This is a rush transcript from "Hannity & Colmes," March 17, 2008. This copy may not be in its final form and may be updated.

SEAN HANNITY, CO-HOST: We get right to our top story tonight. There is continuing fallout today over comments made by Barack Obama's pastor, the Reverend Jeremiah Wright, formally of the Trinity Church of Christ in Chicago. Senator Obama has now distanced himself from the Reverend's more controversial statements, and said that he did not personally witness the most outlandish of them, many of which have been played on broadcasts since last week.

Yesterday, normal services were held at Trinity. Our cameras were there to get reaction from members of the congregation on the on-going controversy:

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(SINGING)

REV. OTIS MOSS III, TRINITY UNITED CHURCH: We have watched as our senior pastor of 36 years of service has been reduced to a sound bite.

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REV. JEREMIAH WRIGHT, FORMER SR. PASTOR, TRINITY UNITED CHURCH OF CHRIST: We nuked far more than the thousands in New York and the Pentagon, and we never batted an eye.

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MOSS: No one talks about our HIV/AIDS ministry, one of the finest in the country, just the sound bite.

(BEGIN VIDEO CLIP)

WRIGHT: The government lied about inventing the HIV virus as a means of genocide against people of color. The government lies.

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MOSS: No one talks about our senior pastor, who is a former Marine with four earned degrees. We only get a sound bite.

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WRIGHT: No, no, no, not god bless America, god damn America!

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UNIDENTIFIED FEMALE: I think nothing was wrong with the comments myself. I think everything — I think the truth was told.

UNIDENTIFIED FEMALE: African-Americans really don't love themselves, so he tries to instill pride in us as African-Americans about loving yourself through the Bible.

UNIDENTIFIED FEMALE: What's wrong with us being who we are? We are black people.

UNIDENTIFIED MALE: Listen to the message. Forget about the messenger.

UNIDENTIFIED MALE: The man's got four degrees, speaks six different languages. So he's a well schooled individual. He knows what he's talking about.

UNIDENTIFIED FEMALE: He gives us a great spiritual lifting and that's what it's all about.

MOSS: We would ask that you would not engage in interviews. We would also ask that you would, again, thank all of the media that's been with us today. We certainly appreciate them— you all think I'm joking — I'm serious. I'm serious.

UNIDENTIFIED MALE: No comment.

UNIDENTIFIED MALE: No comment.

UNIDENTIFIED MALE: The reverend said for members not to speak to the media. Are you comfortable with that?

UNIDENTIFIED MALE: No comment.

UNIDENTIFIED MALE: You have no comment.

UNIDENTIFIED FEMALE: I have no comment. God bless you. No comment. God bless you.

No comment. God bless you.

(END VIDEO CLIP)

HANNITY: All right. Joining us now with the political fall out form this explosive story, FOX News contributor, the architect, Karl Rove. All right, Karl. Let me start with your general thoughts. What do you think?

Click here: Watch former Bush adviser Karl Rove discuss what Barack Obama should say in his race speech on Tuesday

Click here: Watch Part 2 of the interview with former Bush adviser Karl Rove

KARL ROVE, FORMER BUSH ADVISER: This is really damaging. It goes to the heart of Barack Obama's candidacy. He's made an argument that we're not red state, blue state, but a United States, and if elected president he would make a top priority bringing people together in a spirit of unity to achieve great things. And it really raises questions about his commitment to that unity if he spent 20 years, calls him his uncle, views him as his spiritual mentor, with a man that's been saying these incredible things.

And it's a big problem for him. It also a question of credibility for us now to suggest that he's only recently become aware of these controversial statements. It really strains credibility.

HANNITY: I want to stay on that point; is there anything he could say in this speech tomorrow, if you were advising him, that could get him out of this?

ROVE: Well, look, the only thing is to say look, I heard these things. I should have reacted differently. I'm sorry I didn't. I'm not certain — I'm really looking forward to his speech tomorrow because they're very smartly moving quickly to deal with this. Let's see how they deal with it, but they're not very many good options on this.

