This is a partial transcript from "The O'Reilly Factor," January 4, 2006, that has been edited for clarity.

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BILL O'REILLY, HOST:

Continuing now with our lead story, the culture war erupts on "The David Letterman" program. One footnote, millions of Americans, especially younger ones, do form perceptions on politics and issues by watching and listening to entertainers. That is a fact of a life here in the USA.

Joining us now from Washington, FOX News analyst Juan Williams. And from Los Angeles, entertainment reporter Judy Wolf.

Well, that ought to have amused you, Ms. Wolf, did it not?

JEANNE WOLF, ENTERTAINMENT JOURNALIST: Well, I've got to give it to you, you know, Bill, for the first time, I'd have to say that you were actually funnier than David. And that takes a lot of doing for me to say that because I'm a big fan of his.

I also have to say that I'm sorry to tell you, I do not think this is a significant moment in a television you think it is, because I don't think there's a culture war.

I think it was kind of a one upsmanship contest on a late night show with two guys with very differing opinions. Though I must say in fairness, I certainly didn't expect David to be so disdainful of you and, as a host, to be so openly, kind of, almost embarrassed that you were on his show.

O'REILLY: You don't believe there's a culture war, Ms. Wolf? You don't think there's a culture war in this nation?

WOLF: No, I don't think.

O'REILLY: Really?

WOLF: Oh, I certainly don't think there's a Hollywood conspiracy, where everyone agrees that God is not important and that we're the enemy in Iraq.

You know how I saw it last night? I almost thought — ever been out and you see a guy with a girl that, you know, is not so great looking or a little to sexy looking and he's busy telling everybody that's not my date, she's just somebody sitting with me. We're having a meeting. This is my cousin's friend.

I felt like David Letterman was kind of saying, well, O'Reilly's an important guy, but he's on my couch, but I just don't want you to think I agree with him.

O'REILLY: Well, that's right. He was playing to his crew. And that's fine. It's a show, he can do what he wants. But I'm a bit surprised, Jeanne. You're a very smart woman.

Let me tell you, you're dead wrong. There's a culture war here. And the entertainment industry is a part of it.

How do you see it, Juan?

JUAN WILLIAMS, FOX NEWS POLITICAL ANALYST: I think there is a culture war in the country. I must say I was surprised, given his antagonism towards you, that he had you on the show. In some sense, it's like someone inviting you into their house and you find out you've been invited by, you know, John Wayne Gacy, the clown killer. Because here he is saying oh, I'm just throwing spitballs.

Spitballs? He said he doesn't believe 60 percent of what you say, Bill. This was a knife fight. And I do believe it was over culture. When you think about him saying that some of the, I think, horrible things that he said to you, I'm surprised you don't have a black eye this morning.

O'REILLY: Well, you know, look, I didn't take it that way. I thought that the Cindy Sheehan thing set him off. But I don't think he — I really don't think he knows what we do here. And he pretty much admitted that, Juan.

WILLAIMS: Right. He says he doesn't watch the show, but.

O'REILLY: So he's forming his opinions on.

WILLAIMS: It's not a fair and balanced show.

O'REILLY: Yes. I mean, he's forming his opinions on what his crew tells him. And that is a problem in this country, because as I mentioned, a lot of people get their perception of politics and people from the entertainment industry.

And Letterman and Leno and Jon Stewart and these guys do the riffs every single night. "Saturday Night Live" does it as well. And if you don't know what you're talking about, you take away that Bush is an idiot, that all the traditionalists are — want a theocracy. And this is what you take away.

WILLAIMS: You know.

O'REILLY: And look, I let Letterman genie take the interview where he wanted to take it. I told his producers — this is the fourth time I'm on the program, I believe. That you know, I was happy to talk about whatever he wanted to talk about. He wanted to have a few laughs. I got these crazy Christmas examples for you.

Letterman didn't - he sincerely didn't believe what I was telling him about Christmas, about the Memphis, Tennessee library. He didn't believe it.

WOLF: I think he believed it, but I don't think that he took it as seriously as you did.

O'REILLY: What do you mean seriously?

WOLF: And you know, I think.

O'REILLY: I mean, I'm just telling you.

WOLF: .that if you were at my house.

