This is a rush transcript from "The O'Reilly Factor," July 28, 2008. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: The top story tonight: accusations that Barack Obama canceled a visit to wounded American troops in Germany for venal reasons. That's what the McCain campaign is putting out there.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Barack Obama never held a single Senate hearing on Afghanistan. He hadn't been to Iraq in years. He voted against funding our troops. And now he made time to go to the gym but canceled a visit with wounded troops. Seems the Pentagon wouldn't allow him to bring cameras.

John McCain is always there for our troops. McCain: Country first.

JOHN MCCAIN, REPUBLICAN PRESIDENTIAL CANDIDATE: I'm John McCain, and I approve this message.

(END VIDEO CLIP)

O'REILLY: But Senator Obama denies all of that and explained the situation to FOX News anchor Bill Hemmer.

(BEGIN VIDEO CLIP)

BARACK OBAMA, DEMOCRATIC PRESIDENTIAL CANDIDATE: It was scheduled. We intended to go. We had planned to go. And we got wind that there was some concern that this might be perceived as political, because we were using campaign resources.

BILL HEMMER, FOX NEWS ANCHOR: To be clear, the Pentagon says the rules are no cameras and no campaigning. But...

OBAMA: That...

HEMMER: Did you need a camera to visit the wounded?

OBAMA: No, no. That part of it's easy. I mean, we had never intended to take cameras in. I was in Walter Reed three weeks ago, and nobody knew about it. So our intention was not to publicize this at all. There was a hint that it might end up being perceived as a political issue because of some blowback that we received.

HEMMER: You don't think it was a mistake to bypass Landstuhl?

OBAMA: No.

(END VIDEO CLIP)

O'REILLY: Joining us now from Washington to react, FOX News analyst Karl Rove.

So Senator Obama is saying, look, he didn't want to be perceived as using wounded troops to further his campaign, which sounds noble to me. Are you buying that?

KARL ROVE, FOX NEWS ANALYST: Well, look, it is noble, but remember, it was on his schedule originally. He planned to go. He had to know that this was on his campaign swing. He left the official congressional delegation in Afghanistan and Iraq. He was now campaigning through Europe. He'd come from the big rally in Germany that he gave his campaign speech to. So he knew he was going to be on a political trip.

I frankly think his conversation with Bill Hemmer though was a little bit disingenuous. If you go back a little bit, go back to what he said in London on the 26th immediately after all this hubbub, he said, "I was going to be accompanied by one of my advisers, a former military officer. And we got notice that he would be treated as a campaign person, and it would, therefore, be perceived as political, because he'd endorsed my candidacy but he wasn't on the Senate staff. That triggered concern that maybe our visit was going to be perceived as political."

Well, if your campaign adviser is supposed to go with you and that makes it into a political event, there's an easy answer: dump the campaign adviser and go ahead and go.

O'REILLY: OK. I don't know. I can't read anybody's mind, but to say that Barack Obama went to the gym instead of visiting the troops, that's pretty tough, isn't it?

ROVE: Well, no. That part is accurate. There are five statements in here, four of which are accurate.

O'REILLY: It may be accurate. He may have gone to the gym somewhere around the visit, but you know, all I'm trying to say is this: I don't know what happened. Maybe Barack Obama is as venal as the McCain campaign is trying to portray him.

ROVE: Well, look. Five statements here. One of which, you know, is subject to argument, which is why did he not go? This says, you know, the ad says he didn't go because they wouldn't let him take a camera. He himself in front of No. 10 Downing on the 26th says the reason he didn't go was because they told him that his campaign adviser couldn't go with him, that only Senate staff could accompany him, and that that's why he decided not to go.

If I were him, I would have said, "Fine, I will go without my campaign adviser," and done it in a — look, this would have been a private event.

O'REILLY: Why do you — let's cut through all this. Why do you think Barack Obama didn't go?

ROVE: Because I think he thought "This was going to be too much of a headache for me. I'm tired. I'm at the end of an 8- or 9-day foreign trip.

O'REILLY: And I just don't want to deal with the blowback.

