This is a rush transcript from "Special Report with Bret Baier," January 3, 2020. This copy may not be in its final form and may be updated.

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Donald Trump: Last night at my direction, the United States military successfully executed a flawless precision strike that killed the number one terrorist anywhere in the world.

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Bret Baier: President Trump saying he ordered the attack on Iran's top general not to start a war but to stop one. The president says he does not seek regime change in Tehran. Good evening. Welcome to Washington, I'm Bret Baier. Breaking tonight. The U.S. is bracing for what Iran is calling "harsh retaliation" after a drone strike against General Qasem Soleimani early this morning in Iraq. The president saying Soleimani was plotting an imminent attack on Americans in the region. We have Fox team coverage tonight. Kevin Corke is in West Palm Beach, Florida, with what else the president is saying about that attack and what it means. Trey Yingst is in Amman, Jordan, telling us what's being said in the world's most dangerous neighborhood with some breaking news as well. And we begin with national security correspondent Jennifer Griffin at the Pentagon with details of this significant strike. Good evening, Jennifer.

Jennifer Griffin: Good evening, Bret. Members of the 173rd airborne brigade in Italy are on high alert tonight, ready to deploy to Lebanon to protect the U.S. embassy there. The Pentagon has also ordered 3,000 additional U.S. troops from the 82nd Airborne to deploy to Kuwait. They will join 750 paratroopers sent from North Carolina earlier this week.

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Donald Trump: He was planning a very major attack, and we got him.

Jennifer Griffin: Qasem Soleimani was the second most powerful leader in Iran, serving as the right hand of Supreme Leader Ayatollah Khamenei. He was responsible for exporting the Iranian revolution and killing American troops for decades.

Donald Trump: We take comfort in knowing that his reign of terror is over. Soleimani has been perpetrating acts of terror to destabilize the Middle East for the last 20 years. What the United States did yesterday should have been done long ago.

Jennifer Griffin: The U.S. administration contends what triggered the president's decision to strike was new intelligence about pending attacks targeting Americans directed by Soleimani, who had become a fixture in Baghdad directing Shiite militias fighting ISIS.

Mike Pompeo: The risk of doing nothing was enormous, enormous in the short term in terms of the imminent attack that cost him Soleimani was plotting, but also highly risky. Doing nothing in this region shows weakness. It emboldens Iran.

Jennifer Griffin: Soleimani had gone from shadowy commander to making high profile visits in recent months. An armed American drone was waiting for him when he exited his flight from Lebanon and his convoy prepared to leave the Baghdad airport. He was greeted by Abu Mahdi Mohandas, the head of the Iranian backed Shiite militias, which led the attack on the U.S. embassy this week and fired 31 rockets into a U.S. base, killing an American contractor. Mohandas and five others were also killed. Defense Secretary Mark Esper foreshadowed the attack when he told reporters at the Pentagon before the airstrike, "The game has changed." Soleimani perfected the use of explosive formed penetrators, which slice through American armor with devastating effect, killing more than 500 American troops during the Iraq war.

Male Speaker: He is absolutely responsible for killing many Americans. In fact, I would say the last two years I was there, the majority of our casualties came from his surrogates, not not Sunni or al-Qaeda.

Jennifer Griffin: The Iranian commander also ordered the assassination of Saudi Arabia's ambassador to the United States outside a popular restaurant here in Washington, in 2011. U.S. authorities thwarted the plot. U.S. embassies across the Middle East could be targets for Iranian retaliation as well as U.S. bases. Sixty thousand U.S. troops in the Middle East are on high alert. Iran could also disrupt shipping and oil tankers in the Strait of Hormuz, as it has done in the past.

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Jennifer Griffin: U.S. officials are also concerned about Iran retaliating with possible cyber-attacks. Iranian proxies have previously targeted U.S. infrastructure in cyberspace. New York Governor Andrew Cuomo bolstered security at critical New York infrastructure today. And even places like Arlington National Cemetery have increased security amidst the mounting tension. Bret?

Bret Baier: Jennifer Griffin live at the Pentagon. Jennifer, thank you. The question is, what's next? Iran's president is calling the attack a heinous crime and vowing revenge. Correspondent Trey Yingst has the latest from Amman, Jordan, tonight.

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Trey Yingst: Twisted metal is all that's left of a car that Iranian military commander Qasem Soleimani was riding in. Soleimani killed in what Iranian officials call a targeted assassination by U.S. forces overnight outside Baghdad International Airport. His country's leader, the Ayatollah Khamenei, calling for revenge and paying a visit to the family of his top general. This as a spokesperson for Iran's Revolutionary Guard threatened the West.

