Paul Bremer.

And, Mr. Ambassador, welcome. Good to talk with you again, sir.

L. PAUL BREMER, U.S. PRESIDENTIAL ENVOY TO IRAQ: Thank you. It's nice to be with you.

WALLACE: Let's start with the late news. There is apparently a cease-fire in Fallujah. Why has the U.S. agreed to that? And is the U.S. willing to accept anything less than full control over the security situation in that city?

BREMER: We've agreed to this cease-fire at the request of a number of the members of the Iraqi government, who approached us on Friday evening with the request that we help cease the hostilities there, try to find a way to reduce the bloodshed.

And we agreed to that, and we've been working on it now for the last 48 hours, 36 hours or so. I understand the cease-fire for now is holding, and we're hopeful that we will be able to get some productive talks going.

WALLACE: But, Mr. Ambassador, that sounds more like a political decision to deal with some outrage from Iraqi moderates than it does a military decision. And I must tell you that some soldiers, U.S. Marines in the area, are complaining that it's only allowing the insurgents to regroup.

BREMER: Well, I think we have to take care that we don't allow the people who are shooting at us to become stronger. That, of course, is a military matter that General Sanchez and his people are working on. It is a very delicate problem any time you try to impose a cease-fire on hostilities. And we are very mindful of the need not to have the result be that the insurgents become stronger. You can be sure that's very much on our minds.

WALLACE: There is also talk that some members of the Iraqi Governing Council are negotiating with Shiite cleric Muqtada al-Sadr. Are we willing to accept anything less than his surrender and the breakup of his militia?

BREMER: What we have said consistently is that he must submit to justice. He is subject to an Iraqi police arrest warrant for murder, and he has to submit to justice. And his militia has to be disbanded, as indeed all the militia in this country have to be disbanded.

You know, I think what's going on here, in both of these cases, Mr. Wallace, is effectively to purge some of the poison that built up in the body politic of Iraq over 25 years of Saddam's tyranny. There is a lot of poison still in the society, and it's got to come out. And, frankly, it's better that it comes out now rather than later. It would have built up even more danger, I think, later.

We always knew there were going to be rough days during this occupation, and we certainly had a rough week. But I think when we go through this, we'll find that Iraq is going to be a stronger country, the Governing Council will be a stronger political institution. So we just have to work our way through this crisis.

WALLACE: Let's talk about the Iraqis. Some members of the Governing Council are condemning the U.S. military response. Some Iraqi officials have resigned. Some members of the army and the police force that you helped develop have either defected to the other side or refused to fight.

Mr. Ambassador, are you disappointed that some of the Iraqis that you are counting on to build the new Iraq have gone missing?

BREMER: I think we shouldn't exaggerate the trend. Actually, we've had only one member of the government resign at this point. The rest of them have stood with us.

The Governing Council, in fact, issued a very good statement on Friday night, the major political parties have issued a good statement, essentially condemning Muqtada al-Sadr for his illegal activities and calling for him to stop those activities.

We knew that we had some weaknesses in the security forces. We've seen those over the last week. We're going to have to now reconstitute those forces when this crisis is over and take care as to how we build good security forces that can take a bigger role in defending Iraq. But those are going to be big jobs, and we've already started a plan for them.

WALLACE: Mr. Ambassador, how many U.S. hostages do you believe are being held? And what, if anything, can we do to try to get them back?

BREMER: I honestly don't know at this point how many are actually held. We've seen lots of different reports, and we in the military are trying to run them down.

We will not negotiate over hostages. That's fairly clear.

It is a hopeful sign that hostages from some other countries apparently have been released, but I don't have any more immediate information for you on that right now.

WALLACE: Mr. Ambassador, and you know what the situation is there, but you probably don't know quite the images -- and perhaps they are exaggerated -- that we're getting over here.

But I think a lot of people in this country are wondering how, in the last year, we seem to have gone from the force that went in to liberate Iraq, to remove the oppressive regime of Saddam Hussein, to a situation now where we are killing some of the people -- I'm talking particularly about the Shiites -- who we went in there to liberate. How has this happened?

BREMER: Well, first of all, we're not going out killing people unless they're shooting at us. The people who are shooting at us are shooting at us right now, of course, in the area of the Sunni part of the country.

You know, you have to step back a little bit. We liberated a country of 25 million people here. We have a few thousand people who are opposed to the democratic vision of the future of Iraq. They represent, as I said earlier, something of a poison in the body politic, and we're going to have to deal with that.

But we ought to keep a little perspective on this. There's been a huge amount of progress. Iraqis, in poll after poll, tell you that they find themselves better off economically now than they were a year ago and expect to be much better off in another year.

So our job is to keep them focused on that hopeful future by dealing with these extremists who are basically anti-democratic and don't believe in that future.

WALLACE: Finally, sir, I want to talk to you about that June 30th deadline. President Bush once again yesterday said that it is firm, that to give in would be to give a victory to our enemies.

But given, as you say, we're trying to bleed the poison out of the country -- we have an uncertain military situation, we still don't know the government that we're going to be handing power over to on June 30th -- how can you be sure that, two months from now, that June 30th date is still going to make sense?

BREMER: Well, I think we'll make it. First of all, it's a date which was requested very strongly by the Iraqis back in November when it was agreed to. It has now got a real view of the majority of the Iraqis that that is the day on which the occupation will end. And I think if we don't keep our promise there, we'll find it actually puts more Americans' lives at risk.

We will have an interim government in time. The secretary- general's special representative from the U.N. is here, Mr. Brahimi, working on a variety of consultations, as are we, on how to establish that government. We will have a representative government in place here well before June 30th, is my guess.

WALLACE: Ambassador Bremer, we want to thank you so much for giving us a readout on the situation there. Stay safe, sir, and Happy Easter.

BREMER: Thank you.