This is a rush transcript from "The O'Reilly Factor," February 7, 2008. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: Mitt Romney is out of the race, and John McCain speaks to conservatives.

(BEGIN VIDEO CLIP)

MITT ROMNEY: I entered this race because I love America. And because I love America, in this time of war, I feel I have to now stand aside for our party and for our country.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

JOHN MCCAIN: On the issue of illegal immigration, a position which — the vast majority of critics to the bill based their opposition in a principal defense of the rule of law. While I and other Republican supporters of the bill were genuine in our intention to restore control of our borders, we failed for various and understandable reasons to convince Americans that we were. I accept that. And I have pledged that it would be among my highest priorities to secure our borders first.

(END VIDEO CLIP)

O'REILLY: Joining us now from Washington, FOX News analyst Laura Ingraham.

What a very busy day today. She actually introduced Mitt Romney in his speech and talked to John McCain. So let's do the Mitt Romney thing first. Were you surprised? Is this a good thing for America?

LAURA INGRAHAM, RADIO TALK SHOW HOST: Well, I got 10 minutes notice before my introduction of Romney, which was fine. I mean, I tweaked my introductory remarks.

And when you ran the numbers, Bill, and when you looked at the states that were left, it was going to be very difficult for Mitt Romney. And I think he came to that realization.

And I've got to say, you know, I'm a supporter of Mitt Romney. You know that. But I thought the speech that he gave today was probably the best speech that he's given over the last few years. And it was a good way to go out. He wrote it himself last night. No one wrote it for him. And it was from his heart. And I think he did what he thought was right. And the conservative movement now figures out what to do next and regroups. And the new campaign for 2012 will start in probably two years.

O'REILLY: OK. Now, John McCain goes to the conservative PAC conference today. And we just played a little clip of him. Overall, what was the reception?

INGRAHAM: I thought the reception was pretty positive. I mean, I think he had a lot of his supporters in the room. And they didn't want to have a lot of these booing moments at CPAC. And that wouldn't have looked good. And I think you heard the emotion in the room in the clip you played about immigration.

And I think — he just is not going to get around the fact, and I don't think he really wants to get around the fact, that he is more moderate than the conservative base of the Republican Party. And he was pretty unabashed in saying that this is who I am, and we don't agree on everything, but I'm going to respect you, and I hope you respect me. And I hope we can work together. And that was pretty much his speech.

O'REILLY: Now do you think that will happen? Do you think some conservatives will stop the McCain bashing and say, OK, he's better than the alternative on the Democratic side?

INGRAHAM: Well, first of all, the McCain bashing phrase is a little bit unfair.

O'REILLY: Oh, it's been pretty brutal in some precincts.

INGRAHAM: But Bill, there's a lot at stake in this country. And I think we have to get away from this, well bashing or slamming. This is politics. And when there are substantive philosophical differences in the Republican Party, and people have been fighting these fights for 35 years, you better believe that people are going to be impassioned about it. And John McCain's impassioned about his.

O'REILLY: That's the difference between discussions on issues that you mostly — that I think you always do. I haven't known you to attack anybody personally, but he has been attacked by other right-wing commentators in a very vile, unnecessary way.

INGRAHAM: Well.

O'REILLY: That is the truth. And we're not going to gloss it over. And I'll tell you why we're not going to gloss it over.

INGRAHAM: Well, give me some examples.

O'REILLY: Because the far left does it all the time, and I rip their lungs out for doing it.

INGRAHAM: Right, but what examples?

O'REILLY: So I'm not going to gloss it over when the far right does it.

INGRAHAM: What are they saying? I mean, I'm not hearing that.

O'REILLY: They call him Juan in a derisive way.

INGRAHAM: Oh.

O'REILLY: I mean, they do all that kind of stuff.

INGRAHAM: But that's just stupid.

O'REILLY: They say that he got — because he was a captive, he lost perspective.

INGRAHAM: Yes, but that's — yes, but Bill.

