Updated

This is a partial transcript from The O'Reilly Factor, April 30 , 2002. Click here to order the complete transcript.

BILL O'REILLY, FACTOR HOST:   In the Unresolved Problems segment tonight, chaos continues to grip the Middle East.  Israeli troops killed nine Palestinians in Hebron today after four Israeli settlers were assassinated yesterday, including a baby girl.

With us now is the mayor of Jerusalem, Ehud Olmert.

You know, I've gone on record many times to say that I understand why Israel has launched its offensive, and I'd do the same thing.  I mean, you just can't have babies like the little baby killed yesterday blown up, you can't, and stand there and allow it.

That being said, I'm very troubled by a couple of things that the Israeli government is participating in, and the first one are the settlers, the settlers that have gone out, more than 200,000 of them, in places that are controlled, like Gaza, by the Palestinians.

Are these settlers doing anything good for the world?  I mean, why are they there?

EHUD OLMERT, MAYOR OF JERUSALEM:  You know, to start with, you are talking about the land of Israel.  You're talking about places which for 2,000 years Jews were praying for and crying for and yearning for.  And all our lives, this is the Bible land, this is where Jews started their life as a nation.

So the desire for Jews to return back to all those places is the most natural thing in the world.  You ask millions of American people, when they talk about Shiloh, when they talk about other places in Judea and Samaria, are they not the place where Jews were living all their history?

O'REILLY:  Well, that's right.  But...

OLMERT:  So...

O'REILLY:  ... you have to be realistic.  If you want peace, you have to make sacrifices.

OLMERT:  We are ready for sacrifices.

O'REILLY:  And I think the first sacrifice has to be pulling those settlers out of the Palestinian-dominated areas, to show the Palestinians that, listen, we are willing to make sacrifices to live side by side with you.  So we're going to pull our 200,000 people out of there.  We're going to relocate them.  And now we're going to look for some sacrifice by the Palestinians.  What's wrong with that?

OLMERT:  You're cutting things out of their context in terms of time and in terms of the political forces, that's all.  You should remember that only two years ago, for instance, to just take one point in the course of time -- we can take many, just one -- two years ago there was a political process, a summit meeting in Camp David, sponsored by your president, President Clinton, with Israel and the Palestinians sitting together and sorting out all these issues.

O'REILLY:  Right.

OLMERT:  Including the settlements issues.

O'REILLY:  And that dope Arafat walked away.

OLMERT:  Hang on.  Yes, Israel proposed a pulling out from 97 percent...

O'REILLY:  I know, I know.

OLMERT:  ... of the territories...

(CROSSTALK)

O'REILLY:  ... Arafat's an idiot, I understand he's an idiot.

OLMERT:  OK, so if Arafat is an idiot, what you suggest now that in order to appease an idiot and a murderer and a terrorist, we have to do what your president and our negotiators together decided that you couldn't do...

O'REILLY:  No, but times have changed now...

OLMERT:  ... (UNINTELLIGIBLE)...

(CROSSTALK)

O'REILLY:  ... if you did that...

OLMERT:  What's the change?  What's the change?

O'REILLY:  ... if you did -- the change is...

OLMERT:  The only change...

O'REILLY:  ... the Saudis and other people under pressure...

OLMERT:  No, the only change is that they started a bloody war...

O'REILLY:  That's true.

OLMERT:  ... and -- and -- but you, you (UNINTELLIGIBLE)...

O'REILLY:  But now the Saudis have come to the table and said, Look, we will recognize Israel, we will help you with the Palestinians, we will put pressure on that idiot Arafat, if you show us that you are willing to make this sacrifice.

OLMERT:  (UNINTELLIGIBLE)

O'REILLY:  I'd give it a chance.

OLMERT:  And if they will not, then you, Mr. O'Reilly...

O'REILLY:  Then go back in.

OLMERT:  ... then you, Mr. O'Reilly, will tell us now, You take 200,000 and move them in and move them out...

O'REILLY:  Right.

OLMERT:  ... is this serious?  Now, I'm telling you something.  I don't know what is the significance of the Saudi proposal.  I don't forget, and you can't forget, that 15 Saudis were amongst the 19 that were a part of the suicidal attack on the Twin Towers here in New York...

O'REILLY:  But Mr. Mayor, look, I understand that...

OLMERT:  I know, just a second.

O'REILLY:  ... it might be B.S.

OLMERT:  Why these Saudis want now to appear nicer and peace-loving, you can understand.

O'REILLY:  You can be suspicious of...

OLMERT:  You...

O'REILLY:  ... their motives all you want.  But the fact is that you, Israel, have the power to go in any time you want...

OLMERT:  (UNINTELLIGIBLE)...

O'REILLY:  ... and destroy -- yes...

OLMERT:  But you're talking about moving 200,000...

O'REILLY:  That's what I'm talking about.

OLMERT:  ... (UNINTELLIGIBLE) as a gesture...

O'REILLY:  As a gesture.

OLMERT:  ... in order to, in order to...

O'REILLY:  To take away any of their moral authority.  Take it away from them!

OLMERT:  (UNINTELLIGIBLE) is this moral authority in the first place.  I...

O'REILLY:  Because the world sees Palestinians...

OLMERT:  ... I (UNINTELLIGIBLE)...

O'REILLY:  ... as oppressed people.  That's why.

OLMERT:  I'll tell you what.  Now, I'll tell you what, Mr. O'Reilly.  Had someone come to you in America after the attack on the Twin Tower, and say to you, Listen, these guys are crazy, you must show them some good will.  Make some gesture in order to appease these guys that attacked you and killed 2,000 Americans.  You would have thrown him out...

O'REILLY:  It's a different situation.

OLMERT:  ... of the studio.

O'REILLY:  You're comparing apples to oranges.

OLMERT:  It's not a different situation.

O'REILLY:  Yes, it is.

OLMERT:  It's a different situation when they are 10,000 miles away from America.

O'REILLY:  No, I'll tell you what...

OLMERT:  But when they are 50 miles away from your home...

O'REILLY:  I'm going to give you the last word, but I'll tell you what, the Palestinians have a legitimate gripe in the sense that 200,000 Israelis have encroached on their territory.

OLMERT:  No.

O'REILLY:  The terrorists against us have no legitimate gripe.  That's the difference.

I'll give you the last word, Mr. Mayor.

OLMERT:  OK.  These territories were never declared, never agreed upon, by any international or -- body to be Palestinians.  They were negotiated, and they were negotiated by us and by them in the context of many peace conventions.  What you are suggesting now is that because they didn't accept the Israeli proposals, which were accepted by the United States...

O'REILLY:  I understand that.

OLMERT:  ... and by the international community, in order to appease them, you have to pull out from all the territories so to allow all the terrorists to continue...

O'REILLY:  I just want to give peace a chance...

OLMERT:  ... the bloody war on you.

O'REILLY:  ... Mr. Mayor, I think that's the best way to do it.

OLMERT:  Well, we gave peace more than a chance.

O'REILLY:  Pleasure to see you, thank you for coming in.

OLMERT:  Thank you.

Record, 10:00 p.m. tonight.  Thanks a lot.  See you guys.

Click here to order the complete transcript.

Copy: Content and Programming Copyright 2002 Fox News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2002 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), 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, Inc.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.