Last week Bill Moyers sat down with Leila Fadel while she was stateside to receive a George Polk Award for Foreign Reporting. In this interview she bluntly lays bare all the spin on Iraq and Iran in a way that is all too rare these days.

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I can't say enough good things about this brave woman, but I would echo all of what Spencer and Matthew have written about her and then some. McClatchy, one of the few sane voices on Iraq since before the invasion (when they were still known as Knight-Ridder) continues to impress.

Watch the full interview on Moyers' PBS website, and you can check out Leila Fadel's McClatchy blog, Baghdad Observer and her team's Inside Iraq.

Transcript after the jump.

BILL MOYERS: Just this week Iraq was struck by a fresh wave of violence. At least 50 people died from a bombing at a funeral - a funeral! Sixty people were killed earlier in the week, and 120 wounded.

It's difficult … but gruesome news doesn't go away because we look away. So consider these photos taken in Baquba, Ramadi, and Mosul -- victims of car bombs and suicide attacks.

Such scenes are routine for the people in Iraq and the journalists who still cover them. One of those journalists is Leila Fadel - the Baghdad bureau chief for the McClatchy Newspaper Group. She was born in Saudi Arabia of a Lebanese father and a mother from Michigan. The fact that she speaks Arabic may have saved her life when she was covering the war between Hezbollah and Israel.

She's reported on everything from Iran's relationship with Iraq… to the impact of war on families in ethnically torn neighborhoods …to the constant stress on US troops. And she does it all so well that this week she received a George Polk award for foreign reporting - an honor bestowed for courage under fire.

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BILL MOYERS: [W]e read a lot about the thousand Iraqi soldiers who quit the fight in Basra, laid down their arms. And this week there were stories of more defectors in Sadr City. Are these people cowed? Are they afraid? What's happening?

LEILA FADEL: I think it's a combination of things. I think there are people who don't feel that they should be fighting the Mahdi Army, who don't feel that they should be killing their Shia brothers because most of the Iraqi security forces are Shia. And I think there is also threats. I mean, we had reports of the Mahdi Army going house to house in Sadr City and if they were Iraqi security forces, they would say, "We know where you live. We know where your family is. And if you fight us, we'll find you." And so I think it's a combination of the fear that their families will be killed and that they're being killed as well as a moral objection by some of them.

BILL MOYERS: Moral objection?

LEILA FADEL: I think so, yes.

BILL MOYERS: To?

LEILA FADEL: To fighting who the people they consider their brothers.

BILL MOYERS: You broke the story that it was an appeal to an Iranian source. You broke the story that the Iranians actually intervened to stop the fighting in Basra, right?

LEILA FADEL: That's right. Yeah, that's right.

BILL MOYERS: So there's real evidence on the ground that Iran is influential in Iraq.

LEILA FADEL: Yes. I mean, I don't think anybody questions that Iran is influential in Iraq. I don't know that all of Iran's influence in Iraq is bad influence. Iran has chips on every table, you know? They're betting on everybody. You'll talk to Iraqi officials who say that the Iranians are willing to give money to anybody. You have Sunni leaders going to meet with Iranian officials in Iran. The man who is the Iraqi affairs man is the head of the Qods force in Iraq in the Iranian Revolutionary Guard, who the United States says is a terrorist.

He is the man that deals with Iraqi affairs. He is the man that deals with Iraqi officials. He is the man that was involved when an Iraqi delegation went to Iran in March to stop the fighting in Basra and apparently was the one that was helping get Moqtada Sadr to say stand down. Now maybe it's a bad thing that the Iranians have so much influence, but what do we expect when we put a Shia government into power? These men took refuge and had funding in Iran.

BILL MOYERS: Let's listen to what President Bush said recently about Iran's influence in Iraq.

PRESIDENT BUSH:The regime in Tehran also has a choice to make. It can live in peace with its neighbor, enjoy strong economic and cultural and religious ties. Or it can continue to arm and train and fund illegal militant groups, which are terrorizing the Iraqi people and turning them against Iran. If Iran makes the right choice, American will encourage a peaceful relationship between Iran and Iraq. Iran makes the wrong choice, America will act to protect our interests, and our troops and our Iraqi partners.

BILL MOYERS: What's your reaction hearing the President talk that way?

LEILA FADEL: First of all, just in the practical sense, the American Army's tired. They're on third and fourth rotations in Iraq. Can they really go after Iran at this point? And secondly, what are we going to do if we go into Iran, the United States? They say that the Iranian government is bringing weapons into Iraq and funding and training the Shia militias. I don't know if the Iranian government is doing that.

I know that they say that the rockets hitting the Green Zone are 107-millimeter rockets that are made in Iran. I know they say the deadliest weapon used against U.S. troops are the EFPs, and those are deadly. But do you really go and invade the neighboring country of the unstable nation that you're already in?

BILL MOYERS: But do you, as a reporter, find evidence of mischief on the part of Iran?

LEILA FADEL: Oh, definitely. I don't think Iran is not mischievous. I don't think the United States is not mischievous in Iraq. I think Iran has a vested interest in having a weak Iraq next to them because they did have an eight-years war with Iraq. They did have a hostile environment between the two nations. And I think it's in their interest to have some control over that neighbor. And that's what they have. I mean, they have groups, the parties that are in power are the parties that were created in their area, are the parties that thrived and fought Saddam from Iran. And so when the best friend in the government of the United States, which I explain the Islamist Supreme Council of Iraq, when Hakim is coming to the White House and speaking to President Bush but also going to Iran and speaking to Ahmadinejad and is very, very much influenced by Iran, it's really unclear what we're complaining about. I mean, we should have expected that this government would be Iran friendly.

BILL MOYERS: Here's Senator Joe Lieberman speaking on this when General Petraeus and Ambassador Crocker were in town recently.

SENATOR LIEBERMAN: Let me ask you first, are the Iranians still training and equipping Iraqi extremists who are going back into Iraq and killing American soldiers?

GENERAL PETRAEUS: That is correct, Senator.

SENATOR LIEBERMAN: Is it fair to say that the Iranian-backed special groups in Iraq are responsible for the murder of hundreds of American soldiers and thousands of Iraqi soldiers and civilians?

GENERAL PETRAEUS: It certainly is. I do believe that is correct. Again some of that also is militia elements who have then subsequently been trained by these individuals.

BILL MOYERS: What about that?

LEILA FADEL: Well, I don't, you know, the U.S. military says that they have people in detention that say they were trained and supplied in Iran and apparently have killed U.S. soldiers. I don't know. That's what they say. I don't know that it's true. They have-- and they also, you know, they're calling these Iranian-backed special groups. The entire Iraqi government is Iranian backed. You know, all these-- they say that if the United States pulls out, Iran says they can fill the security vacuum in Iraq. That's what Iran says. And Iran says, on their side of the story when they've never admitted to being involved in these things publicly. And when you ask them about it, they say, "Well, actually the problem is the United States. They want unrest in Iraq so they'll never leave."

BILL MOYERS: So, on the one hand, Iraq is working behind the scenes to broker a cease fire in Sadr City. And yet we're, again, making Iran out to be the one behind the violence. I mean, there's a paradox there, right?

LEILA FADEL: Right. Right. I don't think Iran is nothing's black and white. I don't think Iran is the white knight or the evil villain either. I think that Iran is playing a political game in Iraq. ...