This is a partial transcript from On the Record with Greta Van Susteren, April 27, 2004 that has been edited for clarity.

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GRETA VAN SUSTEREN, HOST:  A spectacular show of force as American troops storm Fallujah.  Fox's Kelly Wright is on the ground in Baghdad with late-breaking details -- Kelly.

KELLY WRIGHT, FOX CORRESPONDENT:  Greta, good morning to you from Baghdad.  It was indeed a spectacular display of U.S. and coalition firepower.  I must tell you, before the bombardments began on Fallujah, a U.S. aircraft dropped leaflets onto the ground urging the insurgents to surrender in order to spare their life.  The U.S. told them, We are coming to arrest you.  With that, about 20 minutes later, we saw a massive display of that firepower, an amount of -- so many explosions ripped through the town of Fallujah, the barrage of firepower was an overwhelming sight to watch through night-vision cameras.  Plumes of smoke billowed into the air as two AC-130 gunships targeted ammunition and weapons sites there.

Marines are now recovering weapons in some of the villages and surrounding areas, and at least 70 improvised explosive devices have been found.  Negotiations are continuing as Marines follow up on intelligence from those on the ground.  Patrols haven't begun yet because they're worried about being fired upon.  So right now, they're waiting as talks continue.  The Marines said they were conducting a major push to try and interdict the enemy.

Also, near the outskirts of Najaf, U.S. soldiers on patrol near the Euphrates River were fired upon.  U.S. troops returned gunfire and called in air support from U.S. Army helicopters.  At least 64 enemy gunmen were killed.  The clash came as 200 troops and military police made their first deployment inside Najaf to replace Spanish troops vacating Iraq.  U.S. commanders say they will not move against the shrines in order to capture rebel cleric leader Moqtada al Sadr.  So right now, everything is -- appears to be very calm, from what we understand.  It has moved to a state of calmness in Najaf, as well as Fallujah, but we are also told now that Marines in Fallujah are getting cooperation from town leaders, who are helping them find the enemy fighters.

That's the latest from Baghdad.  Back to you, Greta.

VAN SUSTEREN:  Kelly, thank you.

Joining us from Baghdad are Brigadier General Mark Kimmitt, deputy director for coalition operations, and Dan Senor, special adviser to presidential envoy Paul Bremer.

General, if you could just give me an assessment -- maybe it's too soon -- of the strikes in Fallujah.

BRIG. GEN. MARK KIMMITT, DEPUTY DIRECTOR COALITION OPS:  Last night, as you saw very graphically on the television set, an AC-130 had picked up what appeared to be a number of vehicles moving in somewhat of an offensive posture against our soldiers.  The AC-130s responded.  Not only did they hit those vehicles and the people that looked like they were carrying things to the vehicles, but apparently, those vehicles had a significant amount of explosives and ammunition.  And so what you saw in those pictures was not only the explosion from the weapons and the ordnance being fired by the AC-130, but the secondary explosions from that ammunition, as well.

VAN SUSTEREN:  General, why was the AC-130 the particular plane or even method for doing this in Fallujah?

KIMMITT:  Well, first of all, the AC-130 is a very effective weapons system.  It sees at night and has the capability to deliver very precise close air support.  We know that that's an area of Fallujah that's been -- that has had problems in the last couple of days, so it was there protecting our Marines and keeping an eye out on the enemy.

VAN SUSTEREN:  Dan, you're sort of dealing with the political side, with helping Mr. Bremer there.  What's the impact of, you know, your sort of diplomatic maneuverings because of what's going on in Fallujah?

DAN SENOR, COALITION SENIOR SPECIAL ADVISER:  Well, Greta, our question all along, since these discussions began, was whether or not the individuals with whom we were negotiating had the capacity to deliver.  We had no doubt that they were serious about their intentions.  They wanted a peaceful resolution.  Could they get to the insurgents?  Could they get to the former Saddamists and either hand them over to us or quell the violence?  That's always been the question.  We've seen ups and downs.  At first, it looked questionable, then we saw a little bit of progress.  Perhaps it looks questionable again.  It's too early to tell.  We're going to have to assess the situation.