O'REILLY: That has all been put out there, and it is wrong.

INGRAHAM: But no — but I don't think you should throw that out there and kind of paint with a broad brush the conservative movement.

O'REILLY: I'm not painting anything. I'm just saying it's unacceptable.

INGRAHAM: Well, I mean, there's a lot of…

O'REILLY: I'm going to get back to my question to you.

INGRAHAM: Yes.

O'REILLY: Are conservatives, like yourself, going to try to get a detente with McCain? Do you think that will happen?

INGRAHAM: Well, I think some might. I've met with about 30 conservative activists with Governor Romney after Governor Romney's remarks. And I think without a doubt, he was welcomed, actually, for the first time, I think, wholeheartedly into the conservative movement. And someone who was very high profile said today you leave the rates, but we welcome you into this movement. That was actually a pretty big moment.

O'REILLY: OK. Now you talked to McCain today, didn't you?

INGRAHAM: Just briefly. He was walking by with Lindsey Graham and some of his other members of his entourage, his supporters. And I joked with him that I was going to do the introduction of him, and he didn't know that. And he was kind of laughing. And I gave him a handshake, and he gave me a hug. And you know, we got to be respectful to each other, no doubt. But it's just a fact, Bill. I mean, there's a big divide in the Republican Party.

O'REILLY: Absolutely.

INGRAHAM: And that's OK.

O'REILLY: And there's nothing wrong with that, by that way.

INGRAHAM: That's OK.

O'REILLY: There's nothing wrong with conservatives saying he's not my guy, we don't like it, I'm not going to vote.

INGRAHAM: Right.

O'REILLY: I would never criticize anybody for doing that, if that's the way they feel sincerely. But the personal attacks, we're not going to book them.

INGRAHAM: Right.

O'REILLY: Now Romney , VP. Do you think that would be a good idea? Do you think it's possible?

INGRAHAM: I don't think it's likely. And we've all been surprised in this campaign, but I would be actually quite shocked if we heard a lot more from John McCain than we heard today. I think you might say, Bill, that this could be the last conservative speech, really conservative speech, on domestic issues, at least, that we hear from John McCain in a long, long time.

O'REILLY: Why do you say that?

INGRAHAM: Because this is what he had to do today. And I mean, he made it clear. I mean, he's a moderate. He has some conservative positions, obviously on the war. But on all these other issues, he's been much more eager, just a fact, to reach across the aisle to the left than he has been to the right. That's why all of his major bills are sponsored with liberals. So…

O'REILLY: But doesn't he need a strong, conservative traditionalist on the second?

INGRAHAM: I think, you know, some — I mean, I would hope that he would go that way.

O'REILLY: I think he has to.

INGRAHAM: But I think, Bill, he's going to make a different gambit perhaps. I mean, he could also say, look, I'm a proud, more centrist moderate Republican. And I'm more comfortable with people who think like me. And I'm going to go for those Democrats who are not going to like Hillary, and all of those Independents who really respect McCain's, you know, war record and what he's done for the War on Terror and respect his personal story. I think he could go that way. And I wouldn't be surprised at all if he did. I'd be very surprised if he picked Mitt Romney. I think he's much more likely to offer it to Huckabee. And we'll see how long Huckabee stays in.

O'REILLY: I think Romney may get it. I just have this feeling.

INGRAHAM: Really? Do you have inside information?

O'REILLY: No.

INGRAHAM: Because I'm always the last to know.

O'REILLY: I do not. I do not.

INGRAHAM: OK.

O'REILLY: But I picked the last five Super Bowls in a row.

INGRAHAM: Charlie Crist, I think, is more likely.

O'REILLY: Charlie Crist and certainly — but he's only been governor a short time. Doesn't have a high profile.

INGRAHAM: And conservatives wouldn't be thrilled with that, Bill, by the way.

O'REILLY: Right. Laura, thanks very much. We appreciate it.

INGRAHAM: Good to be here.

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