This is a rush transcript from "The O'Reilly Factor," November 27, 2007. This copy may not be in its final form and may be updated.

Watch "The O'Reilly Factor" weeknights at 8 p.m. and 11 p.m. ET and listen to the "Radio Factor!"

BILL O'REILLY, HOST: Now for the top story tonight, if the Democrats lose the Iraq issue, what issue will take its place? Joining us now from Chicago, Congresswoman Jan Schakowsky from Illinois. Here in the studio, Congressman Gary Ackerman from New York, who was against the surge.

So you were you wrong and you're a savvy Middle East guy.

REP. GARY ACKERMAN, MEMBER OF THE HOUSE FOREIGN AFFAIRS COMMITTEE: Well, I don't know that I was wrong.

O'REILLY: Oh, come on, come on. By every measure, I got 27 measures here, congressman, that say the situation has improved countrywide. Come on.

ACKERMAN: But it doesn't say why, Bill. If you — the situation has improved. And something is happening there. It could be because of the surge.

O'REILLY: It could be?

ACKERMAN: It could be because of the surge. Even the State Department briefings of their staff, they're not crediting the surge for doing it. It could be that the Iranians aren't providing the IEDs. It could be the terrorists are just laying low, the insurgents are just laying low. It could be that the surge is working. It could be a combination of all or some or all those things.

O'REILLY: Alright. Let's assume, because we don't believe in incredible coincidences here, that the improvement started when the surge started because it did. And there is a graph line that you can see. So even if, by some incredible happening, it isn't the surge, it's something else, some mystical thing happened, the issue is now diminished. The Iraq issue is now diminished. Would you not concede that?

ACKERMAN: It's diminished for the moment.

O'REILLY: For the moment. Are you hoping it comes back?

ACKERMAN: Well...

O'REILLY: I'll get to you in a moment. Are you hoping it comes back?

ACKERMAN: The only thing I disagree with...

O'REILLY: Wait, wait, wait, wait...

ACKERMAN: No, I...

O'REILLY: Are you hoping it comes back?

ACKERMAN: Oh, absolutely not.

O'REILLY: You want us to win in Iraq?

ACKERMAN: We have to win in Iraq.

O'REILLY: Excellent.

ACKERMAN: We have to win all over the world.

O'REILLY: I was going to hit you with your own flower if you...

ACKERMAN: I'm a tough guy, Bill.

O'REILLY: I know you're tough.

ACKERMAN: I just look old.

O'REILLY: You're from Queens.

All right, Congressman — Congresswoman, you voted against the war in Iraq. And I think you opposed the surge as well.

REP. JAN SCHAKOWSKY (D), ILLINOIS: Absolutely.

O'REILLY: Mm-hmm.

SCHAKOWSKY: Well, first of all, if you call 57 killings, and three suicide bombings, and 40 people wounded in the last nine days, maybe compared to other casualty rates, that that's a — you know, an improvement.

But the other thing is if you recall, Bill, the surge was intended to create the political space for reconciliation in Iraq. And so far, unfortunately, I mean, we're always glad when there are less American and innocent Iraqi deaths. But there is no prospect right now for the kind of political reconciliation that will actually achieve the goals not only of the surge, but ostensibly for a democracy in Iraq.

O'REILLY: Well, you're correct about that. The Iraqi government is still a mess. And it is...

SCHAKOWSKY: Right.

O'REILLY: ...just a frustration for every loyal American to watch those clowns over there in Baghdad self-destruct their own government.

But here's the deal. The surge has worked. You were wrong.

SCHAKOWSKY: No.

O'REILLY: All the Democratic candidates were wrong. Congressman Ackerman was wrong and you should admit it.

SCHAKOWSKY: Well, wait.

O'REILLY: Wait, wait, wait.

SCHAKOWSKY: Bill, Bill, you can - no, but you can say...

O'REILLY: Just as the Bush administration said...

SCHAKOWSKY: ...that over and over. No, but Bill, you can say over and over again the surge has worked.

O'REILLY: Yes.

SCHAKOWSKY: But as defined by Petraeus and Crocker at the start of the surge, which was to create political reconciliation, we are as far from that as we have ever been.

O'REILLY: You're spinning the issue. The surge was...

SCHAKOWSKY: So you can repeat it as often as you want.

O'REILLY: Let me. Oh, I have to define something, because the congresswoman is spinning the issue. Petraeus has no control over the Baghdad government. None. What his job was to do was to provide security so that reconciliation could take place.

SCHAKOWSKY: Which it has not.

O'REILLY: Petraeus has succeeded in doing it. He has succeeded and so is the surge. The Iraqi politicians, as you accurately point out, congresswoman, have not stepped up. But don't say that the surge has anything to do with the Iraqi government. It does not. We can't control those people. Go ahead.

ACKERMAN: Let me — let me go back to basic premises, because whether something is working depends on where you started from or what you intended to do. The reason General Petraeus told us the 3.5 hours before our committee a month or so ago, we were there to build up the Iraqi forces to take over, so that the political process could work. And we would leave and start building down when the sectarian violence...

O'REILLY: And we're going to start drawing down now.

ACKERMAN: Well, yes, but listen to what we're saying here. We're there to stop the sectarian violence. We're not there to fight terrorism. And if you're talking about the war on...

O'REILLY: No, the war on terrorism? We've decimated al Qaeda.

ACKERMAN: No, we've not, Bill. We have not desecrated al Qaeda. Al Qaeda...

O'REILLY: Every report says al Qaeda is decimated.

ACKERMAN: Al Qaeda in Iraq didn't exist until 2003 after the war started.

O'REILLY: Congressman, that doesn't matter.

ACKERMAN: They weren't an organization.

O'REILLY: Every single report, including The New York Times...

ACKERMAN: They came into being. — Al Qaeda in general was — existed but not al Qaeda in Iraq.

O'REILLY: Congressman, I'm being very patient with you tonight. Every single report from U.S. intel, The New York Times, The Washington Post, says that al Qaeda has been decimated in Iraq. Every single one.

ACKERMAN: That's not true.

SCHAKOWSKY: Actually, there's a new report today, Bill, that — the al Qaeda is not decimated, that there could be...

O'REILLY: Where does that report come from?

SCHAKOWSKY: And I heard it on the radio, Bill.

O'REILLY: On the radio.

SCHAKOWSKY: And — no, but Bill, the point is that we have not seen enough — I'm not hoping for the violence to increase. But I think that as reasonable people, we have to wait and see whether or not we have really succeeded in permanently...

O'REILLY: All right.

ACKERMAN: Bill, I...

O'REILLY: Real quick, real quick. Go ahead.

SCHAKOWSKY: A downward trend.

ACKERMAN: I chaired the subcommittee on the Middle East. I get the intelligence briefings.

O'REILLY: Right.

ACKERMAN: There's a very mixed bag here of what's succeeding and what it's succeeding at. This is a war to end sectarian violence, not to fight terrorism. We have to refocus and refocus on Afghanistan, which you've done a good job in covering.

O'REILLY: All right. We're doing a great job if it's not to fight terrorism because I believe, and all the intel that we're getting, that al Qaeda in Iraq has been badly damaged.

Congresswoman, congressman, it's been a pleasure.

Copy: Content and Programming Copyright 2007 Fox News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2007 Voxant, Inc. (www.voxant.com), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, LLC'S and Voxant, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.