US President-elect Barack Obama named former rival Hillary Clinton as Secretary of State yesterday and said Robert Gates would remain Defence Secretary as part of a national security team charged with recasting America's leadership of world affairs.

Mrs Clinton and Mr Gates, who have been at odds with Mr Obama in the past over foreign policy and defence issues, will implement Mr Obama's vision of rebuilding the US image abroad and oversee two wars in Iraq and Afghanistan.

"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," Mr Obama said at a news conference.

Mrs Clinton, standing with Mr Obama on the stage in Chicago, said the US 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.

Along with Mrs Clinton and Mr Gates, Mr Obama named retired Marine General James Jones as national security adviser and Arizona Governor Janet Napolitano as head of homeland security.

He also named former Justice Department official Eric Holder as Attorney General and Susan Rice, an Obama foreign policy adviser, as UN ambassador.

All the nominees are expected to win quick confirmation by the Democratic-controlled Senate.

The announcements have been given added emphasis by last week's rampage in Mumbai, India, where gunmen killed nearly 200 people, including at least five US citizens, ratcheting up tensions with nuclear-armed rival Pakistan.

With polls showing most Americans more concerned about the dire state of the economy than national security, Mr Obama spent much of last week naming leading members of his economic team and presenting himself as a strong chief executive officer.

But the Mumbai attacks were a timely reminder that Mr Obama will not have the luxury of focusing only on fixing the economy as he succeeds outgoing Mr Bush. His vice president-elect, Joe Biden, warned during the presidential campaign that Mr Obama could be tested by a national security crisis within six months of taking office on January 20.

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