Clinton lays plans for Obama endorsement

By Steve Holland

WASHINGTON (Reuters) - Frustrated in defeat, Democrat Hillary Clinton is to endorse U.S. campaign rival Barack Obama on Saturday and party strategists said she needs to set aside any bad feelings and put on a convincing show of unity.

"Feelings on both sides have been pretty heated and a healing process has to go on and it has to begin tomorrow," said Democratic strategist Doug Schoen, who worked in the Clinton White House.

The sometimes bitter 16-month campaign for the Democratic presidential nomination ended on Tuesday with Obama's victory over the former first lady, but Clinton raised eyebrows by not immediately conceding defeat.

Clinton and Obama held a private one-on-one meeting on Thursday night at the Washington home of Sen. Dianne Feinstein. The California Democrat said the two candidates chatted privately for about an hour and were laughing as they left.

Clinton, a New York senator, will formally withdraw from the race on Saturday in Washington and throw her support behind Obama.

The extent of Clinton's endorsement will be of keen interest to the Obama camp. She gained more than 17 million voters during the Democratic battle, and Obama will need many of those to defeat Republican John McCain in November.

"This is a close election," said Democratic strategist Steve Elmendorf, a Clinton supporter. "It's a very important election and people have to come away tomorrow with no doubt about her enthusiasm for him winning in the fall."

Campaigning in the battleground state of Florida, McCain told reporters in Miami after a boat tour of the Everglades that a rise in the U.S. jobless rate to 5.5 percent in May was "disturbing."

"We will recover. The question is how long and how hard this is going to be," the 71-year-old McCain said.

Clinton, joined by her husband, former President Bill Clinton, greeted campaign staffers at her Washington home. Outside, campaign manager Terry McAuliffe told reporters that she would do "everything we can to help Barack Obama."

Clinton has said she would be receptive to an invitation to be Obama's running mate, but insists she is not seeking the job.

CLINTON CAMPAIGN DEBT

Clinton, frustrated by her loss and in need of some decompression time after the grueling campaign, needs Obama's help to retire her multi-million-dollar campaign debt.

Schoen said it was likely Obama and Clinton had formed a basis to cooperate at their private meeting on Thursday.

"My own take is, this was a preliminary meeting," he said.