This is a rush transcript from "Special Report," January 7, 2020. This copy may not be in its final form and may be updated.

GREG GUTFELD, FOX NEWS CHANNEL HOST: I bid 1,500 tops for that. Very, very, very cute little manatee. All right, speaking of man a tee, set your DVRs. "SPECIAL REPORT" up next.  Bret, he's the man.

BRET BAIER, FOX NEWS ANCHOR: A tee. Thanks, Greg. Good evening and welcome to Washington. I'm Bret Baier. "BREAKING TONIGHT", President Trump says that Iran started the current turmoil. He's not putting up with the death of Americans. The President is insisting last week's airstrike against Iran's top military leader was U.S. retaliation for a deadly attack and that it saved lives. He also says, the U.S. is ready for retribution from Iran and will respond if it happens. The Islamic Republic, meantime, saying it is working on plans that would be, "a historic nightmare" for the U.S. Meanwhile, a hometown funeral for General Qassem Soleimani, turned deadly today with a stampede, killing dozens of people. We have "FOX TEAM COVERAGE" tonight. Trey Yingst, in Baghdad with the latest on that funeral tragedy and the Iranian threats against the U.S.  But we begin with chief White House correspondent John Roberts. In the president's insistence, he did the Middle East in the world a favor. Good evening, John.

JOHN ROBERTS, FOX NEWS CHIEF WHITE HOUSE CORRESPONDENT: Bret, good evening to you. It was the president's first on-camera remarks since the Friday airstrike that killed Soleimani. The President in the Oval Office today saying that, that action saved a lot of American lives with Soleimani's demise.

(BEGIN VIDEOTAPE)

ROBERTS: In the Oval Office with the Greek Prime Minister today, President Trump would not go into detail about the intelligence leading up to the targeting of Qassem Soleimani, but warned Soleimani presented a clear and present danger to the United States.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He's been called a monster, and he was a monster. And he is no longer a monster, he's dead. And that's a good thing for a lot of countries. And he was planning a very big attack and a very bad attack.

ROBERTS: Secretary of Defense Mark Esper today said what Soleimani was planning was imminent.

UNIDENTIFIED MALE: Can you clarify, the attack Soleimani was planning, was that days or weeks away?

MARK ESPER, UNITED STATES SECRETARY OF DEFENSE: I think it's more fair to say days, for sure.

ROBERTS: Iranian officials declared Soleimani's killing an act of terrorism and an act of war, and again, vowed retaliation. Adding that their response would be proportional. President Trump said any Iranian attack would be met with a swift response.

TRUMP: We're prepared, we're totally prepared. And likewise, we're prepared to attack if we have to as retribution.

ROBERTS: After igniting controversy over his threat to target sites of cultural significance to Iran, which could constitute a war crime.  President Trump, today joined his secretaries of state and defense, saying any strike against Iran would comply with international law.

TRUMP: They're allowed to kill our people. They're allowed to maim our people. They're allowed to blow up everything that we have, and there's nothing that stops them. And we are, according to a various laws supposed to be very careful with their cultural heritage. And you know what if that's what the laws, I like to obey the law.

ROBERTS: Democrats continue to criticize the operation to take out Soleimani. Accusing the president of an erratic foreign policy that may have grave consequences.

SEN. CHUCK SCHUMER (D-NY): So, this president, when it comes to these kinds of things, doesn't have a strategy. And I am worried that he will either, by impulse action, or just noting the lack of strategy bumble us into war.

ROBERTS: Both Iraq's prime minister and the Iranian foreign minister, Javad Zarif, insisted Soleimani had no nefarious intent. That he was in Iraq as part of an effort to broker a new relationship between Iran and Saudi Arabia. A claim the secretary of state today found laughable.

MIKE POMPEO, UNITED STATES SECRETARY OF STATE: So, let's see. So, Zafi's statement. His first statement that is Soleimani was traveling to Baghdad on a diplomatic mission. Anybody here believes that? Is there any history that would indicate that it was remotely possible that this kind gentleman, this diplomat of great order, Qassem Soleimani, had traveled to Baghdad for the idea of conducting a peace mission? I made you reporters laugh this morning. That's fantastic.

(END VIDEOTAPE)

ROBERTS: Well, President Trump said today that the United States is fully prepared to respond to any military action taken by Iran. The Secretary of Defense Mark Esper was even more direct, saying today that the United States is not looking to start a war with Iran, but it is fully prepared to finish one. Bret.

BAIER: John Roberts live in the North Lawn. John, thank you. A new threats tonight from Iran about retribution for Soleimani's death. They come as a funeral for the general goes terribly wrong in his hometown.  Correspondent Trey Yingst has the latest tonight from Baghdad.

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TREY YINGST, FOX NEWS CHANNEL FOREIGN CORRESPONDENT: Hundreds of people run for safety as a stampede erupts at the funeral of a running-in general, Qassem Soleimani. More than 50 people were killed and nearly 200 injured in the chaos. The event marking the third and final day of mourning for the Iranian military leader killed in a U.S. drone strike last week. The region now waits to see if conflict will follow as the Iranians are vowing revenge against U.S. forces in the Middle East. Iraqis are increasingly concerned about getting caught in the middle of a larger conflicts between the U.S. and Iran. The Iraqi Parliament voting Sunday to order all U.S. troops out of the country. But according to the U.S., the Iraqi members who attended the vote were predominantly pro-Iranian Shias. And most Sunni and Kurdish lawmakers boycotted the vote. U.S. Defense Secretary Mark Esper said they "voted at the threat of their own lives by Shia militia groups. In neighboring Iran, the foreign minister had a different message for the United States.