HANNITY: In the book "Dreams From My Father", he actually quoted the "audacity of hope" speech, which became his second book, Karl. In that speech, the phrase, "where white folks' greed runs a world need." How does he explain that away?

ROVE: Well, there are lots of things that Reverend Wright has said that are hard to explain, not only the condemnation of the United States of America, it's US of KKKA, the Jesus Christ was a poor black man oppressed by rich white men. I mean these are the kind of things that are just way over the top and hard for anybody to explain or hard for anybody to defend, and, frankly, the way that they've responded thus far, saying it's been taken out of context, and besides that, he hadn't heard of them; you know, both of these are weak responses.

HANNITY: Let me ask you one simple question because you are the architect. You are the great adviser. If you could get in his ear before this speech tomorrow, what would you tell them?

ROVE: Level with the American people. If he had heard these things before, if over the course of his 20-year association with this man, he'd become aware of these things, you cannot explain them away. You cannot explain going with Farrakhan to see Qaddafi in Libya and explain it away as, oh, I was somehow unaware of that. This man had a very high profile and a very open record of these kind of statements.

HANNITY: When we broke this story. I know everyone's taking credit for it now. Won't this put him in the category of being seen by the American people as just your average politician, spinning like a top, and that this is done to save and salvage his campaign, and it's being done for political expediency.

ROVE: That's why I said this issue is so harmful to him, because it goes to his credibility and it goes to one of the key issues that he's laid out in this campaign. Let's withhold judgment until he says what he says tomorrow. But thus far, it's been pretty damaging.

The smart thing he's done is he's moved quickly to deal with it. He also did something very smart on Friday. While all this bad news was out there, he picked up the phone and called The Chicago Tribune and The Chicago Sun-Times and said, those interviews you've been wanting to have with me about Rezko, as long as I'm going to have a day with lots of bad news, let's get the rest of it over. I'm going to give you those interviews and it's going to become aware that I had a deeper, longer, more significant relationship with Rezko than I've been heretofore willing to acknowledge.

And he did it on a day where there was so much bad news it largely got buried.

KIRSTEN POWERS, GUEST CO-HOST: Hi Karl. It's Kirsten Powers. Thanks for being with us. You said he needs to level with the American people, but so far he has said that he finds these comments to be horrible. He doesn't identify with them. He says he wasn't in the pews when they were said. What more do you think he needs to say?

ROVE: Well, first of all, let's take that last comment that you made. He has said — Notice he said something very precise. He said the comments that are at the heart of this controversy that he — that the Reverend Jeremiah Wright made were not made while I was sitting in the pews. That begs the question of were you aware of this man's attitudes and this man's views? And it really strains credibility to think that Senator Obama, after a 20-year association with this man, is only aware now that he's making these extreme bigoted statements, and these extremely — these extreme and vicious comments about our country.

It's hard to believe that only now is he becoming aware of them. Lots of other people have been aware for many, many years.

POWERS: He said he understands that people see this and they would find it outrageous and that that's all he knew about him, that he finds it outrageous. So, I do feel like he's saying that he wasn't aware of these specific comments that happened in the last five years.

ROVE: No, no, hang it on the specific comment. I'm thinking about the broader issue here is Reverend Wright was a leading proponent of black liberation theology. He had extreme views. I mean this is a man who went to Libya with to visit Muammar al-Qaddafi with Farrakhan. He gave an award to Farrakhan last year.

He's had a long association with these kind of left wing causes and views. Is it only now that Senator Obama is becoming aware of these extreme attitudes and these extreme comments? Now he very carefully parsed it down to, "I didn't hear these specific things. I was not in the pew and heard these specific things." But it begs the bigger question of did he — is he saying he was completely unaware of Reverend Wright's views and values and philosophy?

POWERS: We're going to have to take a break, and we'll be right back. More with Karl Rove right after the break.

(COMMERCIAL BREAK)

POWERS: We continue now with Karl Rove.

