Obama turns focus to McCain, starts VP search

By John Whitesides, Political Correspondent

WASHINGTON (Reuters) - Democrat Barack Obama turned his focus to the five-month general-election fight for the White House against Republican John McCain on Wednesday and announced a three-member team to head his search for a running mate.

Obama's last remaining Democratic rival, Hillary Clinton, was planning to suspend her campaign and endorse the Illinois senator on Friday, U.S. media reported, after Democratic Party leaders urged her to drop out of the race.

Obama, the first black candidate to lead a major U.S. party into a White House race, began the task of unifying a fractured party the day after clinching the nomination.

McCain proposed that Obama join him for a series of joint summer town-hall meetings around the country. Obama's campaign manager called the idea "appealing" but proposed format changes and made no immediate commitment.

Caroline Kennedy, daughter of the late President John Kennedy, will vet prospective Obama running mates along with former deputy Attorney General Eric Holder and Jim Johnson, former chief executive of the mortgage lender Fannie Mae, who performed the same task for John Kerry in 2004 and Walter Mondale in 1984.

Near the top of their agenda will be questions about a possible teaming with Clinton, who has indicated interest in the job after her presidential bid fell short.

"We're going to be having a conversation in coming weeks," Obama told reporters when asked about the former first lady and said he was confident the party would be unified to win the general election.

Obama returned to Capitol Hill to a hero's welcome from Democrats who swarmed to shake his hand and hug him.

"Our focus now is on victory in November and on giving Barack Obama every ounce of our support," eight previously uncommitted Democratic senators said in a statement.

Democratic leaders urged remaining undecided delegates to the August convention to make up their minds by Friday.

But House of Representatives Speaker Nancy Pelosi declined to give any timeline for Clinton's to concede. "She's been through a very long and rigorous campaign," she said. "She's done beautifully. She has to wind down in her own time."

OBAMA AIMS AT MCCAIN

Obama took aim at McCain for his staunch support of the Iraq war during a speech to a pro-Israel lobbying group in Washington, saying the Arizona senator "refuses to understand or acknowledge the failure of the policy that he would continue."

"He criticizes my willingness to use strong diplomacy, but offers only an alternate reality -- one where the war in Iraq has somehow put Iran on its heels," he said. "Senator McCain offers a false choice: stay the course in Iraq, or cede the region to Iran."

In the same speech, Obama tried to smooth relations with Clinton after their long and sometimes bitter nominating fight, calling her an "extraordinary candidate and extraordinary public servant."