Presidential candidate Barack Obama sat down with the notoriously conservative, and most times biased, browbeater Bill O’Reilly. The two played nice even though O’Reilly steadily railed Obama on his stance on the troop surge in Iraq. Obama held his ground admitting that the surge is working better than anticipated but pointed out that the Iraqis haven’t held up their end of the bargain, listed other reasons helping to decrease the violence and talked about unresolved issues regarding Bush’s strategy in Iraq.

Here’s a transcript of the interview:

Bill O’Reilly: Well, first of all, thanks for being a man of your word.

SEN. OBAMA: You bet.

MR. O’REILLY: But I was worried there for a while.

SEN. OBAMA: (Laughs.)

MR. O’REILLY: It’s been nine months since we last met in New Hampshire.

SEN. OBAMA: It took a little while. I’ve had a few things to do in between.

MR. O’REILLY: I understand.

SEN. OBAMA: Yeah. But I appreciate you having me on the show.

MR. O’REILLY: Okay. Let’s start with national security. Do you believe we’re in the middle of a war on terror?

SEN. OBAMA: Absolutely.

MR. O’REILLY: Who is the enemy?

SEN. OBAMA: Al Qaeda, the Taliban, a whole host of networks that are bent on attacking America, who have a distorted ideology, who have perverted the faith of Islam. So we have to go after them.

MR. O’REILLY: Is Iran part of that component?

SEN. OBAMA: Iran is a major threat. Now, I don’t think that there is the same — they are not part of the same network. You know, you got Shi’a and you got Sunni. We gotta have the ability to distinguish between these groups because, for example, the war in Iraq is a good example where I believe the administration lumped together Saddam Hussein, a terrible guy, with al Qaeda which had nothing to do with Saddam Hussein.

MR. O’REILLY: All right. We’ll get to that in a minute.

SEN. OBAMA: And as a consequence, we ended up, I think, misdirecting our resources. So they’re all part of various terrorist networks that we have to shut down and we have to destroy. But they may not all be part and parcel of the same ideology.

MR. O’REILLY: But I still don’t understand — and I’m asking this as an American as well as a journalist — how threatening you feel Iran is. See, look, if Iran gets a nuclear weapon, okay, to me, they’re going to give it to Hezbollah if they can develop the technology. Why not? And so we don’t have anything to do with it. So therefore, the next president of the United States is going to have to make a decision about Iran, whether to stop them militarily. Because I don’t believe — if diplomacy works, fine. But you’ve got to have a plan b. And a lot of people are saying, look, Barack Obama’s not going to attack Iran.

SEN. OBAMA: Here’s where you and I agree. It is unacceptable for Iran to possess a nuclear weapon. It would be a game changer, and I’ve said that repeatedly. I’ve also said I would never take a military option off the table.

MR. O’REILLY: But would you prepare for one?

SEN. OBAMA: Well, listen –

MR. O’REILLY: Answer the question, Senator. Anybody can say options. Would you prepare for it?

SEN. OBAMA: Look, it is not appropriate for somebody, who is one of two people who could be the president of the United States, to start tipping their hand in terms of what their plans might be with respect to Iran. It’s sufficient to say I would not take the military option off the table and that I will never hesitate to use our military force in order to protect the homeland and United States interests.

But where I disagree with you is the notion that we’ve exhausted every other resource. Because the fact of the matter is is that for six, seven years during this administration, we weren’t working as closely as we needed to with the Europeans to create –

MR. O’REILLY: Diplomacy might work. You might be able to strangle them economically.

SEN. OBAMA: Sanctions, maybe.

MR. O’REILLY: Maybe. But that’s just all hypothetical.

SEN. OBAMA: Well, everything is hypothetical. But the question is, are we trying to do what we need to do to ratchet up the pressure on them to change their –

MR. O’REILLY: Okay. We’ll assume that you’re going to ratchet everything you can ratchet.

SEN. OBAMA: Right.

MR. O’REILLY: But I’m going to assume that Iran’s going to say, “blank” you, we’re going to do what we want. And I want a president, whether it’s you or McCain, who says, you ain’t doing that.

All right, let’s go to Iraq. I think history will show it’s the wrong battlefield, okay. And I think that you were perspicacious in your original assessment of the battlefield.

SEN. OBAMA: I appreciate that.

MR. O’REILLY: I think you were desperately wrong on the surge. And I think you should admit it to the nation that now we have defeated the terrorists in Iraq. And the al Qaeda came there after we invaded, as you know. Okay, we’ve defeated them. If we didn’t, they would have used it as a staging ground.

We’ve also inhibited Iran from controlling the southern part of Iraq by the surge which you did not support. So why won’t you say, I was right in the beginning, I was wrong about that?