Male Speaker: The happiness of Americans and Zionists will not last long and will soon turn into mourning.

Trey Yingst: Thousands of Iranians protested the killing today in the streets of Tehran, chanting, "Fight the U.S." Iranian proxies across the region, who previously took direction from Soleimani, mourning his death. In Lebanon, Hezbollah calling Soleimani "the martyr of the axis of resistance." Inside Gaza, Hamas and Islamic Jihad condemning the strikes. And in Iraq, miles from where Soleimani was killed, Iraqi Prime Minister Adil Abdul-Mahdi announced he is calling an emergency parliament session to vote on the future of American troop presence inside Iraqi territory. Russia, an Iranian ally, said the attack was "fraught with serious consequences" and accused President Trump of "acting with one eye on his reelection." U.S. ally Israel is applauding the American strikes that also killed at least four other Iranian Revolutionary Guard members.

Male Speaker: Just as Israel has the right of self-defense, the United States has exactly the same right.

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Trey Yingst: Analysts warn in the region tonight that it is not a question of if Iran will respond but whether, when, and where; thus, the region remains on edge tonight waiting that possibility. Bret.

Bret Baier: Trey, speaking of bad, it was about this time last night that we had first indications of a strike at the Baghdad airport. Now we're getting some indication, some reports, about another strike in Iraq?

Trey Yingst: We are. Just a few minutes ago, reports coming in from Al Mayadeen television station and also Sky News Arabia. They are citing witnesses on the ground that say they've seen an airstrike happen in Northern Baghdad against two vehicles, a small convoy that was traveling there. Those reports saying that the people inside those vehicles were members of the PMF. This is an Iraqi militia group that is backed by the Iranian regime and one of their deputy commanders was actually killed in the strike yesterday along with Soleimani outside of Baghdad's international airport. Bret.

Bret Baier: Trey Yingst, live in Amman. Trey, thank you. We should point out central command is now confirming that. Again, these reports are similar to what we heard last night that started -- what led to, eventually, the confirmation of this strike at the Baghdad airport. President Trump says he is prepared to take whatever action is necessary to protect Americans, but many lawmakers, especially on the other side of the aisle, are fiercely critical of this move. Correspondent Kevin Corke is outside the president's Florida compound tonight. Good evening, Kevin.

Kevin Corke: Good evening, Bret. A bold move by a president determined to protect American life or a reckless stunt that will make them less safe? As is often the case, the viewpoint depends on your politics in Washington.

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Donald Trump: We took action last night to stop a war. We did not take action to start a war.

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Kevin Corke: President Trump's bellow was as caustic as it was cautionary: Target Americans and you'll pay the ultimate price.

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Donald Trump: Under my leadership, America's policy is unambiguous to terrorists who harm or intend to harm any of American. We will find you. We will eliminate you.

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Kevin Corke: The president also signaled a willingness to make a deal with Iran tweeting, "Iran has never won a war, but never lost a negotiation." Earlier in the day on Twitter, he accused the Iranian terrorist of "killing or badly wounding thousands of Americans" and said he was "plotting to kill many more but got caught." The aftermath, mourned and celebrated by the Iraqis. "Dancing in the street for freedom," tweeted Secretary of State Mike Pompeo. But the operation drew a cascade of Democratic dissent. "Risking further escalation," said Illinois Senator Dick Durbin. Connecticut's Chris Murphy called the White House "totally unprepared for the consequences." Washington's Adam Smith accused the president of "bringing the country to the brink of another war," while House Speaker Nancy Pelosi complained that the action was "taken without the consultation of Congress." Democrats were read in after the fact.

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Male Speaker: The question is why the administration chose this moment, why this administration made the decision to remove him from the battlefield when other administrations both parties decided that would escalate the risk.

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Kevin Corke: There was similar consternation by Democrats following the elimination of Abu Bakr Al-Baghdadi; this time, Republican Senator Lindsey Graham was read in before the strike.

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Lindsey Graham: The last group of people you want to talk to about this is Democrats in Congress or Republicans in Congress. To all those Democrats who are criticizing the president, I was aware of what his options were. They were about to unleash holy hell on our people in Iraq and throughout the region, and the president decisively took action.

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Kevin Corke: White House officials say they are aware that the resulting fallout from the strike on General Soleimani could include terror plots that were already in motion across the globe, Bret. However, they insist his demise was long overdue and much, much needed. Bret.