So, Karl, I want to get back to what we were talking about before, about Obama and his pastor. The thing is, we know a lot about Barack Obama, in terms of what he's written. This is someone who's written two books. He wrote his first book, where he talked very openly about his struggles, about being a black man, about doing drugs. And yet we've never heard him say anything remotely like what this pastor has said.

I feel like it's guilt by association. Do we really believe that Barack Obama believes these things?

ROVE: No, that's not the question. And you're right, we should not be assuming that Reverend Wright's beliefs are Senator Obama's beliefs, but what we have a right to ask about is would somebody who says that one of their principle goals as president would be to unite the country, what does it say about that person's willingness to do that, and their ability to do that if they are so tone deaf that for 20 years they sit in a pew being a parishioner in a church where a man has these views and values, and where he considers him an uncle and spiritual advisor.

It says something about his willingness — These are inflammatory and incredibly hurtful things to say, "god damn America?" I mean, please.

POWERS: To be fair. he said he didn't hear him say that.

ROVE: No, again, again, it gets back to this parsing of words. Is he aware of the overall philosophy? A lot of people in Chicago were aware of it.

POWERS: But that's different. The overall philosophy is very different than this specific statement, which he said he found outrageous. I think that — let me put this to you, is it possible that maybe we don't understand this because Barack Obama is, after all, black, and maybe this is something that you know, the fact that he's...

ROVE: No.

POWERS: You don't think there's a difference in the way that — what he might be comfortable with?

ROVE: When someone says the United States of KKK —

POWERS: Which he said he didn't hear.

ROVE: When someone says Jesus Christ was a poor black man oppressed by rich white men, that's offensive. That does speak to the universality of the Christian message.

Again, it's a question of, was he aware that over the course of the last 20 years, Reverend Wright routinely said these kind of things, and engaged in very unusual behavior, going to Libya again, for example. It's hard to ignore going to Libya to visit Muamar Gadhafi with Louis Farrakhan in tow.

HANNITY: Karl, that's another point. And the church gave a lifetime achievement award to Farrakhan here too. I spent some time this weekend going over the book "Dreams of My Father." On page 229, these are Barack Obama's words, "there were no cigar chomping crackers like Bull Connor out there." Those are his words. The church has deleted the black value system from the website. But going back to the same book, page 284, he called the black value system "a sensible heart-felt list."

This very weekend, Karl — I've got a whole document here from his church, and among the things it says here, "the shock white America is experiencing after hearing Reverend Wright's sermon falls on the shoulders of Uncle Tom preachers, organizations and leaders who have white folk thinking everything is all right, Massa, throw us a few crumbs, and we'll get them other Negroes under control. We have people intoxicated by their own arrogance." That was handed out at the church this weekend.

ROVE: By the church itself?

HANNITY: Well, it was given to everyone going into the church. Our producers were there.

ROVE: Again, to me this is incredibly hurtful language that does not bring Americans together, but pits Americans against each other. That's not what he claims is at the core of his campaign. Let's accept that he's accurate in his feelings, but what does it say about his behavior and his value and his views and his philosophy that he'd associate himself with this kind of thought for as long as he has?

HANNITY: Again, this was handed out, and our producers got it because they were on the scene this weekend. I'm not sure if it was associated with the church, but the people going into the church got ahold of this. Look, Karl, I'm looking at a Rasmussen poll that came out today. Most voters, 56 percent, think that Wright's comments made them less likely to vote for Barack Obama, including 44 percent of Democrats.

Now, my question to you is, and I would think on paper that this would probably prevent him from becoming president if he wins the nomination. Am I jumping the gun? Could too many things happen between now and then?

ROVE: Let's wait for the speech tomorrow. He has the ability to put this thing substantially, not completely, behind him. And it's a long time until the general election. But it's a big, big problem for Senator Obama tonight.

HANNITY: Karl Rove, the architect, thanks for being with us on "Hannity & Colmes".

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