This is a partial transcript of "The Big Story With John Gibson," Oct. 22, 2004, that has been edited for clarity.

Watch "The Big Story With John Gibson" weeknights at 5 p.m. ET!

JOHN GIBSON, HOST: Those are our troops battling rebels near Baquba, about 35 miles northeast of Baghdad. Our troops were searching for hidden weapons, and from the looks of it, with good reason.

According to a published report, rebel forces have more fighters and more money than anybody previously estimated.

Retired Marine Lieutenant Colonel Oliver North (search) joins me now to talk about the latest violence in Iraq. He is, of course, the host of "War Stories" here on your FOX News Channel.

And the big question, Ollie: are rebel forces a bigger problem than we thought?

OLIVER NORTH, RETIRED MARINE LIEUTENANT COLONEL, HOST, "WAR STORIES": Well, than who thought? In the American media or the ground forces that have been out there since the first phase of this war ended? I think our news media has overemphasized the effectiveness of these guys. The total number of them, notwithstanding all the reports to the contrary, is probably less than 25,000, which is one-tenth of one percent of this population.

They do get support financially from other places, not just Iran, but of course, Saudi honey. Most of the suicide terrorists, who are blowing themselves up trying to kill not just Americans, but Iraqis as well, it turns out appear to be foreigners.

And there's no doubt that there's some inspiration from the likes of people like Zarqawi to encourage some Iraqis to join his cause. I don't think is properly called a rebel movement or an insurgency, John. I think what you've got here is an anarchy. What you've got here is an anarchy. What you've got are some Shia, some Sunni, some Baathists, some criminals and a fair number of foreigners, who've intervened in this country, trying to stop the democratic process.

And as I predicted just a few days ago, when I was there out, this violence — like you're seeing right here in Ramadi — is going to continue right up until and probably for a few days after their election in January.

John.

GIBSON: So Ollie, to what extent do they have their eye on our election? At all?

NORTH: Well, I think there are some that do. There's no doubt that people very sophisticated like al-Zarqawi, and perhaps some of those in Iran are watching our elections. We've seen them manipulate the elections before here in this country.

I don't think that your average street fighter out there, who's been encouraged by the imam and his local mosque to go out there, as these guys were when I shot this tape right here. Those guys came right out of that mosque that's right next to where I was standing and those guys were probably encouraged by the local imam to do whatever they could to preserve his power, his power in this case, in Ramadi.

GIBSON: Ollie, we've been looking for what's been called, I guess the final offensive in Fallujah and it seems like it might be shaping up literally any moment. Can you give us an idea of what's going to happen there? And is there a chance that when Iraqi and U.S. forces take Fallujah, they're going to find Abu Musab al Zarqawi (search) there?

NORTH: Well, I wouldn't speculate that Zarqawi's is still there or even still alive. I don't think anybody out there on the ground wants to do that either. I talked to some of those guys after you and I set up this discussion right now, I talked to some folks out there. They're not altogether convinced that Zarqawi is still inside the city, or even still alive.

Nonetheless, the people who support his foreign terrorist movement are still in that city. It is now pretty much surrounded by roving patrols of Marines. You're now seeing the Iraqi national guard moving in. I think what you're going to see, John is not Stalingrad.

What you're going to see is something along the lines of what happened in Najaf and then later on in Samarra, where the local population said, "We've had it. We don't want these guys continuing to screw around with our city. Many of them are foreigners. What we want to do is raise our kids with some opportunity."

And you're about to hear from a guy who's been out there building schools and hospitals and clinics and improving water supplies. All the kinds of things that they never got under Saddam. And what they want are those benefits for their kids.

GIBSON: … Now, one more thing. What about making more enemies than friends by having to put the hammer down so hard in Fallujah?

NORTH: Well, we didn't make more enemies than friends in Samarra, we didn't make more enemies than friends in Najaf. What we did was we follow up immediately with… civic affairs and civic action… And it's worked.

You're going to have that same kind of think happen in Sadr City (search); you're going to have that same kind of thing happening around the rest of the country, where these guys go in right afterwards, right after a gun fight, the likes of which you're seeing right now, they'll go back in and hand out school supplies to the kids. Bandages and literally, looking after improving the clinics for the people, in some cases, that are treating the combatants.

GIBSON: Ollie North, of course it's always great to have you on, Ollie.

NORTH: Thanks, John.

GIBSON: And I know you're running back and forth to Iraq, but as often as you're here, I hope you come on.

NORTH: Well, as long as there are guys like that out there, I'll keep going back.

GIBSON: All right. Thanks a lot, Ollie.

Content and Programming Copyright 2004 Fox News Network, L.L.C. ALL RIGHTS RESERVED. Transcription Copyright 2004 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, L.L.C.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.