Bret Baier: Kevin Corke, live in West Palm Beach, Florida. Kevin, thank you. Let's get some insight on this situation with Iran. Norman Roule is former Iran mission manager for the director of national intelligence, and before that job, spent more than 30 years at the CIA working on Middle East issues. Norman, thanks for being here.

Norman Roule: My pleasure.

Bret Baier: People who haven't been following who Qasem Soleimani is, how significant first is this strike?

Norman Roule: This is a significant body blow to the Islamic Republic. Their primary face of the revolution, the man responsible for all of their external adventurism, has just been eliminated. He will be difficult to replace as an icon, as a symbol.

Bret Baier: You know, it's important to remember that the administration was not just, it wasn't just yesterday that this started. The timeline for this effort really goes back some time.

Norman Roule: Absolutely, and we should remember that for about a year, the administration has been publicly calling for Iran to cease its threat to American forces in Iraq and in the region. There have been public, private statements in this regard. There have been attempts to deal with the Iraqi government. In many ways, the administration's pursued a very textbook escalation ladder, each time offering Iran the opportunity to cease its behavior. Iran chose badly.

Bret Baier: I asked the secretary of state back in April about this effort to put Soleimani on a terrorist list. Again, April of last year. Take a look.

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Bret Baier: The head of the IRGC, this man Qasem Soleimani, is by all accounts a bad character and has led all kinds of attacks, but are you saying that he now is equated to, let's say, the head of ISIS, al-Baghdadi, in U.S. policy perspective?

Mike Pompeo: Yea he's a terrorist.

Bret Baier: So, we as a country have a policy to target him or capture him?

Mike Pompeo: Qasem Soleimani has the blood of Americans on his hands, Bret, as does the force that he leads, and America is determined each time we find an organization, institution or an individual that has taken the lives of Americans, it is our responsibility. It's indeed President Trump's duty.

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Bret Baier: So, the question is what happens now? What does Iran do? Do you think?

Norman Roule: I think Iran going to have some difficulty determining that. The easy answer is to make life more difficult for the United States in Iraq, to threaten our partners in the region, primarily Israel, but also Bahrain, the Emirates and Saudi Arabia and Kuwait. But for the Iranians, they've got to seek a policy that does three things simultaneously: punishes the United States and deters further attacks, doesn't bring in the Europeans, doesn't threaten European interests because they need their diplomatic support, but most importantly, doesn't compel the United States to respond in an action that could bring about the end of the Islamic Republic.

Bret Baier: So, attacking Israel off the table you think?

Norman Roule: I think it wouldn't be their first choice because it doesn't allow them to punish the Americans who were directly responsible for the death of Qasem Soleimani.

Bret Baier: Cyberattacks?

Norman Roule: Cyberattacks are certainly likely and in part of their routine playbook, but they lack, I think, the punch that Iran would like to undertake.

Bret Baier: What about the sanctions and what really is happening inside Iran? Do we have a good sense of what the sanctions are doing and the boot on the neck of the country there?

Norman Roule: The administration has provided a lot of information that shows they do have excellent insights into what's happening. In essence, what you've got are sanctions that are undermining the security of the regime, and for Iran, inevitably, they know that these sanctions will produce economic problems that will bring about the end of the regime. What this means is Iran will have to strike out against the international community. They have to compel them to push back on Washington in this regard.

Bret Baier: There is an Iranian journalist who tweeted out this, "For many Iranians, Qasem Soleimani was a warmonger who caused massive casualties in Syria. He was no hero to the average Iranians who chanted against the country's support for Hezbollah and Hamas. Unfortunately, Western media misses the point by glorifying Soleimani. He was the common enemy for the people in Iran, Lebanon, Iraq and Syria. His involvement in the crackdown against university students in the late 1990s was another black mark against him." Goes on to say that a lot of people in Iran are happy that Soleimani was killed. Do you buy that?

Norman Roule: I think we have to remember that during the recent demonstrations there were a number of videos of Iranians tearing down pictures of Qasem Soleimani. That said, he does remain, did remain, a popular figure in Iran, and the regime is going to use every tool it's got in its propaganda machine to whip up a frenzy of support in order to improve their own stability, but in Iran and in the region, Qasem Soleimani had political enemies. He had competitors, and I suspect there's some of them are happy that he is gone.

Bret Baier: I want to play one more sound bite, and this is Senator Kaine from the Senate floor and this is a common argument that we heard today from Democratic politicians, in particular.

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Tim Kaine: The same group of warmongering political ideologues who told Americans that the Iraq war would lead to democracy breaking out in the Middle East are telling us today that the Iranians will be celebrating in the streets.

Chris Van Hollen: The truth is that this action will likely usher in the most militant parliament in Iran that we have seen in decades.

