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

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IYAD ALLAWI, IRAQI INTERIM PRIME MINISTER: ... Fallujah area and the area around Fallujah.

BRIT HUME, FOX NEWS ANCHOR: But could you actually have balloting in that area with the terrorists seemingly in complete control of that city and that immediate area?

ALLAWI: I don't think they are in complete control. This is -- you know, there are definitely pockets, important pockets of terrorist-controlled areas in Fallujah and around Fallujah. They had like in Samarra, which is much larger place than Fallujah, pockets of terrorist active there, and this is finished. The Samarra one is finished. And now we are progressing in Fallujah. We are trying to reach out to the tribes and to the people and hope to achieve the desired result as soon as we can.

HUME: Well, would you agree with some who have argued that leaving Fallujah, ending the military mission there earlier this year when the Marines were moving in, and trying to leave it up to locals there to take charge of the place, was, in retrospect, a mistake?

ALLAWI: Well, the local formation of this local brigade was, indeed, a problem. I think this should not have been done. However, this is water under the bridge now and things are being rectified. All of our (UNINTELLIGIBLE) are making maximum efforts in the Fallujah area, and hopefully we'll be successful there.

HUME: The attacks, of course, continue elsewhere, as well, including in Baghdad, including even near and around the edges of the Green Zone, which has been the most secure perimeter there. Are you confident, sir, and can you give the American people confidence as they look to see what might be in the future there that this level of violence can be subdued in time for a nationwide election in January?

ALLAWI: Well, you recently had the example of Najaf. And Najaf now is back to normality, the people are going about doing their own business. People are going to the mosques, to the shrines, to restaurants, hotels, so on. The same applies to Samarra, which was even probably more than Fallujah, problems there. Likewise in Basra. There are -- the vast majority of Iraq is really calm, no problems. Samarra, Diwaniya (ph), Hilla, (UNINTELLIGIBLE), Kut, Basra, Najaf, Karbala, Suleimaniya (ph), Erbil, Tahuk (ph), these are all calm places, and the government is in full control.

There are pockets in Fallujah, there are pockets in Ramadi which are shrinking -- in Ramadi. There are problems in an area called North (UNINTELLIGIBLE), and these are really a way to be solved. So really, overall, we definitely have been making progress, definitely are winning. We have been apprehending a lot of terrorists, a lot of insurgents. A lot of them were caught also in the combat zones in Fallujah, many of them were caught in Samarra also and also some are killed.

So we hope that as we progress -- you know, you have to understand that what is happening now in Iraq is not really an indigenous problem in Iraq.

It's international, it's global conflict with international terrorists.

HUME: Well, let me ask you a question about that.


HUME: Who are these guys? For a long time it was thought that they were remnants of the old Baathist regime, and now it seems to be more and more the case that these are outsiders who are coming in across what, Senator Kerry said today, by the way, was a porous border to make trouble in Iraq. What is your sense of who these people are?

ALLAWI: A lot -- significant number of these insurgents are composed of non-Iraqis, those who have...

HUME: A majority?

ALLAWI: Well, I don't know really. I can't put a percentage, but definitely we are finding more and more people from Syria, Morocco, Saudi Arabia, from Pakistan, Yemen.

HUME: And what do you say to the argument, that is here in the United States, that these people have been encouraged, recruited even, by the presence of the U.S. in Iraq? And if it weren't for the U.S. in Iraq, we wouldn't be having trouble with these terrorists?

ALLAWI: No, these terrorists appear before the trouble in Iraq and before the war of liberation in Iraq. Everybody remembers still what happened in September in New York which was a tragedy. The war was not on there in September. And things were left alone in Iraq. So really, global terrorism is a phenomenon which is manifesting itself. Now Iraq is the theater of conflict. People around the world in civilized countries...

HUME: Mr. Prime Minister.


HUME: I hate to interrupt you, but I'm afraid time has run out on us, we have to leave it there. But thank you very much for being with us.

ALLAWI: Thank you.

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