O'REILLY: .I can give you 50 examples.

WOLF: I would have been very embarrassed with that exchange. You wanted to give him 15 examples. And he was in his own kind of bumbling way trying to explain to you that you were making too much out of an issue that you could find examples for.

Look, I don't think we commercialize Christmas. Plenty of people said `Merry Christmas'. Plenty of people also said.

O'REILLY: No, a Gallup poll disagrees with you. I mean, look, I deal in facts here. I mean, David deals in humor. I deal in facts. A Gallup poll comes out, says 69 percent, Juan and I discussed this, of the American people think that it's disrespectful what's going on in the country. That's a lot of people, Jeanne.

So if you in Hollywood, and you don't think it's happening, and Letterman doesn't think it's happening, you're wrong. 69 percent of the people in the country think it's happening in the country.

WOLF: I can tell you, Bill, that we mustn't.

O'REILLY: That's a lot of people.

WOLF: We must not respond to just yea or nay polls. Are you against the war? Are you for the war?

O'REILLY: Not a yea or nay poll. The questions were very, very topical. And whether you agree or not, it's in play. It's in play.

And — but the Cindy Sheehan thing is what really set him off, Juan.

WILLAIMS: Oh, I don't think.

O'REILLY: He believes that because this woman lost her son.

WILLAIMS: Right.

O'REILLY: .that she can go out and say anything she wants to say.

WILLAIMS: Well, you know, I thought.

O'REILLY: And I feel very differently about it.

WILLAIMS: .I thought he took a cheap shot at you there. Because you know, he says to you, oh, have you lost a relative in armed combat? Well, you could have shot back to him, have you lost one, Dave?

O'REILLY: No, I'm not going to play that game.

WILLAIMS: Well, I mean.

WOLF: No, that isn't the way he should have answered.

WILLAIMS: .I think that's what was going on.

No, let me just say.

WOLF: The answer is we all lost someone.

WILLAIMS: Let me just say, I think there were two issues that came up, where the fact that you're a journalist was quite clear. And the fact that he's not, and he's an entertainer, a comedian was quite clear.

One was about weapons of mass destruction. He wants to blame it all on the Bush administration. He doesn't even want to go back and say, well, wait a second, the CIA during the Clinton years had the same info. He doesn't want to talk about a fact that you introduced that the British intelligence, the Russian intelligence, Egyptian intelligence, that they had the same thing.

He just wants to dismiss that and go right back to attacking President Bush and his administration.

WOLF: I got to interrupt.

WILLAIMS: So I think that was real.

O'REILLY: Go ahead, Jeanne.

WOLF: I'll interrupt and quote.

O'REILLY: Go ahead. Jeanne, go ahead.

WOLF: I've got to quote Bill O'Reilly on "David Letterman" last night, where he said something to the effect of we have to respect each other's opinions. You can't dismiss David Letterman's sympathy of Cindy Sheehan.

O'REILLY: I'm not dismissing it.

WILLAIMS: No.

O'REILLY: I think it was absolutely genuine. I'm not dismissing it. I think he was absolutely sincere in what he said. I think he's wrong. I think he's dead wrong. I don't think you can call terrorists freedom fighters. I think that's really insulting to people who are dying or people, who lost people on 9/11, and who lost people in Iraq.

WOLF: Bill, you also — I also think it's going much too far to say we get all of our opinions from entertainers. We watch the news. We read the news.

O'REILLY: All right, I didn't say that, Jeanne.

WOLF: There are a lot of serious people.

O'REILLY: I said a lot of people.

WOLF: .in and out of Hollywood.

O'REILLY: ...particularly young Americans.

WOLF: ...a lot of people in and out of Hollywood.

O'REILLY: get their perceptions from there.

WOLF: ...that see these issues as very complicated.

O'REILLY: All right.

WILLAIMS: I do think this was about the culture, though. I think you saw it right there.

O'REILLY: Juan, I'm with you 100 percent on that. I know it was. But listen.

WOLF: I want a rematch with more fun.

O'REILLY: All right. Hey, I'm up for it anyway. I'll go back on Letterman anytime he wants me. I enjoy the joust. Jeanne, Juan, thanks very much.

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