This is a partial transcript from "The O'Reilly Factor," June 28, 2004 that has been edited for clarity.

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In the "Unresolved Problems" segment tonight, Democrats and the war on terror.  As you may know, the USA handed over sovereignty to Iraq today.  Most of us hope the situation there gets better fast.  But we are in for a long haul fighting al Qaeda and other terrorists.  How did the Democrats see that fight?  With us now is Richard Holbrooke, former ambassador to the United Nations and current foreign policy advise or to John Kerry.  Ambassador Holbrooke could very well be secretary of state if Kerry is elected president.

All right, now, I'm a simple guy, very simple man.

RICHARD HOLBROOKE:  Yes, right, yes.

O'REILLY:  OK?  I'm a very simple.

HOLBROOKE:  You're a simple guy.

O'REILLY:  I am.  Today Jacques Chirac said no way should NATO help train Iraqi forces.  Now, to me, everybody...

HOLBROOKE:  No, but NATO today agreed that they would.

O'REILLY:  I know but Chirac doesn't like it, doesn't want it, will do everything he can to block it.

HOLBROOKE:  But the French approved it.

O'REILLY:  The French are what?

HOLBROOKE:  The French approved the statement today.

O'REILLY:  But here is the statement, this is what I have from the "Financial Times" just handed to me.  All right?  "Mr.  Chirac said NATO should have no role inside Iraq.  'I do not believe,'" this is quoting from Chirac, "'it is the purpose of NATO to be in or intervene in Iraq,' he told journalists in Istanbul." Now my point is this.

HOLBROOKE:  But that's not what you just said.  He said they should never be inside Iraq.  The NATO statement today talked about training.  So let's start with the facts.  Chirac doesn't want the French and NATO per se as NATO to go into Iraq.  I disagree with Chirac, but NATO is a consensus organization.  The...

O'REILLY:  That's not my question.

HOLBROOKE:  NATO also said they are going to train today.

O'REILLY:  Here's my question.  Every fair-minded man and woman of goodwill wants the Iraq situation to be stabilized.  Would you not agree with that?

HOLBROOKE:  Of course.  It's critically important for our national security...

O'REILLY:  Critically important to the world.

HOLBROOKE:  ... and to the U.S.

O'REILLY:  And to the United States.

HOLBROOKE:  Especially to us.

O'REILLY:  Jacques Chirac, I believe, is actively working against the stabilization by continually throwing roadblocks in the path of the United States.  And Colin Powell will tell you, I don't know whether he has or not, but he will, that Chirac stabbed him in the back, Villepin stabbed him in the back, and he was led to believe that the French would help us.

HOLBROOKE:  January 20 of last year at the U.N.

O'REILLY:  Right.  So if you...

HOLBROOKE:  It was an ambush.

O'REILLY:  ... have a so-called ally, and you know the inside baseball, that is actively working against the interests of the United States, how do you deal with that?

HOLBROOKE:  It's a hell of a problem.  And I disagree with Chirac's position, but I also think the American administration's diplomacy that led to this was extremely amateurish.  So let's not do a blame game here.  Let's talk about moving forward.

O'REILLY:  Can you...

HOLBROOKE:  Today was...

O'REILLY:  If you're secretary of state, can you convince Chirac to turn around and help us?  Can you?

HOLBROOKE:  Let me put it this way.  And I know Jacques Chirac quite well, and I worked with him in a similar crisis over Bosnia and Kosovo, and we brought Chirac around.  So let me just put it this way.  Bill Clinton would have done it and John Kerry, if he's elected president, will do much, much better with the French and with the Germans and with their allies than the current administration because he...

O'REILLY:  You believe it.

HOLBROOKE:  I don't believe it.  I am completely convinced of it.  Why, because John Kerry would come to the presidency a seasoned and experienced internationalist with long-standing experience on the Foreign Relations Committee and personal experience in Europe.  He knows how to build coalitions.  This administration has belatedly finally come out with the positions that Senator Kerry and other Democrats and Republicans like Lugar, Hagel and others have been calling for for a long time.

O'REILLY:  OK.  But I mean, I -- no one can say -- you're saying you can do it, we'll see.

HOLBROOKE:  You say I can do it.

O'REILLY:  Well, you're part of the team that can do it.  We'll see.  I believe that France is not a friend to the United States.  Maybe I'm wrong.  Maybe can you convince them.  I don't know.

HOLBROOKE:  They are a difficult friend, Bill.

O'REILLY:  All right.  They're a bunch of SOBs is what they are.  See, I'll never be secretary of state.  And do you have your "Boycott France" bumper sticker, by the way?  We'll get you one after the program.

HOLBROOKE:  Thank you, thank you.