ROVE: I just don't want to deal with it. I just don't — and look, there would not have been any blowback. That's the thing. People — the absence of his campaign adviser — can you imagine John McCain trying to say how dare he go see these wounded veterans while he's on a campaign swing through Europe?

O'REILLY: No, but I can imagine people...

ROVE: That would have been nutty.

O'REILLY: I can imagine people — and certainly you can, as well — saying that he's using people who have their legs and arms blown off to try to get votes back home. I can imagine people saying that, because they said it about me, you know. They said I — look, when I went to visit the troops in Iraq in 2006, it was said that I did it for ratings. I mean, you know the animosity.

ROVE: Bill — Bill, do you know how — do you think people really believe that about you?

O'REILLY: No, I don't. I don't.

ROVE: They wouldn't have believed it about Senator Obama.

O'REILLY: I don't know about that. Look, in a political campaign. I should say — let me say — amend my statement to your excellent question, by the way. That was an excellent question.

The far-left kooks did believe it. The people who hate me did believe it. You know, so Obama, look, I don't know, again, what's in his mind, but they probably — you're probably right. The end of the trip, they said, look, is it worth going there and having to deal with all these accusations that's going to dilute our message? And they made a mistake, because what they did was they handed the McCain campaign an ad, which is a pretty tough ad.

ROVE: Right. Yes, and, look, in these things, every — you know, there are lots of statements. I've counted, like, six different explanations for the Obama campaign. That's why, in these kind of instances, it's always good to go back to the first thing that the candidate himself or herself says closest to the incident. That's why I went back to what he said on July 26 in front of No. 10 Downing in London. And that's just not a good explanation to say, you know, "I can't ditch my campaign adviser and to — when I go visit the troops."

And, look, I understand. He's a human being, and that is an exhausting schedule for him to be on. He just had this gigantic speech, 200,000 people. That drained his energy, I'm sure. But it's not a good explanation to say...

O'REILLY: OK. And I think you provided a point of view that was necessary for the folks to decide about this issue.

Hey, did you send me talking points when you were at the White House that I never got? I mean — did you...

ROVE: You know, anybody dumb enough to try and do that with you, Bill, would not last at the White House very long.

O'REILLY: Can you imagine this? I mean, and then we have Howard Kurtz at the Washington Post who, by the way, you know, I'm not mad at Kurtz. He needs to fill his television program. But he knows me, too. The first time I ever talked to you, I think, was at the tail end — no, it was at a White House Christmas party, and you told me to stop eating so much, I believe. You came over and said...

ROVE: I noticed you were sitting in front of the buffet, and other people wanted to get to it.

O'REILLY: That's right. And you came in and said, "Come on."

But seriously, it's so ridiculous. Yet, this comes out of their mouths and is taken seriously, which goes back to the Obama thing.

ROVE: Yes. Do you think…

O'REILLY: Whatever you do you're going to get — you know, they're making it up. They're making it up.

ROVE: Yes, well, would you ever think that Howie Kurtz would say that the Clinton White House was feeding talking points to, say, The New York Times or The Washington Post?

O'REILLY: I think he would if he had to fill his dopey TV show over at CNN.

Look, does Kurtz believe that I got White House talking points? No. Does he want to throw a provocative thing out there at CNN? Yes. Do the kooks at NBC News believe it? No, they don't believe it. But they don't care, Mr. Rove. All they want to do is throw the mud out there.

So that's why I think Obama didn't show up, because he said, "Look, do we need another distraction to dilute my message?" And the answer is no. But again, as we both discussed, he made the mistake because it became a bigger distraction.

ROVE: Well, and look, again, I go back to the original. Look, they put this on the schedule. They were going to do this. You cannot tell me that these...

O'REILLY: Right. They should have done it. They had it on the schedule. They should have done it.

ROVE: ...smart people in the Obama campaign hadn't thought it through in advance already. Again, I go back to July 26. He was exhausted. They said, "You can't take your campaign adviser." He uses that as an excuse.

O'REILLY: He should have done it anyway.

ROVE: And go to the gym and work out.

O'REILLY: Well, I don't know about the gym thing. But he should have gone, because this is causing him way more trouble than it's worth.

ROVE: Sure is.

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