This is a partial transcript from "The O'Reilly Factor," November 18, 2005, that has been edited for clarity.

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BILL O'REILLY, HOST: Our top story tonight. Another view on this, joining us from Los Angeles, Steve Emerson, author of the book, "American Jihad: the Terrorists Living Among Us." Mr. Emerson is perhaps the most astute analyst, I should say, of terrorism in the country.

It's pretty bleak. Pretty bleak picture. And I'm buying into it about 75 percent. I believe that this country isn't prepared to do what has to be done to defeat these people. What say you?

STEVE EMERSON, TERRORISM ANALYST: Well, I think to a certain extent, you're right. And Scheuer's right that there isn't a will, but I also think it's a larger problem to address the military conflict, Bill. It's a recognition that the Islamic militant threat is vast and that it requires a political response, an economic response. And to a certain extent, we have legitimatized radical Islamic groups by dialoguing with them, by bringing them into meetings with the government, by giving them assistance in the United States, financial assistance.

I think that's very dangerous. It goes beyond the whole issue of a military conflict, which of course is one part of it.

O'REILLY: But we have almost a phony war going on here. Remember the phony war that nothing happens, we're safe? Yes, we got hit on 9/11, but that was a long time ago.

We're all having Thanksgiving coming up, the holidays, we're shopping, the malls are packed. And meantime, these people are planning our destruction. And what are we worried about? Valerie Plame. What are we worried about? Whether WMDs were misled. And meantime, the Mexican borders remains wide open for four years. And I'm saying to myself we're just not smart enough to realize what's going to happen.

EMERSON: Listen, I think implicitly, there has been a failure to communicate what is at stake here. And I think Congressman Frank Wolf came back recently - relatively recently from Iraq basically stating that if we lose there and we cut and run, and a vacuum is created, there will be an Al Qaeda state that will use it as a launching base to attack everyone.

O'REILLY: Oh, there's no question. Yes, but.

EMERSON: And.

O'REILLY: .Congressman Murtha comes out today. He gets front page exposure. This is a Pennsylvania congressman. Cut and run, we can't win, defeatist attitude.

But the bottom line on this, Steve, is that the American people 300 million Americans are not prepared to make a personal sacrifice at this point, because we're not demanding the borders be secured, more troops be put into Iraq, if that's what we need. We're not demanding performance. We're just letting the press slug it out.

EMERSON: Listen, to a certain extent, the press will follow whatever is a good story, but it's incumbent upon the government essentially from the president on downwards to communicate to the American public the nature of the threat.

They don't - the American public doesn't feel a threat today.

O'REILLY: Right.

EMERSON: It feels it in a obscure way. It feels it maybe when there's a bombing in Amman. It feels it maybe when there's a bombing in London, but then it dissipates over the next 72 hours.

To a certain extent, there really needs to be a whole recalculation of how it's presented in terms of the radical, Islamic threat, Islamic fascism, whatever we want to call it. But that the reality is that it's a more larger problem than just an Al Qaeda strike.

O'REILLY: But in our politically correct society, where you can't say anything bad about anybody, they're not going to personalize the threat and say it's a Muslim threat. They're not going to do it because of political correctness.

But here's what disturbs me. The Kennedy School [did a study] and I went to the Kennedy School at Harvard, and they came out and they said look, you've got 50 percent of the nuclear arsenal in the Soviet Union that's unaccounted for. OK? It's floating. We already know that the Pakistani crazies can design a nuclear device. And we already know that anybody could sneak in here.

Now when you're faced with that kind of a threat, why are we arguing about WMDs before the Iraq — Why? Why aren't we saying here's the WMD threat? Why isn't that on the front page of every newspaper? I'm not getting this.

EMERSON: Listen, in a large section, the reality is that it becomes politicized. And therefore, there's an instant gratification basically saying gotcha.

O'REILLY: Yes.

EMERSON: .by those who are criticizing the president.

But in another sense, it — the president and the administration need to be putting out more information about the threat.

Number two, they undercut themselves. And I don't mean the president himself, but rather, the administration and members of government undercut a whole war when they end up legitimizing that be groups that embody the politics of al Qaedism, Hamas, or Hezbollah, or Islamic jihad, or any fundamentalist groups.

So in a certain sense, they've neutralized themselves. And we have to understand that these groups are operating throughout the United States. They're operating throughout Europe. And it's a war that's without end.

O'REILLY: Right.

EMERSON: And you're 100 percent right. We're going to have to make sacrifices.

O'REILLY: We're going to have to make sacrifices. We're going to have to tell the press to knock it off. The big thing is we can't torture anybody. No coerced interrogation. And I'm sitting here going, you know, Cleveland could be gone tomorrow and this is what — this is page one.

Steve, thanks very much. As always, we appreciate it.

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