This is a partial transcript of "Special Report With Brit Hume," Dec. 16, 2004, that has been edited for clarity.

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BRIT HUME, HOST: Syria denies that it is interfering in the Iraqi elections, and even says now that it supports the elections. But in fact, Damascus appears to be an increasing threat to democracy in Iraq. What can the U.S. do? What should it do?

For answers, we turn to retired U.S. Marine Colonel and FOX News contributor Bill Cowan.

So, Bill, how bad is what Syria (search) is doing? How big a problem?

LT. COL. BILL COWAN, FOX NEWS MILITARY ANALYST: It’s not just the elections, Brit. Syria is involvement is becoming clear to U.S. intelligence, primarily military intelligence, that they’ve been playing an active role in supporting: former Baath regime members, insurgents, foreign fighters, others who are just prone to want to support anything anti-American across the board or with the insurgents.

HUME: How are they doing it?

COWAN: So Syria is there.

Tacit support by allowing these operations, these people, this money, this material to be inside Damascus, to be inside Syria and to be pushed over to support the insurgencies.

HUME: What about the border? I mean there are border patrols and border checkpoints and so on. Are they effective?

COWAN: Syria has offered to provide some support and help along the border, Brit. They’re no signs anywhere that they’ve really done such. But the reality is, people need to recall, Syria is a closed society. The intelligence services of Syria are in charge and in control of most everything going on.

And it’s inconceivable, the U.S. intelligence admits this, it’s inconceivable that all these things can be going on supporting the insurgency in Iraq without Syrian intelligence.

HUME: So what’s coming across, arms?

COWAN: Primarily, money is the biggest thing coming across. They don’t have a problem with arms in Iraq, as you know. They’ve got plenty of munitions left over from the old days. It’s money to support the insurgency. It’s some leadership. It’s some direction and operational guidance. It’s some people coming across.

HUME: When you say much leadership. We are given to believe that most of the leadership is really local, that it’s Iraqis that are Baathists (search) and other remnants of the regime constitute the leadership. Presumably they’re already in. Are they going back and forth? What’s happening?

COWAN: Indeed, U.S. intelligence now believes that al Douri, former Saddam No. 2, and many of the other key Baathists people in the Saddam regime; people we’re looking for are inside Syria right now directing many of the things going on in the Sunni Triangle with the insurgency.

Now, that’s not to say that everybody in the insurgency and everybody in the Sunni Triangle is affiliated with what’s going on. But the key leadership, the major entities within the insurgency are clearly being supported out of Damascus.

HUME: This suggests, Bill, that the government of Bashir Assad, the famous dictator Hafiz al Assad’s son, has made some kind of strategic choice here to support this insurgency. Is that the case? Or is he just so weak that intelligence services do whatever they want or what?

COWAN: Brit, great question because his father was a brutal, ruthless dictator that killed anybody. Perhaps even one of his own sons. And in contrast, Bashir is a quiet, meek, ophthalmologist who took over the reins when his father died. But the underlying intelligence, brutal structure of the Syrian regime stayed in place.

So by all accounts, Bashir, a nice guy, wants to do the right thing. But the reality is that a level under him, the old intelligence apparatus and structure is still not only driving what’s happening in Syria and Lebanon, but certainly complicit with what’s going in Iraq.

HUME: So what are these strategic options or even tactical options for the United States to try to curb this? I mean you keep hearing the warnings. The president issued one this week and so on. General Casey today was pretty frank about saying that this is going on. It appears there’s not much we can do. Or is there?

COWAN: No. I don’t think there is, Brit. I think last week we talked about his stronger diplomatic initiatives against him. The reality is we’ve had 15 or 20 years of diplomatic initiatives without much effect.

I think that because the intelligence picture is now being painted within the administration, showing what’s happening out of Damascus (search) that over a period of time, we’re going to see the White House, Pentagon, State Department really starting to take a look at the hard options that we can do.

Clearly, we can’t use significant military force. We’ve got enough to do in Iraq. But there probably are military considerations that we can look at.

HUME: Is it believed now that the assistance, support, direction that’s coming through Syria, with Damascus looking the other way or helping, is vital to this insurgency, that it would stop without it? Or that it just contributes?

COWAN: Contributes significantly, Brit. It wouldn’t stop without it. But it contributes significantly, primarily the money aspect. A lot of money Saddam had hidden in Damascus now being funneled back through front companies, underlying support to the insurgency. Cutting all that off out of Damascus would not stop the insurgency, but it would cripple it. It would indeed break its back.

HUME: You think. It could be decisive?

COWAN: It could be decisive. But I mean it wouldn’t be an immediate decisive thing, but it would play out over a little bit of time. But you know, it’s ironic. If you look back to Vietnam, and I don’t mean to lay out too many parallels. In Vietnam, the North Vietnamese and — the North Vietnamese and Viet Cong, excuse me, operated out of safe areas in Laos and Cambodia (search).

And we now see a safe area in Syria for many of the people involved in the insurgency. We have to find an effective way: diplomatic, military, economic, somehow to cut that off. Start starving the insurgency.

HUME: Bill Cowan, a pleasure to have you. Thank you very much.

COWAN: Thanks, Brit. Thank you.

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