O'REILLY:  You have a situation now where John Kerry is basically saying, I can do better in the diplomacy area.  He's basically trying to sell that.

HOLBROOKE:  There is no question about it.

O'REILLY:  All right, well, to you there isn't.  The voters are going to have to make up their mind.

HOLBROOKE:  Couldn't do worse.

O'REILLY:  You know, when I see a corrupt administration taking money for oil for food in France, in Germany, in Russia, I see all that corruption and then I see Saddam Hussein, as I pointed out in the "Talking Points Memo." Who is a mass murderer, I'm proud of my country for removing that man, and I don't want France's approval if they're taking bag money from him.

HOLBROOKE:  And you remember that I was on your program to say we should be getting rid of Saddam.

O'REILLY:  Right.

HOLBROOKE:  I supported the war.  I was the lead witness in favor of the war resolution.  But it was unimaginable to me that in a noble goal, getting rid of Saddam, the execution would be so bad and so inept and so schizophrenic that we would create an occupation which ended today which would be a disaster and undo the brave work of the military.

O'REILLY:  Absolutely.  Nobody foresaw it.

HOLBROOKE:  You and I agreed on that the last time.

O'REILLY:  We agree on it now, the Bush administration has made a lot of mistakes.

HOLBROOKE:  So now we're on to phase three which began today.  Let us hope that phase three goes better because as you said a minute ago, America's national security relies on it.

O'REILLY:  Is at stake, and I hope it does.

HOLBROOKE:  And all we -- all I can tell you is that the administration is jumping into the swimming pool without knowing if there is any water in the pool because they...

O'REILLY:  We'll see, we'll see, we'll see what happens.  And that's -- the election is going to hinge on this, by the way.  All right.  Al Qaeda.  We have got two minutes left.  And I want to bring you back because I wanted to discuss this with you.  Would you, Ambassador Holbrooke, do anything differently in combating al Qaeda than the Bush administration is doing now?

HOLBROOKE:  I would make the search in the hills and mountains, in the eastern part of Afghanistan, the Pakistan border the No. 1 priority.  That's where they are.

O'REILLY:  Would you violate Pakistani sovereignty and go into those areas without Musharraf's permission?

HOLBROOKE:  Musharraf will look the other way if it's done correctly.  And by the way, that's what they are doing now, but let's not make too big a point of it.  Now, I want to make a second point about al Qaeda.  In the Fallujah area, the United States has turned Fallujah over to Saddam's remnants.  Right now, as you well know, the Baathists are in control, it's a liberated zone.  Terrorists are flocking into Fallujah.

O'REILLY:  Correct.

HOLBROOKE:  I'm telling you now, for you and your viewers that Fallujah is a crisis in the making where you have al Qaeda, Zarqawi.

O'REILLY:  What's the solution to it?

HOLBROOKE:  The Fallujah problem has to be dealt with frontally, not the shameful giving it over to the Iraq...

O'REILLY:  The Marines go in and clear it out.

HOLBROOKE:  The Marines can't go in right now because they have...

O'REILLY:  What's your solution, Ambassador?

HOLBROOKE:  They have to deal with the new government that they set up today, Prime Minister Allawi.  They have to negotiate with the people that are going to support us.  They have to find a way to get Iraqis and good intelligence in there to locate the foreign elements.

O'REILLY:  I think they are trying to all do that now.

HOLBROOKE:  By the fall of this year, Bill, you're going to have people on your show saying, Fallujah, the new Afghanistan, a liberated zone 20 miles from Baghdad.  They have got a problem on their hands.  And you know it and I know it.

O'REILLY:  I know that but...

HOLBROOKE:  As a result of their own mistakes.

O'REILLY:  ... I think at this point that the tide has turned.  And I'm praying it has, but we'll see.  But listen, I want to continue this discussion, because you're the key to Kerry's -- either he wins or loses.

HOLBROOKE:  I think not me.  I think it's the American people.

O'REILLY:  Well, not you, but it's all going to be -- Americans are going to vote this election to who they think is going to protect them more.

HOLBROOKE:  Absolutely.

O'REILLY:  That's it.

HOLBROOKE:  No question.

O'REILLY:  There's no jobs, it's who is going to protect them, Bush or Kerry?

HOLBROOKE:  For sure.

O'REILLY:  And that's why we want to keep them...

HOLBROOKE:  As Tim Russert said the other day, it will be Iraq, Iraq, Iraq.


HOLBROOKE:  I'm sorry, I meant Bill O'Reilly.

O'REILLY:  Yes, I don't know that name.

HOLBROOKE:  I meant Bill O'Reilly.

O'REILLY:  Ambassador, you're welcome any time.  Thanks for coming in.

HOLBROOKE:  Thank you.

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