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Bret Baier: And of course, Senator Chris Van Hollen. But they're saying that essentially Soleimani is more dangerous now as a martyr in Iran than he was alive.

Norman Roule: Well, I'm not sure that's true. Again, in the short term, the Iranian government is going to try to whip up a frenzy of internal support, but the secretary of state has provided a compelling statement that they have intelligence, the administration has intelligence, that Americans would have died had they not undertaken this action. That's an important fact. So, I think it might be a reach to say that Iran's next parliament is going to be decided solely on the basis of the American actions. I think Iran's parliament is going to be decided on the basis of their terrible economic, political, social and environmental problems.

Bret Baier: Alright, last thing what are we not thinking about here? Because obviously a lot of things are being said, but the thing that we're not thinking about?

Norman Roule: I think what we need to focus on is this should be an international fight. This is not just America's battle. Europe has stood with us in the fight against ISIS. Europe has stood with us in the fight against al-Qaida. Europe needs to stand with the United States to tell Iran this is the time to de-escalate. The secretary of state has publicly stated he's reached out to many partners to say we're interested in avoiding a conflict. Europe needs to tell the Iranians they need to stop this dangerous series of reprisals before this gets out of hand.

Bret Baier: Norm, a nonpartisan voice, an intelligence asset, and we appreciate your expertise.

Norman Roule: Thank you.

Bret Baier: Up next, we will look at the economic ramifications of the American strike against Iran's top general. First, beyond our borders tonight. One of the largest evacuations in Australia's history is underway ahead of hot weather and strong winds forecast to worsen those devastating wildfires we've been reporting across that country. Traffic gridlocked today as people fled and firefighters escorted convoys of evacuees. The death toll from floods in Indonesia's capital has risen to 43 as rescuers find more bodies amid receding floodwaters. Monsoon rains and rising rivers submerged at least 182 neighborhoods in the greater Jakarta and caused landslides on the city's outskirts. And a man armed with a knife rampaged through a Paris park today, attacking passersby, seemingly at random. One person was killed, two others injured before police fatally shot the suspect. No word yet on what the man's motives were. Just some of the other stories beyond our borders tonight. We'll be right back.

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Bret Baier: As we told you earlier, President Trump has been speaking to evangelicals in Miami, just finishing wrapping up, addressing a demographic that helped him win in 2016 and upon which he is heavily counting on this fall.

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Donald Trump: Together we are not only defending our constitutional rights, we're also defending religion itself. A society without religion cannot prosper. A nation without faith cannot endure because justice, goodness, and peace cannot prevail without the glory of almighty God.

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Bret Baier: More on that with the panel a bit later. The third largest religious domination in the country is planning to split over the issue of gay marriage. That tonight from the United Methodist Church, saying it will allow traditionalist congregations who oppose same-sex marriage and gay clergy to form their own branch and follow their own beliefs. The plan must be approved by the church's worldwide conference in May. The United Methodist Church has more than 13 million members in the U.S. and 80 million worldwide. Concerns over instability in the Middle East sent stocks down today. The Dow finished off 234, the S&P 500 lost 23, the Nasdaq dropped 71. For the week, the Dow was down four-hundredths of a percentage point, the S&P 500 was off a sixth, the Nasdaq was up a sixth. The price of oil shot up today in reaction to the U.S. strike against Qasem Soleimani. Susan Li of the Fox Business Network joins us now from New York with more on the economic ramifications of this action. Good evening, Susan.

Susan Li: Good evening, Bret. The U.S. markets recovering from much worse levels earlier on in the session when news of the U.S. airstrike broke. Oil prices, though, feeling the biggest impasse. The Middle East, including Iran, accounting for more than 60 percent of the world's proven oil reserves. So, as a result, oil prices surging in near four-month highs for North Brent crude, biggest gain for U.S. West Texas oil in four weeks. Now, in the past a reaction would have been much more severe. But Iran's oil exports have been crippled by U.S. sanctions the past 18 months, now only producing a quarter-million barrels per day that's actually shipped, much less than OPEC's largest oil exporter, Saudi Arabia, which pumps more than six million barrels per day. Iraq and the United Emirates selling more than three million. Oil price specs are also being capped by the U.S. fracking boom with the U.S. becoming a net oil exporter at the end of last year for the very first time in 75 years, and U.S. officials warn that energy facilities may be a target of Iranian retaliation. Defense talks rallying in the session as well as the U.S. sends more troops to the Mid-East with heightened tensions that might require more weapons and planes sales. Northrop Grumman, Lockheed, Raytheon, big gainers on the day. And despite the stock market falling from its record highs on Friday, investors seem to be used to the routine where markets quickly bounce back.

