This is a partial transcript from "The O'Reilly Factor," August 2, 2006, that has been edited for clarity.

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BILL O'REILLY, HOST: In the "Impact segment" tonight, ground fighting in Lebanon seems to get more intense. Reporting on the ground is far more difficult in the Middle East than say Iraq because Israel and Hezbollah generally keep reporters far away from the action, while the USA, of course, allows journalists up front.

Our people say that the action today was very intense. With us now, journalist Dan Rather.

Here's the problem with this reportage on the — and you know this as well as anyone. The pictures tell the story, but the pictures don't really give you any perspective. So Qana, when you have dead babies, and now there are charges that that footage is staged, you know, that the babies were brought back and in and out and one of them had rigor mortis. They influence public opinion like crazy. Whereas OK, maybe it was an accident. We don't know. The justification for the war is you've got to win the war, right?

DAN RATHER, FORMER CBS NEWS ANCHOR: Well, I think it's important to keep in mind what you said — the pictures tell a story. They don't tell the story. And television has tremendous advantages. Pictures can take you there, really transport you right there.

But television — and I'm a person who spent a great deal of my professional life in it, I think I know its strengths and weaknesses. Its weakness is depth. And what's missing in most war coverage is context, perspective, background, history, and analysis. Television, depending so heavily on pictures.

And even when someone is delivering analysis or some good on the ground reporting, the tendency is to label what it what we call "wallpaper." Just take stock footage.

O'REILLY: Yes, play it behind it.

RATHER: And what gets lost doesn't get reported is the bigger picture. An example, Israel now has a border with Iran effectively, a sworn enemy and a very powerful one of Israel iss butted up against Israel in southern Lebanon.

O'REILLY: Because Hezbollah is doing their bidding.

RATHER: Exactly. Metaphorically, Israel now has a border with Iran. I don't think that's widely understood. I also don't think it's widely understood that this is a power play. It does involve, of course, Israel, Hezbollah, and the United States. There's a big power play between the Saudis on one side and the Iranians on the other.

Iran is a rapidedly expanding power. Right now, in my opinion, the big winner in Gulf War II, up to and including now, has been the Iranians. They spread their influence enormously through the region, not just in southern Lebanon.

O'REILLY: Yes, tied us down in Iraq. And now are thinking they're ahead.

But here's the problem with American reportage. Some networks give moral equivalency to Hezbollah in their reporting of this war.

RATHER: I agree that that's a problem.

O'REILLY: Do you agree it happens?

RATHER: I agree it happens. And I agree it's a problem. It's a problem that those of us in journalism have been reluctant to address. I do not exclude myself from this criticism. Reluctant to address that Hezbollah is a terrorist organization.

O'REILLY: Right.

RATHER: It's committed to the destruction of Israel. It isn't committed to trying to just gain territory. It's committed to its destruction.

O'REILLY: Right. So they don't want peace, Hezbollah. I mean, a ceasefire helps Hezbollah.

RATHER: It may very well help Hezbollah.

O'REILLY: Of course it does.

RATHER: And that's part of what is Israel's dilemma at the moment. How long could it keep going with what's going now. Already, you know, there's talk of, well, will the ceasefire be over — will it be in effect in a week or in two weeks?

O'REILLY: Well, it depends on how well they do on the ground. They're putting a buffer zone in. They're going to wipe out these missiles. And that's their mandate.

But see, what upsets me is the moral equivalency that some networks give.

RATHER: Yes.

O'REILLY: Not us. And then Iraq, for example, confusing, complicated situation that anti-Bush people slap a loser tag on. It's a loser! That's it, it's a loser.

RATHER: Well, it's not necessarily in the long pull of history a loser. But — and you and I may disagree about this — the news from Iraq, any way you cut it, has not been good.

O'REILLY: No, absolutely right.

RATHER: For a very, very long time. And there are real questions about — set aside the question whether we should have gone to Iraq in the first place, which is a big set aside. Has the war been conducted...

O'REILLY: The way it should be?

RATHER: ...implemented in the way it should?

O'REILLY: All right, we're going to continue our conversation with Mr. Rather.

(COMMERCIAL BREAK)

O'REILLY: Continuing now with Dan Rather. Here's my problem on the Iraq reportage. I agree with you that the war has not been waged in the way it should have been. And many, many mistakes have been made. And you can blame — put the blame wherever you want. And I think that's legitimate as certainly as a discussion.

But the hatred, the hatred that has been brought to the discussion is way out of line.