MOHAMMAD JAVAD ZARIF, FOREIGN AFFAIRS MINISTER, IRAN (through translator):  The United States is bounded to receive a definitive and certain response for its outrageous act at the time, and in a place where it would feel the utmost spin.

YINGST: From Iran's foreign minister to the country's supreme leader, the messaging has been clear, Iran will respond. The questions are when and where. Over the past year, Iranian proxies in neighboring Iraq have conducted more than a dozen attacks against U.S. interests. The targeting of Iraqi military basis that house U.S. forces became commonplace. It was the organized storming of the U.S. Embassy though, coupled with an American contractor being killed that sparked the new red line for the Trump administration. With a strong ballistic missile program and threats to hit 35 U.S. linked targets including Israel. The types of attacks Iran orders make a change.

MAJ. GEN. HOSSEIN SALAMI, COMMANDER-IN-CHIEF, ISLAMIC REVOLUTIONARY GUARD CORPS (through translator): We repeat once again, our willpower is firm.  We tell our enemies that we will retaliate, but if they take another action, we will set ablaze the places that they like and are passionate about.

(END VIDEOTAPE)

YINGST: As we speak, The Washington Post and the Voice of America are reporting an ongoing rocket attack against an Iraqi military base in western Iraq that houses U.S. troops. We are working at this hour to confirm those reports. Bret.

BAIER: Trey Yingst, live in Baghdad. Trey, thank you. We should point out some sites that are being tracked in the Middle East used by Hezbollah affiliate -- affiliated groups. I have messages now going on about rockets being fired at bases and "revenge has begun". We'll continue to monitor that at this hour. Let's bring in our panel early. Washington Post columnist Marc Thiessen. Susan Page, Washington bureau chief at USA Today. Guy Benson, political editor at Townhall.com and host of the "GUY BENSON SHOW" on Fox News Radio. Mark, obviously we know Iran's going to push back, punch back at some point. The question is how this may be starting. Your thoughts on where we are.

MARC THIESSEN, FOX NEWS CONTRIBUTOR: Well, you know, the Iranian foreign minister today accused the United States of committing an act of aggression and we are accused of a state-sponsored terrorism. This is -- I mean, that takes to use a good choice word, chutzpah. You know this is a -- this premier state sponsor of terror in the world.  Soleimani was the terror mastermind and Trump showed enormous restraint. They are the ones who committed acts of aggression. First, they hit Japanese and Norwegian tankers. We didn't respond. Then, they attacked on the U.S. drone. We didn't respond. Then they attacked Saudi oil facilities. We didn't respond except in the cyber domain. Every time the president showed enormous restraint, he drew a red line. He said if you kill an American citizen, you will pay a price. They killed an American citizen, they paid the price. And if they -- and he's warned them again, if you -- if you retaliate for this, you're going to pay an even greater price and they better take it seriously.

BAIER: Late this afternoon, (INAUDIBLE) the Gang of Eight up on Capitol Hill, getting a briefing from top administration officials. Some of them had been talking about the briefing or lack of briefing prior to this attack. Take a listen.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), SENATE MAJORITY LEADER: I've been in a gang of eight during the Obama years. When Osama bin Laden was taken out, I was not told in advance.

SCHUMER: This president's foreign policy. I described it in two words.  Erratic and just wrong.

REP. KEVIN MCCARTHY (R-CA): I happen to been with the president down in Mar-a-Lago the night that this took place. The world is safer today because this president took action.

REP. ADAM SCHIFF (D-CA): I think that what it shows is a national security process that is either non-existent or dysfunctional. President making decisions by the seat of his pants, and the result is that war with Iran is more likely.

(END VIDEO CLIP)

BAIER: So, bottom line, there's a lot of skepticism up on Capitol Hill.  We don't know what they are being told or what the fallout will be, but that's true.

SUSAN PAGE, WASHINGTON BUREAU CHIEF, USA TODAY: But we did see the administration move on several fronts today to try to address these questions about whether there was, in fact, an imminent threat or whether this was just the kind of ongoing threat that Soleimani had -- has long posed to U.S. forces. You know, we had the Secretary of State, the Secretary of Defense, the National Security advisor out -- all out today talking without many details, making the case that this was a justifiable decision made by the president. I think we'll know more after the Gang of Eight come out today after today's briefing, after additional briefings on the Hill tomorrow. But it's important and it reflects to some degree the experience that Washington had in the run-up to the Iraq War, where the assertions by that administration, of intelligence findings, that there were the threat of weapons of mass destruction turned out not to be true. And I think a lot of policymakers now feel like there's -- that more skepticism is warranted. When we head into a situation that holds the possibility of real military conflict ahead.

BAIER: That is fair. I mean, there have been several people, Tucker Carlson among them on this channel, saying Republicans went from questioning deep state to buying everything that was being said about the - - from the intelligence community about this.