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Male Speaker: Maybe we've just kind of got this kneejerk Pavlovian reaction here in the market where any time this thing goes down, for any reason whatsoever, people come in and buy this thing. [end video clip]

Susan Li: Investor confidence also shaken by the weakest read for U.S. manufacturing in 10 years, shrinking for a fifth straight month, struggling through what some have called a manufacturing recession. But it's good to keep things in perspective. The Federal Reserve also today signaling a comfort in keeping interest rates low, likely preserving the longest bull market run in history. Bret.

Bret Baier: It has been something. Susan Li, live in New York. Susan, thanks. When we come back, Democratic presidential candidates go after President Trump for that attack on Iran's top general.

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Bret Baier: Our top story at the bottom of the hour, President Trump and his allies defending the decision to kill Iran's top general in a drone strike early today in Baghdad. They say it was necessary to prevent more attacks against U.S. interests, attacks that were imminent. But many Democrats that working to replace President Trump definitely do not see it that way and are saying so on the campaign trail. Correspondent Peter Doocy has reaction tonight from Cedar Rapids, Iowa.

Peter Doocy: Democrats don't dispute that Qasem Soleimani is responsible for American deaths.

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Joe Biden: The deaths of U.S. troops are on his hands.

Pete Buttigieg: He has blood on his hands.

Male Speaker: A murderer with the blood of Americans on his hands.

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Peter Doocy: It's just not entirely clear what these Democrats would do differently.

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Reporter Question: As commander in chief, if you were ever handed a piece of intelligence that said you can stop an imminent attack on Americans, that you have to use an airstrike to take out a terror leader, would you, would you pull the trigger?

Joe Biden: Well, we did, and the guy's name was Osama bin Laden.

Peter Doocy: And weren't you --

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Peter Doocy: -- didn't you tell President Obama not to --

Joe Biden: No, I didn't.

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Peter Doocy: But he did eight years ago.

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Joe Biden: Mr. President, my suggestion is don't go. We have to do two more things to see if he's there.

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Peter Doocy: A bigger problem for Biden this time is where Soleimani worked.

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Joe Biden: But no matter how rightly reviled he was in the West, he was a senior figure of the Iranian government.

Peter Doocy: Now, some contenders are weighing in with their military experience like Pete Buttigieg.

Pete Buttigieg: Taking out a bad guy is not a good idea unless you are ready for what comes next.

Peter Doocy: Tulsi Gabbard, too.

Tulsi Gabbard: You know, Trump talked a lot in his campaign for the presidency, and even since he's been in office, about how he wants to end forever wars, but his actions tell a different story.

Peter Doocy: Bernie Sanders shares her concern.

Bernie Sanders: This is a dangerous escalation.

Peter Doocy: That's why Joe Biden isn't sure about the wisdom of sending thousands of troops to the region.

Is that in order that you would make?

Joe Biden: Well, first of all, I don't know, and you don't know what the hell he's done. You don't know if he's coordinating with our allies. We have no idea what commitments he's made. We have no idea. I just hope he has a plan for second and third iterations of this.

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Peter Doocy: But Biden isn't just in the middle of a fight with President Trump. He's also got a primary fight with Bernie Sanders on his hands because Sanders is now calling Biden out in a new interview, saying he thinks the former V.P. has too much baggage, and a few minutes ago on his way into the campaign bus. Biden said he thinks Bernie has got the baggage, Bret.

Bret Baier: Right back at you. A snowy Cedar Rapids, Iowa, Peter, thanks.

The airstrike in Iraq has pushed impeachment off the exclusive center stage for now, but plans are still being made, accusations traded back and forth. Senior Capitol Hill producer Chad Pergram shows us from Capitol Hill.

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Chad Pergram: Even as the second session of the 116th Congress grapples with the fallout from the strike on Soleimani, the future of an impeachment trial is still part of the agenda. Senate Minority Leader Chuck Schumer re-upped his ante on calling four witnesses, saying new evidence demands new testimony.

Chuck Schumer: When Leader McConnell suggests we have both sides present their arguments and then deal with witnesses, he is essentially proposing to conduct the whole trial, and then, once the trial is basically over, consider the question of evidence that makes no sense. That's Alice in Wonderland logic.

Chad Pergram: Majority Leader Mitch McConnell kept to his guns that there's a working model in place since the Clinton impeachment.

Mitch McConnell: The Senate passed a unanimous bipartisan resolution 100 to nothing that set up the initial logistics. It stayed solid on mid trial questions such as witnesses until the trial was actually underway.

