This is a partial transcript from "The O'Reilly Factor," August 23, 2005, that has been edited for clarity.

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BILL O'REILLY, HOST: "Personal story" segment tonight. Radio talk show host Michael Graham was fired from WMAL (search) in Washington for saying, "Islam is a terrorist organization" a number of times on a series of programs in July.

Mr. Graham was given the opportunity to back track on the air by the station, but he refused and is now a former talk show host. He joins us from Charleston, South Carolina, where he's on vacation.

All right, Michael. You know, ABC (search) owns WMAL. And they told us, look, we gave Michael a chance to go on the air and say he might have overstated it, you know, temper it a little bit. And you just basically said you weren't going to do it. Is that true?

MICHAEL GRAHAM, FIRED WMAL RADIO HOST: No, what they said is you have to apologize. I actually gave a statement during the middle of this crisis before they gave in to the demands from care and suspended me and made a statement to try to calm everybody down.

But what they specifically wanted was an apology. And Bill, I cannot apologize for the truth. The truth about the condition of Islam today is tragic. I wasn't celebrating it or gloating about it. It's a - I feel so sorry for Muslims to challenge them in front of them. But I will not retract the truth.

O'REILLY: All right, but.

GRAHAM: You're in the talk business, Bill.

O'REILLY: Islam (search) is a terrorist organization. I don't believe that. And I'm about as tough against al Qaeda (search) as they come. See, and let me just tell you why and then you can answer it.

Because Islam comprises what? Two billion people in this world. I mean, a lot of people in a lot of countries. And 98 percent of them are law-abiding, good people who are helping other folks out.

So with that kind of a majority within the organization, the Islamic faith, I couldn't possibly say Islam is a terrorist organization, when only two percent or one percent, whatever number you want to put on it are the terrorists.

Now, granted they have hijacked the religion. I agree with that. That moderate Islamists have not spoken out strongly enough against the terrorists. I agree with that. But I don't think you can say Islam is a terrorist organization.

GRAHAM: Well, I have to challenge your numbers. One of the reasons we had this conversation the day of the second bombing in London was because of two stories that week. A group of British moderate Muslim (search) clerics gathered to talk about terrorism and denounce it, and they couldn't, because they couldn't agree that murder bombing was always wrong.

That same week a pollster asked British Muslims, "If you knew that there was a terror plot planned, would you reveal it to the police?" Only 73 percent said yes. Twenty-seven percent of British Muslims said they would let their fellow British citizens die. And here's why...

O'REILLY: OK. Those are good stats. Those are good stats and they're interesting. But we did a story last night here on the United Nations failing to condemn terrorism, and I can't say the U.N. (search) is a terrorist organization even though they won't condemn terrorism.

You see, you have got to be very, very careful. Look, you're a linear, logical thinker. All right? I can tell, just by talking to you. A leads to B leads to C. But sometimes that doesn't add up.

I think most Muslims in this world are afraid. They're afraid that they're going to get hurt if they speak out against the terrorists. That's what I believe. I could be wrong. But I don't believe that Islam is a terrorist organization.

Now...

GRAHAM: Here...

O'REILLY: Go ahead.

GRAHAM: There are three things going on. One is there's a theology that feeds terrorism. I don't claim to understand it. I'm not an expert at all. All I know is what I'm told. Iran is a nation governed by Islamic law and religious leaders. It's the No. 1 terrorism exporting nation in the world.

O'REILLY: But that's the government. That's the government of Iran. It's not...

GRAHAM: The mullahs are preaching -- the mullahs are preaching the violence. They may be wrong. They may be kooks. But when every poll shows that tens of millions of Muslims around the world continue to say that in some cases violence against innocents is OK, and when Islam is set up that you cannot expel the bad doers.

You know, this guy Bakri that you've talked about that scares the snot out of me over in Great Britain, I keep asking Muslim leaders, why don't you expel him? They say, "Well, we can't."

That's not a solution. That's an excuse. If you don't kick out the killers. If your theology feeds the killers, and if millions of your members support the killers, even though they're a minority, you have in my opinion a terrorist organization. Now, if I'm wrong, fine, but don't ban me, don't censor me.

O'REILLY: I disagree with your labeling of the religion as a terrorist organization. Now, should you have been fired? I wouldn't have fired you. But the Islamists put heavy pressure on WMAL to get you, right?

GRAHAM: What happened is I made the statements on the Thursday of that bombing. The next day again I said it again. The next Monday, the next Tuesday, station management had no problem until CARE (search), the Council of American Islamic Relations, announced that I had to be punished.

Suddenly everything changed, and I was suspended. Then they said that's not enough. They said that's not enough. You have to be fired. And sadly, ABC/Disney gave in.

Now my question is, tell me one terrorist attack that's going to be stopped because we stopped this conversation.

O'REILLY: Michael Graham, thank you for coming on the program. We appreciate it.

GRAHAM: Thank you. Thank you.

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