GUY BENSON, FOX NEWS CONTRIBUTOR: Yes. And I think a lot of Democrats who spent the last two years saying the intelligence community is sacrosanct should never be criticized because that would be un-American are now saying, well, hang on just a second. Maybe they got this wrong like they did in Iraq. So, they've switched sides here, which is always a fun switcheroo in this town. I think I'm curious to know what the intelligence is. I think it'd be beneficial for the public to, at least, know more about that. But I think we can simply look to Iran's actions in the last week or so. It is inconceivable and unfathomable that Soleimani was not plotting more American deaths because that's what he always does and has done for years.  And as Marc mentioned, there was a red line drawn. I think Iran felt like they could get away with almost anything with impunity. They got used to that for eight years. And frankly, for most of this administration, and then President Trump in an erratic way of Chuck Schumer wants to use that word, surprise them with a very unpleasant surprise that certainly got their attention and will hopefully have a deterrent effect.

BAIER: A question now is about the Iraqis and what they do. Take a listen to the Iraqi prime minister and the defense secretary.

(BEGIN VIDEO CLIP)

ADEL ABDUL-MAHDI, PRIME MINISTER OF IRAQ: Yesterday, we received a letter from the U.S. commander about the withdrawal of troops. But then, within four to five hours, we were told that the letter was wrong. The letter clearly indicates the withdrawal from Iraq was directly sent to the Iraqi foreign minister, interacts ambassador in Washington, D.C. and other parties.

ESPER: Our policy has not changed. We are not leaving Iraq. And a draft unsigned letter does not constitute a policy change. And there is no signed letter to the best of my knowledge.

(END VIDEO CLIP)

BAIER: That was messy, yesterday about this letter that got out there.  But there's been misreporting about the Iraqi Parliament and what actually happened at non-binding vote by Shia lawmakers mostly.

THIESSEN: Yes, yes.

BAIER: And, you know, the Kurds and the Sunnis were not a part of it.

THIESSEN: Yes, no, I mean, Congress -- here in Washington, D.C., Congress passes resolutions, a sense of Congress resolutions all the time that have no power and know everybody ignores them. But this Iraqi Parliament does it all of a sudden, it's the end of the world. I mean, look, the reality is, is that, as I pointed out, I think our deterrence posture had weakened because Trump had been so reticent and carrying out a military attack. And so, as David, David Petraeus, said with this strike, Trump restore deterrence. But now he has to maintain deterrence. And talking about withdrawal is very, very damaging to that because the Iranians see that -- their goal is for us to leave Iraq, and they think Trump's goal is to leave Iraq too, and so, they are going to be emboldened if they think that that they had -- that they can push them out.

BAIER: Very quickly, Susan, politically, for Democrats, obviously they're saying that this opens up a hornet's nest. But there are some who are being painted, at least, by the other side as mourning the death of Soleimani. And that's a political danger as well.

PAGE: Yes. I mean, I actually think there are very few Americans of any stripe who do not believe that this was an evil man who posed a threat to Americans. The question that I think lead to Democrats are raising is was this a proportionate response that leads to consequences that make sense for the United States security?

BAIER: All right, panel we'll see you a bit later in the show. Up next, Joe Biden lays out his argument against President Trump's Iran policy, calling him dangerously incompetent.

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BAIER: At least one person killed, eight others injured when a magnitude 6.4 earthquake struck Puerto Rico before dawn today. The quake was followed by a series of strong aftershocks. It's part of a 10-day series of quakes spawned by the grinding of tectonic plates along three faults beneath Southern Puerto Rico. Seismologists say it's impossible to predict when the quakes will stop or whether they will get stronger. The Justice Department says President Trump's former National Security Adviser Michael Flynn deserves up to six months in prison. That is a reversal of its previous position. Flynn pleaded guilty in 2017 to lying to the FBI about his conversations with then-Russian ambassador -- the then-Russian ambassador to the U.S. Flynn was one of a half dozen Trump associates charged in the Mueller investigation. All six of either pleaded guilty or been found guilty in a jury trial. Joe Biden, says President Trump is dangerously incompetent. And his strike against Iran's top military official puts the U.S. on the brink of war.  The Iran situation shining a light tonight on foreign policy in the run-up to the start of the primary season voting less than four weeks from right now. Correspondent Peter Doocy has the latest on the campaign trail from Waterloo, Iowa.

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PETER DOOCY, FOX NEWS GENERAL ASSIGNMENT REPORTER: Joe Biden believes that diplomatic relations with Iran only started deteriorating because of something President Trump did, pull out of the Iran nuclear deal.

JOE BIDEN (D), PRESIDENTIAL CANDIDATE: Trump, he walked away. Not Iran, Trump walked away. Trump made United States the international outlier.

DOOCY: Now, Bernie Sanders is arguing a different part of Biden's foreign policy record could be fatal in a general election.

SEN. BERNIE SANDERS (I-VT), PRESIDENTIAL CANDIDATE: You're going to have to get working people excited, you're going to have to get young people excited. Joe Biden voted and help lead the effort for the war in Iraq, the most dangerous foreign policy blunder in the modern history of this country.

DOOCY: One week from tonight, Democrats will debate in Iowa. And as of right now, the stage is set to shrink again. The five qualifiers, so far, are Biden, Sanders, Buttigieg, Klobuchar, and Warren, whose fundraising dipped about $3 million between the third and fourth quarters.

SEN. ELIZABETH WARREN (D-MA): So, I actually don't know why the numbers are a little bit off.

DOOCY: For most of this cycle, healthcare has been at the heart of Democratic disagreements. And for the first time Joe Biden is claiming he was shot down to the critical messaging moment a decade ago, telling donors today, "When we pass Obamacare, I suggested to the president that he have - - and it's one of the times I got in trouble, I said a fireside chat. I suggested, he go on air and explain to the people exactly what we just did and take some time to take a victory lap. And his comment was 'Joe, we have too many other things facing us.'" And now, with tensions with Iran rise, Biden still wants more public info from the president, it's just a different president.