Chad Pergram: House Speaker Nancy Pelosi continues holding the impeachment articles and her next steps close to the vest. Pelosi demands assurances the Senate first establish what she considers fair ground rules for a trial before sending the articles to the Senate. The speaker accused McConnell of doubling down.

Mitch McConnell: This fantasy that the speaker of the House will get to hand design the trial proceedings in the Senate -- that's obviously a nonstarter.

Chad Pergram: McConnell accused Democrats of getting what he termed, quote, "cold feet" and flinching when it came to impeaching President Trump. McConnell dared the House to send the articles across the Capitol Rotunda.

Mitch McConnell: Their turn is over. They've done enough damage. It's the Senate's turn now.

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Chad Pergram: Despite not having the articles of impeachment, Republican Missouri Senator Josh Hawley will introduce a motion to dismiss the articles sometime next week. Also, there will be a classified briefing on the drone strike for all senators next week Bret, too.

Bret Baier: Chad Pergram live on Capitol Hill Chad, thank you.

Chad Pergram: Thank you.

Bret Baier: The U.S. takes out Iran's top military leader. The fallout now and what comes next. We'll get reaction from the panel when we come back.

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Donald Trump: We took action last night to stop a war. We did not take action to start a war.

Male Speaker: We have to fully expect there will be Iranian retaliation.

Mike Pompeo: The risk of doing nothing was enormous, enormous in the short-term in terms of the imminent attack that Qasem Soleimani was plotting, but also highly risky. Doing nothing in this region shows weakness it emboldens Iran.

[end clip]

Bret Baier: What's clear, the U.S. is not doing nothing. Now, the Associated Press has that Iraqi officials in Baghdad saying that this attack on a convoy is real and that it seems like several cars have been taken out north of Baghdad. Perhaps another drone strike. We're trying to get more word from Central Command at this hour. It's about this same time last night that all of this went down with Qasem Soleimani. Let's bring in our panel, Steve Hayes, editor of The Dispatch, Mollie Hemingway, senior editor at The Federalist, and Charles Lane, opinion writer for The Washington Post. All right, Steve, first to you. We have been covering Qasem Soleimani for a long time. This is -- it's hard to overstate how big a deal it is as far as that figure being taken out.

Steve Hayes: It is. I think it is hard to overstate both because of the terror that that ends, or at least the leadership of the terror that this strike ends, but also because of what it portends for what's to come, which I think will be a greater conflagration, almost certainly. What's so striking about this, it seems to me, is the contrast with the Obama administration position. For eight years, you had Barack Obama and his administration treat Iran basically as a would be ally. And we had some distance with some remove, but the hope was that they could, with concessions and with diplomacy, bring Iran into the civilized community of nations. Many of us, I think, thought that was a fool's errand at the time. They would argue that the diplomacy was successful and that the JCPOA, the Iran deal was working, but what they did that was so important -- and that I think was in retrospect certainly a mistake -- was to decouple the nature of the Iranian regime and its behavior attacking U.S. interest, attacking U.S. forces, supporting and harboring al-Qaida and a variety of other terror groups, from it's nuclear deal. They only wanted to deal with Iran and talk about the nuclear deal, they sat everything else aside. What the Trump administration is saying here is the nature of the regime matters a lot. It's fundamental to how we think about Iran, how we approach Iran, and how we'll deal with Iran in the future. And this strike taking out Qasem Soleimani, who was arguably the most powerful man in Iran, certainly the second, sends a clear and unmistakable message that that's not going to be tolerated anymore. This is a big change.

Bret Baier: Mollie, Republicans say strength is powerful in this region, weakness is provocative. Democrats say this. This is Joe Biden and Bernie Sanders.

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Joe Biden: This is and was an enormous escalation and follows a string of dubious actions that President Trump has taken that have drastically increased the prospects and the risk of war with Iran and danger to Americans.

Bernie Sanders: This is a dangerous escalation that brings us closer to another disastrous war in the Middle East.

[end video clip]

Bret Baier: I should point out it's not along strict party lines. There are some Republicans, like Rand Paul and others, who have concerns and problems with this action.

Mollie Hemingway: There have been many wise people who have been warning about escalation with Iran. But it's interesting to note how many people have been so wrong when they predict war in the Trump administration. You remember when he was first elected people said there would be nuclear war with North Korea within the first year. When the embassy was moved to Jerusalem, people said this will definitely inflame the entire region. And now they're saying this is certainly going to lead to war with Iran. That is not necessarily true, and it doesn't seem like there's any reason to believe that it's true. It is, it is something that people have to deal with, that weakness can be a provocation, particularly with Iran. When you look at this lengthy, 40-plus year history we've had of conflict with them, they respond better in terms of our interests when you are decisive with them than to be weak and allow these killings to continue.

