Obama names Clinton, Gates to lead foreign policy

By Jeff Mason and Caren Bohan

CHICAGO (Reuters) - President-elect Barack Obama named former rival Hillary Clinton as secretary of state on Monday and said Robert Gates would remain defense secretary in a national security team charged with recasting America's leadership role in the world.

Clinton and Gates, who have been at odds with Obama in the past over foreign policy and defense issues, will implement Obama's vision of rebuilding the U.S. image abroad while overseeing wars in Iraq and Afghanistan.

Obama played down differences with the woman he narrowly beat for the Democratic presidential nomination and said he would welcome vigorous debate among his opinionated team.

"I assembled this team because I am a strong believer in strong personalities and strong opinions. I think that's how the best decisions are made," Obama said, calling the former first lady a "dear friend."

"I will be responsible for the vision that this team carries out and I expect them to implement that vision once decisions are made," Obama added. "So as Harry Truman said, the buck will stop with me."

On one of the biggest foreign policy issues his administration will face, Obama repeated his belief that U.S. troops could be out of Iraq within 16 months of his taking office, though he said he would consult advisers on that.

Clinton, standing next to her former opponent, said the United States must rely on its friends to help confront threats like global warming and terrorism -- an implicit rebuke to the go-it-alone approach of President George W. Bush.

"While we are determined to defend our freedoms and liberties at all costs, we also reach out to the world again, seeking common cause and higher ground," she said.

"By electing Barack Obama our next president, the American people have demanded not just a new direction at home but a new effort to renew America's standing in the world as a force for positive change."

The New York senator said it would be hard for her to leave the U.S. Senate but believed taking over the nation's top diplomatic role was the best way for her to serve the country.

Along with Clinton and Gates, Obama named retired Marine Gen. James Jones as national security adviser and Arizona Gov. Janet Napolitano as head of the homeland security department.

He also named former Justice Department official Eric Holder as attorney general and Susan Rice, a foreign policy adviser to his presidential campaign, as U.N. ambassador, which he will make a Cabinet-level position.

All the nominees are expected to win quick confirmation by the Democratic-controlled Senate, although the Cabinet itself may be a more fractious place.

"No doubt there will be frictions at times," said Stephen Flanagan of the Center for Strategic and International Studies think tank.

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