BIDEN: Mr. President, you have to explain your decision and your strategy to the American people. That's your job as president, Mr. President.  Democracy runs on accountability.

(END VIDEOTAPE)

DOOCY: Just two candidates will appear in front of the largest television audience available between now and Election Day next November. Donald Trump and Michael Bloomberg paid $10 million each for 60 seconds alongside potato chip and car and beer ads during breaks at the Super Bowl. Bret.

BAIER: Peter Doocy, live in Waterloo. Peter, thank you. "BREAKING TONIGHT", we brought you the top of the newscast but now from national security correspondent Jennifer Griffin. A senior U.S. military source on the ground in Iraq, saying, "Under missile attack from Iran, these are either cruise missiles or short-range ballistic missiles all over the country." Again, ongoing missile attacks on U.S. facilities inside Iraq, a senior military official on the ground saying this looks like something serious as far as the expanse of these rocket attacks happening at this hour. We're trying to get more information on the ground in Iraq. When we get it, we'll head back there. We'll bring you more information right here on Fox. The first phase perhaps of Iran's pushback after the drone attack that killed Iranian General Qassem Soleimani. More to come. Up next, a live update on the deadly Australian wildfires. First "BEYOND OUR BORDERS" tonight. Russian President Vladimir Putin, visited Syria today and met with Present Bashar al-Assad. It's Putin's second visit to Syria where his troops have been fighting alongside Syrian forces since 2015. Opposition leader Juan Guaido and opposition lawmakers push their way into Venezuela's legislative building today. Venezuela's opposition facing its biggest test yet after government-backed lawmakers announced they were taking control of what Guaido's supporters have described as the nation's last Democratic institution. The opposition winning on that front today. Tesla's factory in Shanghai has delivered its first cars to consumers.  Chief Executive Elon Musk, says the electric automaker plans to set up a design center in China to create a model for worldwide sales. China is the biggest global market for electric vehicles. Just some of the other stories "BEYOND OUR BORDERS" tonight, again, following the breaking news out of Iraq that there are missiles falling right now on U.S. facilities. We'll get more when we get it right here on Fox. We'll be right back.

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BAIER: Continuing our breaking coverage, the bulletin we had just a moment ago. U.S. military sources in Iraq on the ground, saying, an attack from Iran -- directly from Iran is underway to U.S. facilities inside Iraq. National security correspondent Jennifer Griffin, the latest details from the Pentagon. Again, we're just getting spotty information now. Jennifer, what do we know?

JENNIFER GRIFFIN, FOX NEWS NATIONAL SECURITY CORRESPONDENT: Well, Bret, I'm talking to a well-play source in the U.S. military on the ground in Iraq, and that source tells me that these are multiple tactical ballistic or cruise missiles that are being fired from Iran at multiple U.S. bases and U.S. targets inside Iraq. They are under fire right now. I asked if they would had any plans to evacuate. Remember, there are 5,000 American troops still in Iraq. And I was told no, we are defending. So, expect an American response. This is something that we've been expecting all afternoon. There were Situation Room meetings, as well as meetings with top officials here at the Pentagon. There was a lot of chatter. We were told intelligence suggesting that the Iranians would strike at U.S. bases in Iraq after that mourning for Qassem Soleimani ended earlier today. But right now, in real-time, we can confirm that multiple sites including al-Assad airbase in western Iraq, where most of the U.S. troops are base are coming under attack by Iranian missiles, cruise or short-range ballistic missiles according to U.S. defense officials.

BAIER: You know, Jennifer, the one thought was that perhaps, Shia militias loyal to Iran might take up this fight in Iraq or proxies elsewhere throughout the Middle East. The fact that these missiles, according to military officials are coming from Iran is significant. Also, like we saw they believe the missile that struck the Saudi facility -- the refinery was from Iran sends its own message in and of itself.

GRIFFIN: Extremely unusual. We have not seen a missile being fired from Iran into Iraq since the Iran-Iraq War. So, this is a severe escalation.  It is one country firing into another country. And U.S. forces are under attack, but this is also has implications for sovereignty of Iraq at this point. Bret.

BAIER: OK. We'll gather more details as we get video and more information. We'll bring it to you, Jennifer. Thank you on the breaking news from the Pentagon. Turning now across the world, firefighters in Australia, trying to take advantage of cooler and wetter weather before the searing heat returns as they battle that country's worst-ever wildfire epidemic. Correspondent Jeff Paul shows us tonight from Australia horrific damage really has already been done.

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UNIDENTIFIED MALE: That's a good indication of the heat, so --

JEFF PAUL, FOX NEWS CORRESPONDENT: So, they ran from the bushfires with only their lives, but these survivors now return home to find nothing.

RON STONESTREET, RESIDENT, WINGELLO, AUSTRALIA: Fright -- frightened.  When you see what this devastation done here.

PAUL: As weather conditions offer emotional relief for Australians, physically, there is still so much work. Despite around the clock efforts, many fires are still burning out of control from one side of the country to the other. The scorching temperatures on the way, firefighters say, it will take something of a miracle to win this battle.

BRENDON O'CONNOR, VOLUNTEER FIREFIGHTER, BALMORAL, AUSTRALIA: Or the -- when the good Lord opens up the heavens and gives us weeks of rain, (INAUDIBLE). It's really the only options, it's -- it is two lads to put out.