Bret Baier: We don't know. Well, we don't know about the response. We, across the board, guess that Iran is going to punch back. And that's the real question mark. But Norman Roule, former intelligence officer, saying they're going to have to calculate that response, too, to make sure that they come out of it surviving.

Charles Lane: They have to do something, if for no other reason than they said they would do something. And so, it's obviously very prudent to be beefing up forces in the region and hardening those targets. But yeah, they don't want to let this thing get out of hand with the United States for their interests. But yeah, it's a, it's a tense time to be an American abroad in that region because you have to believe you're on their target list. And I guess I would say that they might strike in Europe because they would think, perhaps, that that could drive some sort of wedge between the U.S. and the European allies. Norm pointed out that that's an important vulnerability. They have a lot of options. I suspect one thing they will at least threaten to do is step up the enrichment of uranium, maybe scrap the nuclear deal, get out of that completely. But they, I think, do have to worry that, if the president is capable of something like this, he's capable of more.

Steve Hayes: And the irony, of course, is that he had shown such restraint previously.

Charles Lane: When the Iranians had attacked the oil facility in Saudi Arabia, and maybe they got a little cocky.

Bret Baier: They might have gotten flatfooted, Steve, because -- yeah, it was pretty brazen for Soleimani to be at the Baghdad airport with this meeting of the legion of doom, essentially, planning whatever they were planning, according to U.S. officials.

Steve Hayes: Yeah. It's consistent with what we've seen from Soleimani over the years, though. He's increasingly -- since 2014, this is somebody who lived in the shadows largely until 2014. And in 2014, there was a different routine for him. He decided that he was going to show his face and he was essentially going to poke the United States and our allies by being photographed in places like Syria and places like Iraq. I think it's really important at this point that the administration, that we not have a discussion on the assumption. I think most of the discussion today has taken place on the assumption that this was the one-off, that we took Qasem Soleimani and now this is done.

Bret Baier: Is done?

[crosstalk]

Steve Hayes: I think it'd be entirely possible.

Bret Baier: -- happening right now?

Steve Hayes: Yeah. I think it's entirely possible that this is the beginning of a longer campaign to do what Mike Pompeo and others said the United States was going to do if Iran continued to be provocative.

[crosstalk]

Mollie Hemingway: And just worth noting that this is a continuation of how the administration has been since the beginning. You know, one of the first things Trump did is go to Saudi Arabia, reorients our alliances there, tears up the Iran deal and, you know, has these really serious sanctions that affected including Soleimani. And this is the -- if they -- if you've been listening to what Trump, and Pompeo, and others have said, this should not be as much of a surprise as it is for some.

Bret Baier: For the Democrats who point to this tweet back in 2011 that says, Donald J. Trump, “In order to get elected, Barack Obama will start a war with Iran." Some others are saying this is all about turning the focus away from impeachment. You say what?

Charles Lane: I say that who knows what makes Donald Trump tick in foreign policy. He had more recently been talking about endless war and we have to get out of the Middle East. It's a bunch of sand 7,000 miles away. I think what happened here is that the Iranians did cross a red line that Pompeo had laid down about killing an American and, with the president having held off before, they felt they had to go forward. I wish that we could all feel a lot surer that this president knows how to sustain and manage the kind of campaign Steve just talked about, but he has a little problem with that kind of policy management and that's -- the plan B is the big question mark.

Bret Baier: We'll see. Kim Jong-un could be gulping a little bit tonight as well. Next up, the Friday Lightning Round, the president's outreach to evangelicals, and winners and losers.

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Bret Baier: It's Friday, that means a trip down to the Candidate Casino. We'll put the evangelical outreach on hold till next week. We're back with the panel. All right, Steve $100 in chips you got to place bets where you going?

Steve Hayes: Yeah, I did. I did 25 on Biden, 25 on Buttigieg, 15 on Sanders, 15 on Warren, 15 Klobuchar who has a little momentum, I think, in Iowa and 5 dollars on Yang. I feel like the Warren 15 dollars is a little high. She seems to be kind of flatlining and she's losing momentum. Her fundraising was poor, she rose to 25 in the national polls and now has sort of leveled off at 15 that doesn't feel like she's going anywhere.

Bret Baier: Place your bets Mollie.

