The following is a partial transcript of the Feb. 4, 2007, edition of "FOX News Sunday With Chris Wallace":

"FOX NEWS SUNDAY" HOST CHRIS WALLACE: Joining us now, one of the strongest supporters of the president's Iraq war policy, Senator Lindsey Graham, who comes to us from his home state of South Carolina.

Senator, we had another terrible bombing in Baghdad Saturday, killing more than 130 people. While the National Intelligence Estimate talks about the dangers of pulling out, it also says the following, "The intelligence community judges that the term 'civil war' does not adequately capture the complexity of the conflict in Iraq."

Senator, do you really think that sending another 17,000 U.S. troops into a city of six million is going to stop something that's even worse, more complex, than a civil war?

GRAHAM: Yes, I think additional troops would help dramatically. What's the biggest mistake we've made in Iraq? You talk about me supporting the president's policy. I've been saying for three years now that General Shinseki was right, and Abizaid and Casey were wrong, when they talked about the military footprint necessary to achieve stability.

General Petraeus' plan is not more people doing the same. And if anybody says that, they're not listening to General Petraeus. This surge has a military component. Seventeen thousand, five hundred additional troops in Baghdad would double the combat capability of the American military to hold areas cleared.

I see results that are in — that make me feel like this can work. The bombing was an act of terrorism to divide the country and to break our will and to topple the government.

But 17,500 more troops in Baghdad married up with the new Iraqi strategy of going into any neighborhood we need to go into to hold territory that was previously cleared will work to allow political reconciliation.

This idea that our key to success in Iraq is through Syria and Iran is naive. The things that unite Syria and Iran — the one thing that unites Syria and Iran is that they don't want a democracy in Iraq because it's a threat to their dictatorships, and that's what divides us from Syria and Iran.

So very simply put, we need to surge militarily, economically and political to allow the Iraqi government to achieve political reconciliation. That's the key to success in Iraq. And nobody will get a political deal with this level of violence.

We need more troops. We need more economic aid. We need more political assistance.

WALLACE: Senator, but the National Intelligence Estimate, the NIE, which came out at the end of this week is very pessimistic about what can be accomplished over the next 18 months even with a troop surge.

Take a look if you will, sir. "Even if violence is diminished, given the current winner-take-all attitude and sectarian animosities infecting the political scene, Iraqi leaders will be hard-pressed to achieve sustained political reconciliation."

GRAHAM: And what does the NIE tell us otherwise, that if we withdraw from Iraq in the next 12 months to 18 months, there will be a bloodletting Iraq, sectarian nature, that there'll be a problem between Turkey and the Kurds in the north, and that the problems in Iraq will spill over into a regional war.

So this is our dilemma. The best chance left for us to stabilize Iraq, in my opinion, is to surge militarily, economically and politically, allowing the political leadership of Iraq the opportunity to get some breathing room, to share the oil revenues with the Sunnis and do the other political deals they need to make to bring about stability.

If we leave, it is a death blow. If we say we're going to leave at a date certain, it will freeze every effort to reach political reconciliation. I can not guarantee you success, but I can promise you this: The day you set timelines and deadlines, it's lost in Iraq and it becomes a bigger war, not a smaller war.

So this is our last best chance, and I do believe General Petraeus knows what he's doing. I'm going to support him and I'm going to fight any effort by the Congress in a non-binding resolution to say there's no confidence in his new plan, because I have a lot of confidence in his new idea. And we should have done it years ago.

WALLACE: Senator, you and John McCain have introduced your own resolution that would set benchmarks for the Iraqi government...

GRAHAM: Right.

WALLACE: ... including — one of which is that they would keep their share of — their commitment to send more troops into Baghdad.

But Defense Secretary Rumsfeld — or Gates, rather, said Friday that Iraqi units are arriving in Baghdad at only 55 percent of the manpower that they were supposed to have. Haven't the Iraqis already started to break their promises to us on keeping their commitments?

GRAHAM: What we've got to do is judge them across the board. The resolution says that we have confidence in General Petraeus, that he will never be denied what he needs to implement this new strategy, and it realizes, Chris, that a million new American troops won't solve the problem.

The only way we're going to have success in Iraq is through political reconciliation, political compromise. The thing that I'm looking for is, number one, will they reach a deal on the oil. Will they allow the Sunnis a piece of the oil revenue in Iraq so the Sunnis would have something to fight for, not against?

Will they go after the militia? The biggest threat to this infant democracy, which is eight months old, is out-of-control militia groups. We're finally going to where the militias live and hide and we're making progress.