PAUL: Australians are also focused on saving wildlife. Animals either injured during the fires or found starving with their habitats being reduced to mere ash.

RAE HARVEY, OWNER, KANGAROO SANCTUARY, AUSTRALIA: They were all going to be dead. There were so much smoke and fire. I didn't -- I didn't think that there was going to be any alive.

PAUL: With the massive wall of flames burning right up to the coast in some spots, the grip of the bushfire crisis is tightening around businesses, shops, restaurants, and hotels.

LYNN SLATER, STORE OWNER: The tourists have had to leave. They've evacuated the tourists. That was our income, which is all our profit, which will carry us over through winter.

PAUL: The United States is ramping up assistance.

UNIDENTIFIED MALE: Welcome to Australia, appreciate you coming.

PAUL: Groups of firefighters from southern California are making their way to the fires front lines with the Trump administration pledging its support.

MIKE POMPEO, SECRETARY OF STATE: We have a truly unbreakable alliance.  They are our great friends, and we are happy to be able to help the Aussies in this time of need.

(END VIDEOTAPE)

PAUL: And we are getting our first glimpse of the financial toll from all of these fires. Officials saying in the span of about 48 hours insurance claims have reached levels of half-a-billion dollars, and they expect those numbers to keep going up. Bret?

BAIER: Jeff Paul live in Australia, and Jeff, thank you. Continuing coverage there. On the markets here, stocks were down today as investors watched the tensions between the U.S. and Iran. And obviously that is our breaking story at the top of the hour. Banks and consumer products, companies, were worst off today. The Dow lost 120, S&P 500 dropped nine, the Nasdaq fell three. Up next, a big announcement from Senate Republicans about impeachment, and a look back at the last time a president faced a Senate trial with two of the men who played major roles, plus an update on the breaking news out of Iraq under attack from Iranian missiles.

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BAIER: Continuing our breaking news out of Iraq, coverage of what appears to be the Iranian military attack against U.S. facilities inside Iraq.  We're getting word of several missiles, surface-to-surface missiles coming from inside Iran, two bases housing U.S. troops inside Iraq. We don't know how many missiles. We are hearing from senior U.S. military officials on the ground that it is significant, all over the country, according to one. Joining us now from Capitol Hill, Florida Republican Congressman Mike Waltz. He is a member of the House Armed Services Committee, also a decorated war veteran, a former Green Beret. Congressman, what do you know at this hour? And it's early information, but what have you known about what Iran potentially is doing right now?

REP. MICHAEL WALTZ, (R-FL) HOUSE ARMED SERVICES COMMITTEE: From what I was hearing earlier today, we started to see some movement. But what this reminds me of so far is the attack on the Saudi Aramco, which was actually very sophisticated, surprised a lot of Iran watchers and analysts. You had effective coordination between unmanned drones and surface-to-surface cruise missiles on the part of Iran, which was a pretty sophisticated capability, number one. And then number two, it doesn't surprise me these were falling on Iraq because with the militias that Soleimani, until a few days ago, commanded, they would have pretty effective reconnaissance to be able to dial these missiles in. So what I'm watching for as these missiles fall literally as we speak is are they hitting infrastructure or are they specifically trying to target Americans and kill Americans? If they are hitting infrastructure, that could be a signal that while they had to respond, they did so in a way that would lead to some type of future de-escalation. But look, this president has made it clear, if you continue to kill Americans like Iran has done since 1979, there will be very serious consequences, and he will hold a Iran responsible, not the proxies. And I think that is the right move.

BAIER: Congressman, you know, there's a lot of people in this country very fearful that we're heading to a full-scale war with Iran. And while the administration has been saying they want to de-escalate, there are also these images of 52 F-35s from the U.S. Air Force out of Utah, saying there are 52 targets potentially. We've seen what the president has tweeted.  There are six B-52 bombers that have been moved to Diego Garcia that potentially would be used for some action. If it is as you think, and perhaps we are fortunate enough not to have an American servicemember die in these attacks tonight, and it's infrastructure, what then is the U.S. response to the response, do you believe?

WALTZ: I think this is going to be very similar to what you saw, if you look up Operation Praying Mantis in the late 1980s where Iran struck and almost sank one of our frigates, our response, the Reagan administration's response was to sink half of their Navy. And beyond there, Iran didn't respond again. So one thing you have to understand in their psyche and how the Iranian regime thinks is they are the last ones that want an all-out war with the United States because the thing they care about the most is regime survival. And they have a long history of marching right up to the edge and then eventually backing down and surviving to spread its malfeasance another day.

BAIER: But I guess, what I'm saying is, reading between the tea leaves here, what is the Trump doctrine as of tonight when it comes to dealing with this? On the campaign trail and leading up to this moment, it seemed like he wanted to pull out and not get the U.S. engaged in these kinds of moments. But as we sit here tonight, as president, the commander in chief, what do you think his thinking is?

