Failure on Replication Insert cause a rollback on Pub?

Fellow SQLers,

We have a transactional replication setup.  The pub going to just one Subscriber - push process on the same box.

we had an insert failure into the subscriber. We can replicate it and we know why - it was tied to the settings setting up the publication.

The record count on the pub table and the sub table were the same before the insert transaction and after the insert transaction.

1 - Is it correct that if the replication part failes on the sub that the transaction on the pub will be rolled back under this type of replication?  I have different opinions on this but this scenario seems to prove it does.

2 - If the answer to 1 is Yes, then it would be interprettted that the transaction is not truly committed for the entire process until the replicated step is clean. Correct?

Thanks,

MG