Mollie Hemingway: I keep wanting to pare down how many people I'm betting on, and its just so hard because it's up and down for everybody. Biden 25, he gets most of my chips. Sanders strong at 15. I got Bloomberg, Warren and Klobuchar each at 10. Bloomberg seems to be doing well with his buy his way to the White House strategy. Buttigieg in there with 5 and still someone not yet running gets 25 bucks.

Bret Baier: 25. Who is that person?

Mollie Hemingway: I don't know. If I knew, I would put that name in there, but it just seems they don't want to pick any of these people. So.

Steve Hayes: 25 dollars.

Bret Baier: Michelle Obama.

Charles Lane: It could induce me to get into the race.

Bret Baier: Yeah, no kidding. All right, Chuck.

Charles Lane: I'm actually narrowing the field. I have 45 on. Biden, who I think just you know, he keeps on ticking, and he keeps on hanging in there. Bernie Sanders, because he's done so well in recent days, I'm putting in a solid second. And I agree, Steve you did put a little too much on Warren I gave her 10 dollars and then, you know, 10 bucks on somebody coming out of the PAC.

Bret Baier: And this is less than a month from the Iowa caucuses. There's a lot of chips on this table. Okay winners and losers. Here we go. Winners first.

Steve Hayes: My winners are Green Bay Packers. I haven't made them a winner in more than more than two years. The Packers don't have a playoff game this weekend because they earned a bye with their 13-3 record under their first-year head coach. So, looking forward to the playoffs for the Packers. My loser, the Dallas Cowboy fans, they've suffered through the Jason Garrett tenure. He is not yet been fired it appears like he will be, but they are living this sort of football--

Bret Baier: Limbo.

Steve Hayes: Firing purgatory, right now.

Bret Baier: Winner or loser?

Mollie Hemingway: Last weekend, we saw two attacks on religious congregations, and the one in Texas that happened could have been so much worse if not for Jack Wilson, who is my winner of the week, who took down the man who killed two innocent men there at that congregation by being -- he was the security guard at that church. My loser for the week is impeachment. It was already not doing so well, and on a week like this with it with the events of the recent days, it looks particularly petty. Mitch McConnell today said that Nancy Pelosi's attempt to play games with it was not going to pass muster with him, and she needed to get the articles over to him so he could deal with them --

Bret Baier: Winner. Loser.

Charles Lane: My winner of the week is Carlos Ghosn, I think it's how you pronounce it or maybe it's Carlos Ghosn, the former head of Nissan who pulled off the covert operation of the century and escaped from a constantly watched house in Japan to get away from the prosecutors there. And my loser this week is Julian Castro, the former housing secretary who was running for president on the Democratic side. Had to drop out of the race. Somewhat disappointing run for him.

Bret Baier: All right panel we made it through. Have a good weekend. When we come back, notable quotables.

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[begin video clip]

Female Speaker: Please stand up and stop this hatred. We want to go to our synagogues and feel safe. We want to go to groceries and malls and feel safe.

Male Speaker: I don't see myself as a hero. I see myself as doing what needed to be done to take out the evil threat.

Female Speaker: I wonder if Joe Biden would consider choosing a Republican as a running mate.

Joe Biden: The answer is I would, but I can't think of one now.

Elizabeth Warren: Let's face it, this year in America has been anything but normal.

Crowd: Peace on the world Happy New Year.

Male Speaker: There's no doubt in my mind that Iran is behind this. Iran has been the biggest foe of the United States for a number of years now.

Mike Pompeo: We didn't send pallets of cash to the Iranians. We didn't pay for hostages. We didn't create a deal which would have given them a clear pathway to a nuclear weapon.

Donald Trump: I have a very good relationship with Kim Jong un, and I hope his Christmas present is a beautiful vase. That's what I'd like a vase.

Male Speaker: Nothing says progress like a fat man on a white horse, right?

[end video clip]

Bret Baier: That's one week in covering the news. That's a lot of it. Please join us Sunday, Fox News Sunday Chris Wallace. Chris' special guest will be the secretary of state, Mike Pompeo, and that will be chock full of the latest news after this strike fallout around the world. We'll have continuing coverage on Fox News throughout the weekend to see what comes next. Thanks for inviting us into your home tonight. That is it for this Special Report. Fair, Balanced and Still Unafraid. The Story hosted by my colleague Martha MacCallum back for the New Year starts right now. Let's see, Martha we have an impeachment trial, the Iran drone strikes oh, yeah Iowa caucuses.

Martha MacCallum: Yeah, and as you said, it's only day three of the 2020. Happy New Year. Good to see you Bret.

Bret Baier: You too.

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