This is a partial transcript of "Special Report With Brit Hume" from Jan. 6, 2006, that has been edited for clarity.

(BEGIN VIDEO CLIP)

SHLOMO BENIZRI, KNESSET MEMBER: You asking me about the new party of the Prime Minister Sharon -- about Kadima -- I don’t think that they have any future. Because all this party was one man, it was Ariel Sharon. And if he will not be there, I don’t think that they have any future.

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JIM ANGLE, GUEST HOST: Soldier and statesman, Ariel Sharon, has been such a presence in Israel for so many decades that his looming departure from public life is hard to fathom for many. What does it mean for his new political party, Israel’s upcoming election and above all, Middle East peace? Joining us is a man who has known and dealt with Sharon for years, Dennis Ross, U.S. point man on the peace process for the first President Bush and for President Clinton, and a FOX News foreign affairs analyst. He joins us now.

Dennis, thanks for coming in.

DENNIS ROSS, FRM. U.S. ENVOY TO ISRAEL: Nice to be here.

ANGLE: Let me ask you first, Sharon really is a unique figure in Israeli politics, in part because more than any other Israeli politician, he always seemed to have a crystal clear view of what it took to provide for Israel’s security, except that that view changed dramatically over the years.

ROSS: Well, what was interesting is Sharon was misread by many people for a long time. They saw him as ideological because he believed in the settlements movement. But everything that Sharon was governed by, his definition of security. He was excessively practical.

Now, from his standpoint, when he looked at security, looked at the land, for a long time he thought holding the land was the key to Israel’s security.

When he became prime minister, he looked at a different reality. He now, as prime minister, he was a national leader, not an oppositional leader. He could look at the importance of the land, but he also had to look at the importance of demographics. And the one thing that was important for him above all else was to ensure that Israel was secure not only militarily, but in terms of being Jewish and Democratic, and holding all the territories meant that you couldn’t be both Jewish and Democratic.

So he didn’t change in terms of his priorities, but he changed in terms of his understanding of how he could achieve those priorities.

ANGLE: So he shifted from his long-standing view that he needed to dominate the Palestinians, and especially the terrorists militarily, to one that turned into basically disengagement from the Palestinians.

ROSS: It’s true. He wasn’t going to be soft on terror. And that’s what gave him such enormous credibility within Israel, because everyone had a comfort level with him on that issue.

But by the same token, he knew that wasn’t the only answer, because there was another problem out there he had to address. And he did. What he did in getting out of Gaza unilaterally was unprecedented. He didn’t get anything from the Palestinians, but he was acting to say I’m going to define our needs. I’m not going to make our future dependent upon what may be a dysfunction and irresponsibility on their side. We won’t put our future in their hands. We’ll define our future by our own hands.

ANGLE: It is ironic that Sharon, who was long-hated and feared by the Palestinians, became the Israeli leader who offered the opportunity of a Palestinian state.

ROSS: I’m often struck by ironies in the Middle East. You almost see it at any given moment. But it’s true what you’re saying. They would not have predicted that Sharon would have been the one to recognize Palestinian statehood first as an Israeli prime minister explicitly. But he was also the Israeli prime minister who went to his own party, Likud, and he said I know you don’t like the word occupation, but we have to end the occupation of Palestinians. We can’t occupy the Palestinians as a people.

And he adopted statehood as a principle. And he did the unprecedented. He was prepared to dismantle settlements and withdraw from Gaza unilaterally. And it’s pretty clear, the main reason he left his party was because he planed further bold moves and he didn’t want to be constrained by his party and what their attitudes were.

ANGLE: Further bold moves, meaning pulling out of the West Bank?

ROSS: At least in part. Not all. But he was planning, again, to create borders that he felt met Israel’s strategic needs from a security standpoint, but also, Israel’s needs from a demographic standpoint.

ANGLE: Now, before we get to Israeli politics, what do the Palestinians do now? They’ve spent so much time sort of playing off Ariel Sharon and trying to figure out how to deal with him. If he passes from public life, what do they do now to secure their own future?

ROSS: You know, one of the ironies, again, of the situation is that as long as you had Ariel Sharon there, he was a driver and the Palestinians had the luxury of not doing anything. I mean, Abu Mazen could complain about some of the things that Sharon might have in mind, but the fact is he knew Sharon was probably going to get out of additional territory and it relieved the Palestinians necessarily of acting.

Now, the irony, again, in this situation is that they’re now in a position that if they want something to happen, they can’t count on the Israelis being the driver. They’re going to have to get their act together. They’re going to have to begin to operate in a way that shows that they can govern themselves and they’re going to have to be prepared to create their own initiatives and not always count on the Israelis to come up with the initiatives.

ANGLE: Now, the Palestinians are having elections in a few weeks. Hamas has been showing well. Does that suggest that Hamas is putting more stock in the political system, or just that they think they have a chance to take over?

ROSS: I think it’s the latter. I think the reason that they are embracing the political process is because they think they can come to dominate the Palestinian Authority. If they were truly transforming themselves into a political actor, they would give up their weapons.

The fact they hold weapons, they may say it’s about the Israelis. The fact is it’s about the Palestinians. It’s to keep leverage on the Palestinian Authority. If you like the process as it is, that’s fine, and if you don’t, you can opt out at any time. But you always have your weapons as a lever.

And one of the problems right now is that Hamas has a kind of growing popularity because they’re not corrupt. They deliver services. And they’re disciplined. And Palestinians today are reacting to the chaos that’s in Gaza, reacting to the chaos in the West Bank, the lawlessness they want to change. And one of the things that Abu Mazen has to do and the Palestinian Authority has to do is demonstrate they can produce that change. And so far they haven’t done a very good job of it.

ANGLE: Less than a minute. What does that do? What does the situation in the Palestinian territories now do to Israeli politics without Ariel Sharon dominating them?

ROSS: Well, the interesting thing here is that the Palestinians would be wise to keep in mind that voting for Hamas isn’t just a protest. There’s a consequence. You vote for Hamas, you might affect the Israeli elections in a way you don’t like. You certainly might also affect what happens with the outside world and how you’re dealt with.

So right now I think Palestinians need to look at Hamas now through the lens of how it affect all of their surroundings.

ANGLE: OK. Dennis Ross, thanks very much. Appreciate you coming in.

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

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