RATHER: If you...

O'REILLY: We're a noble country.

RATHER: Yes.

O'REILLY: We are noble.

RATHER: Absolutely.

O'REILLY: We are doing a good thing in Iraq. And these people who hate Bush so much and then put that brand on us that we're the oppressors, we're the bad guys, we kill people for oil, those are disgraceful people.

RATHER: If you're going to talk about hatred, it goes both ways. And hatred begets hatred. And you know, Bill, and I think you'll acknowledge that on the other side of this equation, what you might call the pro-Bush side of the equation is a deep and abiding hatred for people on the other side.

Now what's happened fairly recently in this country is the polarization of the country — and it's something you have to worry about with a world in crisis. And the United States of America in deep trouble in a lot of ways, Iraq being only part of it. A war against terrorism being the overarching part of it.

We need — you know, it's not by accident that our slogan in this country, written on our money and our buildings in Washington, "united we stand." The idea, that simply because someone disagrees with your political point of view or your ideological point of view, that you must hate them and you must vow to destroy them, I would say is not consistent with the American character, nor is it what most Americans believe.

O'REILLY: It isn't. And it hurts us on the War on Terror because the terrorists believe we don't have the will to fight them, because we're divided. But I have never seen so much vitriol. And I mean, they worked Clinton over within an inch. You know that. You were in the chair. But they hate Bush twice as much as the Republicans hated Clinton.

RATHER: I disagree with that.

O'REILLY: Oh, boy, you should — well, then go on — you're working for the blogs now. You'll see it. I mean, it's — and if you give the Bush administration a fair shot, they come after you . I mean, the Republicans never did that in the Clinton days.

Anyway, all right, be that as it is, I want to get to Fidel Castro. You know Castro. He's a cutthroat in my opinion, am I wrong?

RATHER: He's a dictator. There's no question about it.

O'REILLY: I think he's a cutthroat. He's a murderer.

No question, his record is very clear in that record. But again we have to deal with the here and now. I would recommend with Cuba, and I'm not an expert on Cuba. I've been there many times. I have interviewed Fidel Castro eight times, maybe nine.

But No. 1, things are rarely as they appear to be, particularly in dictatorships such as that. We don't know what the situation is in Cuba now. Is Castro dead? I think it's a possibility, not a probability.

What they've effected is a transition. If it turns out that they need a temporary transition where they get to try out the post-Castro era, and if it goes down pretty well internally, and for that matter externally, they'll stick with it. If not, if Castro's able, he'll come back on later.

I think the important — this is where the context is so important, Bill. That Cuba fits into an underreported story in my judgment. There's a battle being waged for control and influence of northern South America with Hugo Chavez in Venezuela.

O'REILLY: You bet.

RATHER: Chavez and Castro are two of a kind. And this is an alliance that's very dangerous...

O'REILLY: You bet.

RATHER: ... for the United States of America. And I read something the other day. Somebody said Chavez's influence is on the wane. I don't think there's any empirical evidence...

O'REILLY: You're not buying $3 billion in arms from Putin, our pal Putin.

Now, I've got to ask you, what is this Internet thing you're doing with Mark Cuban , the owner of the Dallas Mavericks? Are you going to be an Internet guy? What is it you are you going to do?

RATHER: Well, I'm going work for HDNet, high definition. Premium super high definition.

O'REILLY: And you're going to do what?

RATHER: "Dan Rather Reports", a weekly program.

O'REILLY: This is on — this is on cable?

RATHER: It's on cable or satellite. You can get it either way.

O'REILLY: OK.

RATHER: High definition. Premium high definition hour. Hard-edged field reports, investigating stories, and interviews. If you can arrange for me to get an interview with the leader of North Korea, I'll be gone before this program is over.

O'REILLY: OK. So you're just going to do what you always did, but you're going to do it in a different venue?

RATHER: In a different venue. And not just as a venue with a different attitude.

O'REILLY: A different attitude? You're going to be conservative guy? Just kidding.

RATHER: I wouldn't bet the money on that. I wouldn't bet trade or money on that.

O'REILLY: No.

RATHER: But you know Bill, hard news needs backers who don't back up.

O'REILLY: They need people who love it, and you love hard news. Like you or not, you're a hard-news guy.

RATHER: You bet.

O'REILLY: You're welcome here any time, Mr. Rather.

RATHER: Thank you very much, Bill.

O'REILLY: Appreciate it. I enjoyed it.

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