SEN. OBAMA: You know, if you’ve listened to what I’ve said, and I’ll repeat it right here on this show, I think that there’s no doubt that the violence in down. I believe that that is a testimony to the troops that were sent and General Petraeus and Ambassador Crocker. I think that the surge has succeeded in ways that nobody anticipated, by the way, including President Bush and the other supporters.

It has gone very well, partly because of the Anbar situation and the Sunni –

MR. O’REILLY: The awakening, right.

SEN. OBAMA: — awakening, partly because the Shi’a –

MR. O’REILLY: But if it were up to you, there wouldn’t have been a surge.

SEN. OBAMA: Well, look –

MR. O’REILLY: No, no, no, no.

SEN. OBAMA: No, no, no, no, no, no, no.

MR. O’REILLY: If it were up to you, there wouldn’t have been a surge.

SEN. OBAMA: No, no, no, no. Hold on.

MR. O’REILLY: You and Joe Biden — no surge.

SEN. OBAMA: No. Hold on a second, Bill. If you look at the debate that was taking place, we had gone through five years of mismanagement of this war that I thought was disastrous. And the president wanted to double-down and continue on open-ended policy that did not create the kinds of pressure in the Iraqis to take responsibility and reconcile –

MR. O’REILLY: It worked. Come on.

SEN. OBAMA: Bill, what I’ve said is — I’ve already said it succeeded beyond our wildest dreams.

MR. O’REILLY: Right! So why can’t you just say, I was right in the beginning, and I was wrong about the surge?

SEN. OBAMA: Because there is an underlying problem with what we’ve done. We have reduced the violence –

MR. O’REILLY: Yeah?

SEN. OBAMA: — but the Iraqis still haven’t taken a responsibility. And we still don’t have the kind of political reconciliation. We are still spending, Bill, 10 (billion dollars) to $12 billion a month.

MR. O’REILLY: And I hope if you’re president, you can get them to kick in and pay us back.

SEN. OBAMA: They’ve got $79 billion in (New York ?)!

MR. O’REILLY: And I’ll go with you!

SEN. OBAMA: Let’s go!

MR. O’REILLY: We’ll get some of that money back.

SEN. OBAMA: (Laughs.)

MR. O’REILLY: All right. Let’s go to Afghanistan. Look, there’s no winning the Taliban war unless Pakistan cracks down on the guys that are in Pakistan.

SEN. OBAMA: You and I agree completely.

MR. O’REILLY: Okay, yeah, we all know that.

SEN. OBAMA: Right.

MR. O’REILLY: You gave a speech in Denver — good speech, by the way –

SEN. OBAMA: Thank you.

MR. O’REILLY: — but you bloviated about McCain not following him to the cave. You’re not going to invade Pakistan, Senator, if you’re president. You’re not going to send ground troops in there. You know it.

SEN. OBAMA: Here’s the problem. John McCain loves to say, I would follow him to the gates of hell.

MR. O’REILLY: Well, he’s not going to invade, either.

SEN. OBAMA: The point is, what we could have done is –

MR. O’REILLY: Not “could.” Let’s stay now.

SEN. OBAMA: What we can do –

MR. O’REILLY: Yeah.

SEN. OBAMA: — is stay focused on Afghanistan and put more pressure on the Pakistanis.

MR. O’REILLY: Like what?

SEN. OBAMA: Well, for example, we are providing them military aid without having enough strings attached. So they’re using the military aid that we use –

MR. O’REILLY: For nothing!

SEN. OBAMA: — to Pakistan, they’re preparing for war against India.

MR. O’REILLY: So you’re going to pull out and let the Islamic fundamentalists take them over?

SEN. OBAMA: No, no, no, no. What we say is, look, we’re going to provide them with additional military support targeted at terrorists, and we’re going to help build their democracy and provide the kinds of funding –

MR. O’REILLY: The things that we’re doing now. Negroponte is over there, and he’s doing that now.

SEN. OBAMA: That’s not what we’ve been doing. We’ve wasted $10 billion with Musharraf without holding him accountable for knocking out those safe havens.

MR. O’REILLY: All right. So you are going to, again, more diplomacy — and we need it, absolutely — try to convince the Pakistani government to take a more aggressive approach and saying, if you don’t, we’re going to pull the funding.

SEN. OBAMA: And what I will do is, if we have bin Laden in our sites –

MR. O’REILLY: Yeah.

SEN. OBAMA: — we target him, and we knock him out.

MR. O’REILLY: But everybody will do that. That will be the biggest win Bush could have if he could do that.

SEN. OBAMA: Of course.

MR. O’REILLY: But you can’t send ground troops in because if all hell breaks loose.

SEN. OBAMA: We can’t have — nobody talked about a full-blown invasion of Pakistan. The simple point that I made was we’ve got to put more pressure on Pakistan to do what they need to do.

(Pause videotaped interview.)

MR. O’REILLY: All right. Again, the rest of the interview will be seen on Monday, Tuesday and Wednesday of next week, and it is lively.
END.

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