WALLACE: But, Senator, if I may...

GRAHAM: Yes, the Iraqi military needs to...

WALLACE: ... what do you make of the fact that the Iraqi units — here we have this big agreement with Maliki — we're going to send in more troops, you're going to send in more troops — and the Iraqi units are arriving at 55 percent manpower?

GRAHAM: I don't know enough of the details yet, but it's certainly something to watch and be concerned about. What I've seen and what I've heard is the Iraqis are fighting better. They're standing side by side.

And this idea of Senator Clinton that we're going to defund the Iraqi army and not provide security to the Iraqi political leaders to me is a dangerous thing to be publicly saying.

We're going to watch the performance of the Iraqi army. We're going to watch the performance of the politicians in Iraq, but we're not going to tell the enemy we're leaving. We're not going to empower Al Qaeda. We're not going to let Syria and Iran topple this young democracy by meddling.

We're going to stand with the forces of moderation, as imperfect as they are, and we're going to try to get this right by making up for past mistakes. We cannot have a democracy with militias roaming the country out of control. You can't have a democracy with 40 percent unemployment in Baghdad.

We need more American capacity across the board to help the Iraqis. In a year from now, if this thing fails, it will be a war a lot greater in nature than it is today. So that's why we need to get it right while we still can.

WALLACE: Senator, what do you think are the chances that any of these resolutions — your resolution with John McCain, the Warner compromise — that any of these resolutions will get the 60 votes they need to pass the Senate?

GRAHAM: I don't believe any of them are going to get 60 votes except the resolution not to cut off funding or put troop caps in place. I hope there's a resolution.

If the Democrats really believe this war is lost and this is just another Vietnam in another form, cut off funding. The worst thing this Congress could do, literally, is to let the troops go forward, after approving General Petraeus with no — unanimously, but say we don't believe in your mission; we're going to let you go, but we don't believe in your mission.

So these resolutions — the Warner-Levin resolution disapproves of the surge, and it doesn't allow any new reinforcements in Baghdad. Are you going to give the capital of the country over to the terrorists and to the extremists?

We have to deal with sectarian violence in Baghdad. We're either going to deal with it now or we'll deal with it later, and it will be a bigger problem later. So I don't think any of these resolutions should pass.

Former Senator Edwards had something right in this regard. Bush would ignore it if it did, and he should. He should ignore these non-binding political resolutions that mean nothing other than domestic political politics, and the enemy won't ignore them.

If we pass a resolution saying this is lost before it's given a chance to be implemented, the enemy will seize upon that, be emboldened, and our troops will be sent off in a disheartening fashion, because these resolutions are terrible ideas.

WALLACE: Senator, you talk about Senator Clinton and Senator Edwards, but the fact is there are a lot of Republicans — we count 16 — who have either opposed the president's troop surge or have expressed doubts about it.

How much panic is there in the Republican Senate Caucus when it comes to Iraq and 2008?

GRAHAM: There's a lot of panic. There's panic among the Democratic '08 hopefuls. They're panicking. Senator Clinton has gone from the middle of the road to the left ditch. I mean, everybody's trying to get to the left of each other in the Democratic primary for president.

WALLACE: How about in your party, sir?

GRAHAM: And we've got some Republicans who are — excuse me?

WALLACE: I'm saying how about your party.

GRAHAM: Oh, yes, we've got some Republicans that are worried about how this will play out for '08. And here's what I'm telling my Republican colleagues. A non-binding resolution that is a vote of no confidence, that says we can't fight in Baghdad, and just give the capital over to the enemy is not going to help you one bit in 2008.

And if you're looking at this whole year between now and 2008 — how to get re-elected, you're missing the boat. We should be united as a country to make sure we're successful in Iraq, because this is not about the next election. This is about decades to come.

And we're about to make a huge mistake I don't think Ronald Reagan would have made. You know, Jim Webb worked for Ronald Reagan. Well, he missed the economic message of Ronald Reagan, and I think he missed what Ronald Reagan did in the Cold War.

Now's the time for us to adjust our strategy, and not more of the same, but reinforce Iraq before it gets to the point that we can't turn it around. We still can turn it around.

A non-binding resolution is a political exercise that does nothing but harm to the war effort, in my opinion, and it's a small moment for the Senate.

WALLACE: Senator, we're going to have to leave it there. I want to thank you so much for talking with us. And please come back, sir.

GRAHAM: Thank you.