WALTZ: Twofold. Number one, I think a lot of people are conflating this issue. We are not talking a Normandy D-Day style boots on the ground in Iran invasion. And the president has been very clear, nor do I think militarily that is very wise.  But he's not going to let a regime, a terrorist regime, continue to kill Americans time and time again. He has repeatedly shown restraint, whether it was shooting down our drone, whether it was attacking shipping. But when you start storming our embassy and killing Americans as they did in just this last month, we have to respond. The irresponsible thing would be to let them continue to kill Americans. So I think you're going to see a targeted response. The administration has been clear on its strategy, which is economically to continue maximum pressure. I think you will see a response on their oil facilities and their refineries that is going to build on that campaign. And the thing the regime cares about the most is its wallet, is its money, is its ability to stay alive. And eventually they are going to have a choice, either come back to the negotiating table from a position of weakness for a deal that encompasses all its activities, hostage-taking, terrorism, missiles, and its nuclear program, or it's going to face economic internal collapse.  That is eventually the response that the regime and the choice the regime is going to have to make. But I would not want the commander in chief to allow Americans to continue to be killed. Soleimani has done it for years, and what he did was I think a responsible action to eventually de-escalate.

BAIER: The president said he didn't have a problem with Iranian cultural sites being on the list of targets. That was a bit of a cleanup today, as he was asked about that again, and the defense secretary and the secretary of state also responded. Take a listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES: They kill our people, they blow up our people, then we have to be very gentle with their cultural institutions. But I'm OK with it. It's OK with me.

UNIDENTIFIED MALE: I'm fully confident that the president -- the commander in chief will not give us an illegal order.

MIKE POMPEO, SECRETARY OF STATE: Let me tell you who's done damage to the Persian culture. It's not the United States of America. It's the ayatollah.

(END VIDEO CLIP)

BAIER: And the president is saying it's OK with me because he will follow the law, legal targets, and trying to clarify that. But he has talked a lot, a lot more than people thought perhaps he was going to talk about what's coming in response to the response.

WALTZ: Look, I think the president was showing frustration. I can tell you fighting these terrorist groups on the ground, I've been incredibly frustrated that we follow the rules and they don't. But at the end of the day, as Secretary Esper and Pompeo made clear, we will follow the rules.  And that's even when many times these terrorists used mosques and schools and hiding behind human shields to attack us. So look, I think the president in terms of his talking about what we are going to do next is getting inside the Iranian regime's calculus, letting them know there will be an overwhelming response. And this is important, letting them know that we are not going to hold their proxies responsible.  We will hold the regime itself responsible.

BAIER: Congressman Michael Waltz, we appreciate your time from Capitol Hill, dealing with this breaking story. Continuing our breaking coverage, national security correspondent Jennifer Griffin with an update from the Pentagon. Anything new, Jennifer?

JENNIFER GRIFFIN, FOX NEWS NATIONAL SECURITY CORRESPONDENT: Bret, right now we can report that just moments ago, these were either tactical ballistic missiles or cruise missiles that were fired at multiple locations, I'm told from a senior U.S. military source who is based in Iraq tonight, and told me that these missiles were being fired from Iranian territory at these U.S. bases. One of the bases that was targeted was al- Asad Air Base in western Iraq, Anbar province. That is a base where most U.S. troops are based. Iraqis are also based on that in western Iraq at this base. But right now we are hearing that these were either short-range cruise missiles or short-range ballistic missiles. We don't have more details, but they were coming in from multiple locations. We do know that the Iranian Revolutionary Guard Corps has taken responsibility for tonight's attack. We are still getting an assessment as to whether it is ongoing or whether it is over at this point. Again, the details are just coming in as we speak. Bret?

BAIER: White House press secretary saying, quote, "We are aware of the reports of attacks on U.S. facilities in Iraq. The president has been briefed and is monitoring the situation closely, consulting with his national security team." Meanwhile, Iran state TV is saying that These launched tens of surface-to-surface missiles at Iraq's al-Asad Air Base housing U.S. troops. As we get more information from the ground, this was expected, obviously, Jennifer, but there were efforts to shore up some of those facilities ahead of this moment as the mourning for General Soleimani was coming to an end, right?

GRIFFIN: Absolutely. What you've seen in recent days is they have tried to beef up not only force protection, but also move some U.S. military personnel from outposts onto these larger bases so that they could protect them. We know that NATO, at least two NATO members, England and also Germany had pulled hundreds of NATO troops out of Iraq. They were concerned about force protection. We heard from the Defense Secretary Mark Esper today that the U.S. is not leaving Iraq, and it's very important that in my conversations with this U.S. military source, I said is the U.S. pulling out, and he said no, defending, meaning defending the bases that were coming other attack. As you mentioned, there was intelligence. There was increased chatter tonight, and during the day today, the Pentagon here was prepared. You heard Mark Esper at the podium here at the Pentagon say that they did expect this retaliation, they did expect that the proxies of Iran would be trying to target American targets inside Iraq. But what is unusual tonight is the fact that these are missiles that were fired from Iranian territory at American bases inside Iraq.

BAIER: OK, I'm going to play a soundbite. This is from the Iranian foreign minister talking about what the response might look like, and also the president today.

(BEGIN VIDEO CLIP)

MOHAMMAD JAVAD ZARIF, IRANIAN FOREIGN MINISTER: We will respond proportionately, not disproportionately, because we are committed to law.  We are law abiding people. We are not lawless like President Trump.

DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES: If Iran does anything that they shouldn't be doing, they are going to be suffering the consequences, and very strongly.

(END VIDEO CLIP)

BAIER: So that's the question, as I was trying to get with Congressman Waltz, is do we have any sense to what the response to the response may be?