But clearly, there is a divide, it appears, between those we're talking to and those that are engaging in the violence.

VAN SUSTEREN:  So General, without revealing your strategy or plan to anyone who might be listening, the enemy, I mean, what is the next step in Fallujah?

KIMMITT:  The next step is to continue the political track, continue to talk to those in Fallujah that assert they can deliver the enemy, continue the preparations for joint patrols and maintain a very, very robust military presence there, so that if it comes down to needing to complete this mission by the use of military force, we're ready to go.

VAN SUSTEREN:  General, the very purpose -- or at least originally, the purpose of going into Fallujah is that we were looking for those who were responsible for dragging those American bodies through the streets of Fallujah.  Do you know who those people are?  Do you know where they are?  And is that still the goal?

KIMMITT:  There are a number of goals that we have for Fallujah, among those, including bringing those people who killed the Blackwater contractors to justice.  We have some intelligence of who those persons are, where they may be, and we're just biding our time.

VAN SUSTEREN:  Dan, has -- since you've been on the ground in Iraq -- and I know you've joined us before and you've been there for quite some time -- is the reception that the Americans are receiving -- is it changing at all?

SENOR:  I think in very isolated pockets, Greta, you do see some resentment.  But those are typically in pockets where we've had problems before or that it's easy for there to be residents for anti-American sentiment.  These are either hard-core Saddamists or foreign fighters or areas where there are a lot of radical Islamists.  I think it's important to keep in perspective that while much of the press coverage tends to focus on those areas, it by no means reflects the population at large.

Look at the polling.  The polling says three things overwhelmingly.  One, the majority of Iraqis are grateful that Saddam is gone, grateful for the liberation -- 95 percent, 98 percent.  Two, they want the occupation to end.  That's understandable.  We want the occupation to end, too.  It's not nice to be occupied, nor is it nice to be an occupier.  But three, they say they don't want the coalition forces to leave because they're afraid if we'd leave, the violence will get out of control, the situation will destabilize.

And so it's sort of paradoxical here.  On the one hand, they want  the occupation to end.  On the other hand, they don't want the coalition forces to leave.  And that tension is much more reflective of the mood at large than the isolated pockets you may see on television of the random Iraqis who tend to protest what we're doing.

VAN SUSTEREN:  Dan, is there anyone there who thinks that we even want to stay there?

SENOR:  No.  In fact, it's interesting that you asked that.  About a year ago, when I first arrived, the mood here was full of conspiracy theories.  We're here for oil.  We're here to stay.  We're here to colonialize.  And in fact, most Iraqis today believe none of that is true.  Most of the rumors have cycled through the system in that regard.  No one thinks we're here for oil.

And we've been so disciplined about talking about June 30, we've been so disciplined about talking about the handover date that most Iraqis believe we really are leaving, we really want to give them political sovereignty.  They understand -- most understand our security forces are going to stay here and still address the terror threat, but politically, most people know that Jerry Bremer is getting on a plane on June 30, going home.  He has no interest of being -- in being the king of Baghdad.

VAN SUSTEREN:  General, what about Najaf tonight?  What -- what's going on there?

KIMMITT:  Pretty calm in Najaf.  We had a fairly significant firefight night prior cost about 54 insurgents' lives when they came out and tried to take on one of our convoys, one of our tanks.  But last night, it was generally quiet.

VAN SUSTEREN:  And I take it that it's still -- the United States doesn't intend to go into a mosque, but if fired upon from a mosque, that our troops will defend themselves.  That right, General?

KIMMITT:  Well, it's even more than that in Najaf.  We have stayed completely out of the city.  And all the engagements that I was referring to happened not only outside of Najaf, it was actually outside of the town of Kufa and on the far side of the Euphrates River.  We certainly understand the significance of the holy site of Najaf for the Shia, and we will do everything we can to avoid having to go in there, but that option still remains open.

VAN SUSTEREN:  All right.  Thank you very much, gentlemen.  And Dan, I understand you're coming back soon, right?

SENOR:  I am en route today.  I'll see you on the other end.

VAN SUSTEREN:  That's what I understand.  Well, we look forward to you coming home.  And General, we welcome you home when you come, as well.  Thank you both.

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