This is a rush transcript from "Special Report," February 7, 2011. This copy may not be in its final form and may be updated.


DAVID CAMERON, BRITISH PRIME MINISTER: Under the doctrine of state multiculturalism we have encouraged different cultures to live separate lives, apart from each other, and apart from the mainstream. We fail to provide a vision of society to which they feel they want to belong. We have even tolerated these segregated communities behaving in ways that run completely counter to our values.

NILE GARDINER, FOREIGN AFFAIRS ANALYST: David Cameron's speech firmly rejected not only the radical Islamists but also those who apologize for them.


BRET BAIER, ANCHOR: Multiculturalism under attack again, this time by the British prime minister. This follows the German chancellor Angela Merkel a few months ago saying this, "At the beginning of the 60s our country called the foreign workers to come to Germany, and now they live in our country. We kidded ourselves a while, we said: 'they won't stay, sometime they will be gone.' But this isn't reality. And of course the approach [to building] multicultural [society] and to live side by side and to enjoy each other has failed, utterly failed."

We're back with the panel. What about this, Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: This I think is a very important moment in the history of the west. There is a cancer growing inside the west. Some of the leaders have acknowledged it, Angela Merkel of Germany, but mostly it's been the view of opposition and the opposition as in Holland have been called racist.

When you hear the prime minister of Britain in a coalition government with the liberals, expressing this, I think it's a sign of an important cultural shift. It's now OK to actually speak the truth. And they are indicating because of overt government policy subsidizing these separations allowing these kind of incendiary anti-western, anti-British, even pro-terrorist speeches and sermons, et cetera, to be issued in these places, I think this is a moment in which it will allow public opinion to express itself and the laws, especially the subsidizing of this separation should change.

BAIER: A.B., you likely wouldn't hear this from the Obama administration.

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: No. I think this is a fascinating concept but I don't really know -- it's not that he is not right. I don't know where he is going to go with this. He is looking to create a shared national identity. He wants to educate his people in the elements of a common culture and force, you know, the English language speaking.

He said the ideology of extremism is a problem, but Islam emphatically is not, and that picking a fight with the latter will do nothing to help us confront the former. So withholding public funds from groups associated with extremists makes sense. Working with peaceful moderate Muslims makes sense. Beyond that I don't know what you do without discriminating against and ultimately isolating those peaceful, moderate Muslims.

BAIER: Fred?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Well look what he says is that -- I agree with Charles, this is a landmark important speech Particularly coming from David Cameron. I had no idea, and I talked to some people today, I was incredibly surprised that David Cameron, who he is a kind of a mushy moderate of a prime minister, who would give this really tough speech in a country where you have deeply engrained political correctness that this violates completely.

To give the speech -- he did say, A.B., some things he is going to do. 16-year-olds in England will have to take courses in the culture and history of the country. Anybody who's going to live in England, they can't live in an isolated, segregated part of a city or a part of England where say Sharia law is imposed and not British law. That if they're going to be there and they want to be citizens, then they're gonna have to be British. They can't be something else. They have to be British.

I mean this was an extremely bold speech and particularly coming after a speech three weeks ago by the chairman or chairwoman of the conservative party who said -- this is Baroness Warsi -- who said that England is rife with Islamo-phobia. And in this speech -- in his speech Cameron totally rejected that view.

KRAUTHAMMER: You don't hear a speech like that here, a, because we do not have the level of isolation and alienation among the Muslim population here as you have in Europe. It's far more integrated and assimilated.

But secondly, because we have a president who doesn't even speak about radical Islam abroad in real terms. He will never use that term or if he does he shies away and he implies it's violent extremism of origins that are entirely unknown. He has to be a lot more honest about that.

BAIER: We will talk about this again. That's it for this panel, but stay tuned to find out who may be next in line to join the Obama administration.

Content and Programming Copyright 2011 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2011 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.