This is a partial transcript of "Special Report with Brit Hume", April 20, 2004 that has been edited for clarity.

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DAN SENSOR, COALITION SPOKESMAN: We are very serious about a peaceful resolution to the situation in Fallujah. But everybody must recognize that in the absence of a true cease-fire, major hostilities will return on short notice.

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BRIT HUME, HOST: As of tonight, standoffs continue in two Iraqi cities, Fallujah and Najaf. The U.S. is trying to let the Iraqis work things out in those places, which has given ammunition to critics who say it's one more sign that, A, the wheels are off the Iraq enterprise. And B, we don't have enough troops. So who's right?

For answers we turn to Fox News military analyst retired Air Force General McInerney who is co-author of a new book, "End Game, The Blueprint For Victory In The War On Terror."

General, good evening. First question, what about the situation in Fallujah? How great a chance do you think there is that it could be worked out peacefully? The Pentagon doesn't seem to be very optimistic.

LT. GEN.THOMAS MCINERNEY (RET.) U.S. AIR FORCE: Well, I think they're in a negotiating phase, and I think they are right. But the one thing we'll know that we gave the Iraqi moderate the opportunity, the city leaders, the Governing Council, an opportunity, which I think is very, very important. In both these cases, we're at landmark decisions in the way we handle this.

Now, once the moderate leaders there say, well, we're not going to be able to turn them over or we can't resolve this, then we're going to have to take this down, we're going to have to take it down very brutally. Now what do I mean by that, Brit? I don't want to do -- have one-on-one soldiers going through fighting one-on-one. If we see anything coming out of a house, we ought to put a 500-pound laser-guided bomb. So we ought to have urban close-air support sitting up there when we're ready to go back in.

And just as the First Armored Division under Major General Marty Dempsey, when they crushed that rebellion and insurgency in Sadr City, they did it overnight. They had casualties, remember, 10-plus people. But it was done quickly and swiftly. So I think the Marines are going to need some armor up there. And...

HUME: Do they have it?

MCINERNEY: They don't have it right now, to the best of my knowledge.

HUME: Well, he is talking about -- you heard -- seen or -- he is saying that this would happen on very short notice if this breaks down, the negotiations break down. That seems as if he thinks they're ready to go?

MCINERNEY: Well, then they must have that. I hope their game plan, though, is to use the heavy forces, which the Marines are not. They do have armor, though, but they don't have nearly -- they aren't nearly as heavy as, say, an armored division much the First Cav is in that vicinity could move up and support them. And I'm sure that's what they'll do, a combination First Cav and Marine forces.

HUME: That would be a combination of Army and Marine Corps and...

MCINERNEY: Army and Marine Corps and airpower. And airpower.

HUME: And you -- now, what kind of -- airpower would be used to, what, destroy houses? I mean what are you going to shoot at in the streets there?

MCINERNEY: Well, in these particular cases, with the urban close air support, there are forward observers have got to know using lasers and designate these laser-guided bombs to so they can come in and hit the key strong points. Now, we're not talking about onesies and twosies people in these buildings. You know the Marines are out reconnoitering right now, and they have a good feel where the strong points are. So they ought to pulverize these positions once they have to go. Now I think, as I said initially, letting the moderates lead into it, and if they can, we'll solve it that way. But otherwise we have to crush it.

HUME: Do you have any doubt that with the number of boots on the ground that we have in Iraq that this mission is -- is something that's doable?

MCINERNEY: Yes, I do. Now look, this is General Sanchez...

HUME: You have none?

MCINERNEY: Yes, I have no doubts. I think we've got -- we've probably got maybe 3,000 at the most, 3,000-plus in the Fallujah area. Now...

HUME: Now that's an area where we had barely been in at all before the trouble?

MCINERNEY: Never. Never. Didn't touch it.

HUME: Was that a mistake in your judgment, by the way?

MCINERNEY: As it turned out it was. As it turns out it was. You know, this particular area is influenced by the Syrians, the Sunnis there, but it's also influenced by the Wahabis down in Saudi Arabia. And so it's an area that didn't get a lot of attention, as General Myers said it's a rat nest...

HUME: It was known a hotbed, though, of troublemaking.

MCINERNEY: Oh, yes. That and Ramadi were hot beds, part of the key part of the Sunni Triangle. The 81 Airborne Division -- the 82 was in there, before that, I think, the Second Brigade of the Third Infantry Division was in. But they never cleaned this rat nest out.

HUME: Well, now a lot of people will ascribe that to the fact that given the force structure we had there, the number of troops, we simply couldn't be everywhere. And we left those places alone. That if we had had more troops on the ground, that we would have been able to impose a tighter grip across the country. What's your response to that?

MCINERNEY: Well, you can always use more troops. The question is what is the baggage and what do you need to do that? I'm not convinced necessarily that we would have still put those troops in there. What we did miss was -- and just the way the war went, that we really never had any major combat, so those people were never taken out. There are a lot of Republican Guard people that lived there, and they flowed back in. And so you can probably say knowing what we know now, we should have gone in there early on.

HUME: Now, what are we going to do if the situation in Najaf -- we have very little time left -- if the situation in Najaf does not produce this man, Sadr, and doesn't produce the end of that militia? Are we going to shoot our way into a holy city?

MCINERNEY: No. We're going to really let -- I'm encouraged by what is going in Najaf. I believe that the Iraqi people, the moderates, are going to get rid of al Sadr. That's taking a little bit of time. They don't like the city being surrounded. They don't like it being threatened, and they know the reason it is. Now, this is one that we've got to let the Iraqis do it and decide it. How long can we go on for that? We can go on longer than they can go on.

HUME: Because we have it under siege?

MCINERNEY: Because we have it under siege.

HUME: So that your view then is, in a sense, we're going to end up starving them out if they don't come around?

MCINERNEY: That, plus we have got to go to Iran. Iran and Syria are part of the web of terror nations, Brit, and we have got to take action.

HUME: Final question on the troops. Would we not be in a better position to fend the troublemakers coming in from those two places if we will a larger force in deployment?

MCINERNEY: I think we would be better off if we put more intelligence surveillance reconnaissance, like Global Hawk and other assets that can cover these logged border areas rather than throw in the old way of doing it in armored cavalry regiments. We don't have those assets over there yet.

HUME: All right. Tom McInerney, great to have you sir.

MCINERNEY: Thanks Brit.

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