This is a partial transcript of "Special Report With Brit Hume" from Nov. 22, 2005, that has been edited for clarity.

BRIAN WILSON, GUEST HOST: The Chairman of the Joint Chiefs of Staff, General Peter Pace said Tuesday that the number of U.S. and coalition troops in Iraq could drop significantly under the right conditions.

At the same time an incident Tuesday in Tikrit gives evidence that there’s still much work for troops to do there. Fox News Pentagon correspondent Bret Baier reports.

BRET BAIER, FOX NEWS CORRESPONDENT: A ceremony marking the handover of the presidential palace in Saddam Hussein’s home town of Tikrit from U.S. control back to the Iraqis was interrupted by a mortar that landed about 300 yards away.

Dignitaries, including the top U.S. commander and the ambassador, were sent scrambling. No one was hurt and the ceremony continued minutes later. In an exclusive interview with FOX, the chairman of the joint chiefs, General Peter Pace said despite the mortar attack that handover is significant.

GEN. PETER PACE: This is the 28th facility that used to be under the control of the U.S. that we have now closed because we no longer need it or turned over to the Iraqis so that our total footprint is going to come down as the Iraqi capacity builds.

BAIER: Knowing what you know about Iraqi forces right now, if U.S. troops were to leave in six months, what would that mean for Iraq?

PACE: What we want to do is six months from now have only the amount of coalition and U.S. forces still needed. And so the Iraqi people will have a lot to say about the general conditions of security in their own country.

Six months from now it’s conceivable that we could have a major sea change in the way that the Iraqi people are looking at themselves.

BAIER: The Iraqi leaders have been very vocal that they believe that U.S. troops could be out of Iraq by the end of next year. The interior minister said it the other day. When you hear that do you feel that’s realistic?

PACE: I feel good that Iraqi leaders believe that. Because that means that their intent is exactly what we want it to be, which is for them to take over their own responsibilities as quickly as possible. So when an Iraqi leader says whatever timeline they want to be on or they believe it can be done by a certain time, terrific.

Let’s work together and see if we can meet those time lines. But understand that it’s not the timeline itself, but where you are, what the conditions are that allow you to make a conscience leadership decision as to whether or not it’s the right time to do it.

BAIER: What about the heated debate in Washington over the future of U.S. troops in Iraq?

PACE: Debate is not bad. Debates are good. But we need to have all the facts on the table so people can have a dialogue. Try to get the emotion out, and try to get the facts in, and the facts as I know them are incredible progress, very steady progress, and every reason to believe in continuing progress.

The fact that we stay with this and we do not lose our will, we keep our patience, we will be successful and we will protect this country.

Watch "Special Report With Brit Hume" weeknights at 6 p.m. EDT.

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