GRIFFIN: I think what we are seeing here tonight at the Pentagon is that there are meetings behind closed doors, there's a skeletal staff here because of the snow situation here in Washington. They closed the federal government. Most of the Pentagon parking lot is empty because most people went home. But the top leaders stayed. They had a late afternoon meeting, and at one point it looked as though this earlier intelligence suggesting there was going to be an attack, that things had calmed down, but then that's when we got reports that the missiles had been fired.  In terms of response, remember, the U.S. has 5,000 troops there, they have a very significant air force presence, they just sent six B-52s out of the region. You have the USS Bataan, Marines en route to the Middle East.  They had sent the 82nd Airborne from Fort Bragg to Kuwait. Some of those troops were moving into Baghdad to help to protect the embassy there.  Remember, this is one of the largest embassies the U.S. has in the world, a $650 million embassy. All of those facilities have to be protected. And so the focus right now is on defending, but certainly there will be reaction in terms of targeting those missiles and the point of origin of those missiles.

BAIER: Right. Jennifer Griffin live at the Pentagon. Jennifer, thank you. Let's go quickly to Baghdad. Trey Yingst is standing by live. What do you know, what do you hear on the ground?

TREY YINGST, FOX NEWS CORRESPONDENT: Bret, good evening. We are still gathering information about this attack in western Iraq towards a military base that houses U.S. troops. The important thing to remember here is all of the reports, and according to Iranian state television, these are ballistic missiles, surface-to-surface missiles that have been fired. This is a major escalation, if confirmed. These types of missiles, simply due to the fact that what we've seen in the past is mortars and rockets being fired towards American and Iraqi bases, mostly run by the Iraqis but housing the Americans. So again, if this is confirmed tonight, the number that we have been able to get from officials and Jennifer Griffin reporting over at the Pentagon, a major escalation, and something that people in Baghdad have been concerned about. We spoke with resident here today, and as we reported earlier on SPECIAL REPORT, they are extremely concerned about what is to come. There was a sort of calm before the storm feeling in Baghdad today because many people here have experienced this before, knowing how quickly conflict can erupt in the region. And this was the major concern, that if Iran does launch a major counterattack as a result of the Americans taking out their top military commander Qasem Soleimani outside of Baghdad's International Airport last week, that this could evolve into a much larger conflict. We were looking at a proxy war in the region, mostly small attacks on Iraqi bases that house American troops, more than a dozen of them over the past six months. But again, ballistic missiles are a completely different thing in the region, and coming from Iranian territory, this leaves all options on the table for the Trump administration. We are getting a statement from the White House, I'm not sure if you guys have it yet, from Stephanie Grisham, the press secretary, indicating that the president is aware of the situation and has been briefed and is consulting with his national security team. Look for more response from the White House throughout the evening, because that is the big question now. The president has promised that he will respond strongly. He made many of those comments online and in- person. We will see what the response from the Americans will be as a result of this reported Iranian attack. Bret?

BAIER: Trey Yingst live in Baghdad. Trey, thank you. Let's bring in two veteran senators right now. We were going to talk about impeachment, we will, but Trent Lott of Mississippi was Senate majority leader 20 years ago tonight as the Senate trial started an impeachment there. Tom Daschle of South Dakota, minority leader during the Clinton impeachment trial, again, 20 years ago. Gentlemen, thank you for coming on. We wanted to talk about the process and looking back and looking forward, but I want to ask your thoughts about this night and what we are seeing currently and what you think of it.

TRENT LOTT, (R-MS) FORMER SENATE MAJORITY LEADER: Obviously it's a concern. We don't know the details like Congressman Waltz does, and even what you are reporting just now is more than what we had learned. It's obviously a very serious matter. Once again, it sort of puts everything in Washington in a different perspective when you're talking about missiles being launched from Iran and American personnel being exposed, it's a very serious matter. And we've got to hopefully find a way to avoid continued escalation.

BAIER: Senator?

TOM DASCHLE, (D-SD) FORMER SENATE MINORITY LEADER: We've had to face these occasions on it seems like countless moments throughout the last 20, 25 years. And I think it's important that cooler heads prevail, and we think thoughtfully and carefully about how we approach the response. And I think it's important we get the facts. And we are obviously doing that tonight.

LOTT: I can't help but recall that, I guess almost 40 years ago the day Reagan was inaugurated, the Iranians released the hostages that had been held in Iran for years. So this is not a new problem, Iran.

BAIER: Speaking of that, you both have dealt with issues in Iran for many, many, many years. As you look at this regime and what it's doing tonight in response, what is your thought? Is this going to be a bigger escalation, do you believe, in the coming weeks?

DASCHLE: It has that potential. Obviously, we really don't know what the circumstances will be, but these occasions escalate very dramatically and quickly sometimes. And so it's really, as I say, it's essential that we do as much as possible to be very thoughtful about how we respond. And I think the next couple days will dictate a lot about what length of time and what depth of consequence we are going to be facing.

BAIER: I want to turn back the clock here. It was 20 years ago tonight that the Senate trial started for the Clinton impeachment trial. You all both were at the helm today. Today the Senate majority leader, McConnell, said he has the votes to move forward with the process, at least initially.  You all had 100 senators on board in 1999. You had a deal, you struck a deal. Why was that important, and why is this different?

