This is a partial transcript of "Special Report With Brit Hume," Aug. 18, 2004, that has been edited for clarity.

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BRIT HUME, HOST: As we've noted, the renegade Shiite cleric Muqtada al Sadr (search) has reportedly agreed to take himself and his forces out of the Iraqi city of Najaf and out of its sacred mosque in exchange for amnesty. If that agreement sounds familiar, it is. And the question arises are the Iraqi government and U.S. military allies about to repeat a mistake?

For answers, we turn to Fox News military analyst, retired Army General Robert Scales (search).

Bob, welcome back.

MAJ. GEN. ROBERT SCALES (RET.), U.S. ARMY: Hi, Brit.

HUME: Now, how many times have we made this deal with this guy?

SCALES: We're talking the fourth.

HUME: Is this the fourth?

SCALES: Well, we could have killed this guy a year ago when he first started acting stupid. Recall last April, we had him completely surrounded. We killed about 40 percent of his fighters in Najaf (search), backed off again. Early August, the Marines go in and do a great job of clearing the outer defenses of the brigades and we're about ready to close in, then we talk. Now we're about to close in with the 11 MEU, Marine Expeditionary Unit and the First Cav. He sees the guns at the gates and he starts to do it again.

Each time this guy skates away, each time he escapes death at the hands of either the Iraqi military or U.S., his status goes up among the disaffected in that country. So, the guy's got to go down.

HUME: So, if we agree to this amnesty deal, in your estimation, we're probably making an enormous mistake.

SCALES: He is going to be back. He is going to be back. And now one thing you have to give the Iraqis credit for is their plan is to assault this guy if they need to with Iraqi forces. And that is the right idea. If he dies, he needs to die with an Iraqi bullet in him, rather than an American.

HUME: Well, is it more important that he have an Iraqi bullet in him than an American, or that he die?

SCALES: I think that Option 1 is a preferable option. But Option 1 or 2 would be necessary because the guy...

HUME: Anything better than letting him off the hook again.

SCALES: You cannot imagine this guy as being part of democratic process. There is nothing in it for him and there's nothing in it for his followers. The guy will be disruptive and he may very well be the cause of an October surprise somewhere in Najaf or in Sadr City. His militia has to be disbanded. He has got to be taken down.

HUME: Does it appear to you tonight and apart of what is happening in Najaf that his forces in Sadr City are being very aggressively assaulted?

SCALES: Very interesting, because what's been missing a lot in the press lately is the good job the First Cav. is doing clearing Sadr City. This is a major multi-brigade operation that's going down very carefully, very methodically and very thoroughly. It is a sort of a sweep and clear operation. And they're doing the right thing. Because his base is not Najaf, the citizens of Najaf don't care for this guy at all. His base is in Sadr City. Take out the base and Sadr will wither on the vine in Najaf. It's inevitable.

HUME: So, that raises the possibility then, that if the action in Sadr City by the U.S. and Iraqi forces succeeds, that he will be weakened to the point where it won't matter?

SCALES: Well, he was weakened in April; he was weakened in early August. He has the ability to regenerate. He is the source of the problem. You've got to get rid of him. But taking down his base in Sadr City certainly undermines his power in Najaf. No question about it.

HUME: Now, you mentioned the possibly of his leading a later up rising.

SCALES: Right.

HUME: Obviously you got two big dates. The U.S. presidential election and the Iraqi election next year. What is your sense of how big an uprising can be mounted in that country under the current circumstances?

SCALES: If left alone, it could come from two sources. It could come from the Sunni militia that is in Fallujah or from the Shiias in Sadr City and hopefully out of Najaf soon, but possibly in Najaf. If these two manage to come to some sort of coordinated solution in October, it could get really, really messy. Particularly from the standpoint of trying to portray the democratization of this country as being on the right path.

HUME: What needs to be done, then? What do you think about what's happening in Fallujah that has been quiet lately...

SCALES: Very quiet.

HUME: ... but we keep occasionally hitting a building or two. Is that anywhere near enough to deal with that situation there?

SCALES: No way. No way. Particularly with the foreign influence in Fallujah, they're laying low. They're restocking their arms. They are not being harassed at all by the Iraqi government forces in that city. They're waiting for the opportunity to cause some mischief.

HUME: It did look for a long time like the turnover of power was a good thing and that things would move power. Has the turn over of power simply had the effect, in your judgment, of handicapping the U.S. military and its freedom of movement without adding any notable benefit in terms of Iraqi perceptions?

SCALES: The problem in Fallujah is the veil has been dropped. It's very, very difficult to know what's going on in the city because there is no presence in the city by American forces. And so, it's become something of an informational black hole. We need to find out what is going on in Fallujah. But right now, job one is to get rid of Sadr, or so chop up his militia that when the elections come around, he's got no power left.

HUME: But am I right that his militia is a ragtag group of little kids basically?

SCALES: Oh, this is more like a south L.A. street gang. I mean these guys have got no military competency at all. There's just so many of them. And they're so fanatical; they're willing to die.

HUME: And they can murder Iraqis.

SCALES: The can murder Iraqis or they can get the odd hit against the Americans.

HUME: Bob Scales, it's great to have you. Thanks very much.

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