This is a partial transcript from "Hannity & Colmes," October 25, 2006, that has been edited for clarity.

ALAN COLMES, CO-HOST: Recently, I sat down with the author of the new book, "The Audacity of Hope: Thoughts on Reclaiming the American Dream," Illinois Senator Barack Obama.


COLMES: "The Audacity of Hope". Does hope require audacity?

SEN. BARACK OBAMA (D), ILLINOIS: You know, I think it does. This was drawn from a sermon of my pastor, Jeremiah Wright, way back in, probably, 20 years ago.

And I was a community organizer then, and I was working in communities that had been devastated because steel plants closed, jobs had moved out, you know, the community was impoverished.

And he talked about how, both in our individual lives and in our lives as a country, that you know, sometimes it's hard to feel hopeful. It's easier to feel cynical and despairing. And so it requires a certain risk, a certain audaciousness, to say, "You know what? Despite all the hardships, we can actually make the world a little bit better."

COLMES: I love the story you tell at the beginning of the book. You had pretty much given up on moving forward in politics. You had lost a congressional race. It was very painful.

OBAMA: Right.

COLMES: You sit down with this media advisor. It's after September 11, the same month. He said, "Wait a minute. Osama, Obama, it's not going to happen."


COLMES: You decided you're just going to take care of your life, take care of your family.


COLMES: Something changed.

OBAMA: Well, you know, I think what was very good for me, and part of the book is about policy, but part of it is also about my response to being in politics.

You know, I think you can get so caught up in your own ambitions that you forget that there are a lot of ways to serve. And politics and being public office is just one way.

And it was liberating for me to have a loss, because I think what it said to me was, you know what? I can lose an election and this isn't so bad. And I can I still serve and I can still do useful things.

And one of the biggest problems, I think, in Washington is the fear of loss. People not wanting to take risks and get out there, and they try to cling to what they've got. And as a consequence, I think it distorts how they view politics.

COLMES: That's changed for you now. I mean, now you did that race, and you say it was very liberating and that you had that loss behind you. And you almost were not that tied to the result, were you?

OBAMA: Right. Well, you know, I think that, you know, listen, I always like to win. But sometimes you do learn things from losing. And I think that what I learned was to remind myself of why I had gotten into public service in the first place. And reconnect with those values. And that, now, I think makes me a better U.S. senator.

COLMES: People go into politics with the best of intentions. They want to do public service for the right reasons. They want progressive change. And then they get there.

Do you find out after you're there that you have to do compromises and do course trading that you never envisioned, in order — and still maintain your integrity at the same time?

OBAMA: Keep in mind, I was in the state legislature in Illinois for seven years, so I wasn't naive when I got to Washington. I think that there are always going to be compromises. The question is, are you compromising on issues or are you compromising on principles and values and ideals?

And what I try to make sure of at all times is I'm not compromising on the latter. You know, I'm happy to compromise on the former. That's part of democracy.

You're not always going to get exactly what you want, and we're in a big diverse democracy with a lot of vigorous debate. You know, I think your program is an example of, you know, people having a lot of differences.

So we're going to have to compromise in terms of moving forward and getting problems solved, and there's common ground there. But what you want to do is say OK, here's some core gut-check issues that are important to me that I'm not going to compromise.

COLMES: You talk about, in fact, you dedicate part of the book to your mother.


COLMES: The spirit of your mother and also talk about how she taught you to always put yourself in the other person's position.


COLMES: Which enables you as a politician to see the other point of view.

OBAMA: Right.

COLMES: On the other hand, sometimes you get criticized for not being — some would say — bold enough in coming out of the box and saying, "Here's where I stand and to hell with the other side."

OBAMA: Well, you know, I think the intention of this book was to focus on what are our common values and common ideals as measures? We talked earlier about being audacious in thinking about the future.

I think one of the characteristics about America is always being optimistic and being hopeful. And I think that's a good thing, and that's one of the things that binds us together. We have common values in terms of a belief in personal responsibility and self-reliance but also on community and taking care of each other.

So, the focus of this book wasn't a 10-point plan or a manifesto. What it was was really an attempt, a modest attempt on my part, to say here's some things that conservatives, liberals, blue state, red state, different ethnic groups and religious faiths, can get behind in promoting a stronger country.

COLMES: David Brooks, the New York Times, writes, "Barack" — he's a conservative — "Barack Obama should run for president." He makes the case it's time to move beyond the political style of the Baby Boomers, and you represent the kind of global thinking that's needed.

He says it may not be personally convenient for you, but times will never again be so completely require the gifts that you possess. A conservative columnist saying this is what you should do. When you read things like that, does it give you pause? And do you think, you know, maybe I ought to do this?

OBAMA: Well, look. It's flattering, as you know as well as anybody, Alan. Right now we have got three weeks before one of the bigger elections in my memory.

And so my complete focus is on these next three weeks and trying to get Democrats elected to Congress. And the Senate, partly because I'm in the minority right now, and one thing Republicans and Democrats will agree on is it's more fun being in the majority than the minority. So that's my focus.

A lot of this talk is flattering and — but at this point it's speculative. And if I decide that I'm going to make that kind of move, I promise I'll make that announcement, and you'll be invited.

COLMES: Thank you very much. But any chance of '08 for you?

OBAMA: Well, look at the, as I said, I think my focus right now is getting through this election. We have time to talk about that.

COLMES: You're not saying no?

OBAMA: What I'm focused on is this election.


Watch "Hannity & Colmes" weeknights at 9 p.m. ET!

Copy: Content and Programming Copyright 2006 Fox News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2006 Voxant, Inc. (www.voxant.com), 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, LLC'S and Voxant, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.