LOTT: Well, first of all, I think it's important to look back and remember that it took us a while to get that deal put together. Senator Daschle and I had worked out an arrangement that would have basically completed the process in about two weeks, but I couldn't sell it to the Republican Conference, and we had to go back to the drawing board. And for a week or so we were just trying to figure out what to do, and we had this historic meeting in the old Senate chamber where we came up with the Graham-Kennedy proposal, which was basically, OK, we will get started, hear from the House managers, hear from the president's representatives, have questions from the senators, and then we'd decide where to go from there. So we had a second movement to get the rules to go forward with the witnesses, and depositions were taken.

DASCHLE: And I would just say, Bret, as much as we've look back on that with a great deal of pride and satisfaction, there were votes that were not unanimous by any means. They weren't necessarily partisan votes, but there were deep divisions, deep differences in opinion, on censure, for example, on when you addressed witnesses and how you address them. These were all issues that had to be resolved. That first unanimous resolution set the stage, but it was a difficult time, difficult and different than it is today.

LOTT: But we did have an early vote to dismiss that was engineered by Senator Byrd. But remember this. Other than the article of impeachment vote, which requires 67, anytime you can get 51 votes --

BAIER: You can change the rules.

LOTT: You could go forward. You can change the rules. You can set the rules in place. And I do think that Senator McConnell is right to say we have a template here. This has been done, we can go forward. But it's also, I think, very important that they maintain civility and make it as bipartisan or nonpartisan as they can. This is always historic, unfortunately, only three.

BAIER: There's a lot of hypocrisy in this town, there always is. We have tape that goes back on all sides. You have Senator Graham who was an impeachment manager who was making the case that you don't need a crime.  You have Senator Schumer who is now the minority leader saying we don't need witnesses, there should be no witnesses. Now he's saying we need witnesses. Can anything get done in this town as you look at it today in this current environment?

LOTT: It will have to get done, and it will, I believe. They will come to an agreement on how to proceed.

DASCHLE: I was going to say, USMCA in an example. I think you are going to see in the House, as controversial and difficult as it was, we had majorities of both caucuses who supported it. It matters how much leadership is shown, how much bipartisanship can be developed. And along the way, even though it's as frustrating and contentious, along the way, everybody understands you've got to govern. And I hope that realization will come as we look at the whole impeachment experience.

BAIER: Being leaders of this august body, the Senate, as you were, as you look at House Speaker Nancy Pelosi's and her efforts to hold the articles of impeachment, is she overstepping her role?

LOTT: I've been trying to figure out what is the thinking there. She can't force or dictate what the Senate would do after the House has acted.  But I think she will send articles over to the Senate pretty quickly. I think she was seeing what benefits she might could get, or what pressure she might could apply to get some movement that they would like to see on, perhaps on witnesses. Maybe she's just trying to be helpful to Schumer. But again, the Constitution and the rules with regard to impeachment are pretty clear. They are going to have to send articles of impeachment. The Senate is going to have to act.

DASCHLE: There is no question in my mind the articles will be sent to the Senate, most likely in the next few days. We've gone through the holidays, we have had to -- I think in some ways it was probably good that everybody just cooled down for a few weeks and are coming back maybe with a little clearer thinking. My guess is you're going to see those impeachment articles in the Senate's hands within the next week.

BAIER: Senators, we really appreciate your time. Thanks for rolling with the punches on a breaking news night. Thanks for the look back, as well. Again, the breaking news, multiple Iranian rockets believed to be short- range ballistic missiles, surface-to-surface missiles, fired from inside Iran into Iraq, believed to be at U.S. facilities, perhaps the al-Asad Air Base where U.S. troops are being housed.  Let's bring in Walid Phares, FOX News national security analyst. Walid, we are trying to get the information we can. We don't know much, but what you think this signals?

WALID PHARES, FOX NEWS FOREIGN POLICY ANALYST: First of all, we are all waiting for U.S. official sources to confirm what we are hearing already in terms of news agencies, especially from the region. In the last 15 minutes, Fars Agency from the Iran, which is the official news agency, has issued a press release from the Iranian Revolutionary Guard confirming from their side that they have shot missiles against an Anbard U.S. base, but they also added that they have targeted also Kurdistan, a position in Kurdistan. So we are waiting for more information about the actual facts on the ground.

BAIER: Right. As far as what you know about the Iranians and how they act, what they have been saying, and how significant it was that Soleimani, General Soleimani was taken out, what do you think about what we are hearing from this response, and is it the first phase of what's to come, do you believe?

PHARES: I wouldn't say it's predictable, but it's almost predictable. The Iranian leadership was under two pressures, one coming from the base of the Quds force, from the regime, from the militants, who wanted the ayatollahs to order such a mission because if they don't, then they could not anymore intimidate their many enemies in the region. On the other hand, the more senior seasoned people in the regime, as far as we understand, are very concerned about the risk taken by them targeting U.S. forces because of the threats and the statements made by the president and by the administration in general.

BAIER: Iran has now taken credit for this. We don't know, again, the impacts, the impact of what exactly is happening on the ground, and we hope to have that. But quickly, Walid, what do you think the U.S. might do in response to this?

PHARES: This is, first of all, Bret, rules of engagement. When our forces are under attack, the first rule, the immediate one, tactical, is to respond, stop the firing. But again, in the situation it's really up to the chief executive to decide what exactly needs to be done, and I'm assuming that at this point in time our military and intelligence agencies are submitting what can be done.

BAIER: Walid Phares, national security analyst for FOX, thank you. Breaking news tonight, stay with FOX News Channel for the latest on the Iran retaliation in the form of missiles fired at an Iraqi base housing American troops. We have you covered, breaking news.

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