By Jeff Mason and Caren Bohan
CHICAGO (Reuters) - U.S. President-elect Barack Obama named former rival Hillary Clinton as secretary of state on Monday and said Robert Gates would remain defence secretary as part of a national security team charged with recasting America's leadership of world affairs.
Clinton and Gates, who have been at odds with Obama in the past over foreign policy and defence issues, will implement Obama's vision of rebuilding the U.S. 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," Obama said at a news conference.
Clinton, standing with Obama on the stage in Chicago, 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.
Along with Clinton and Gates, Obama named retired Marine Gen. James Jones as national security adviser and Arizona Gov. 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 U.N. 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 U.S. 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, 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 Obama will not have the luxury of focussing only on fixing the economy as he succeeds outgoing Bush. His vice president-elect, Joe Biden, warned during the presidential campaign that Obama could be tested by a national security crisis within six months of taking office on January 20.
U.S. authorities warned last week of a possible al Qaeda threat to transit systems in and around New York City, although they added there was no specific information to confirm the plot had developed "beyond aspirational planning."
GATES OFFERS CONTINUITY
Gates has said he wanted to leave at the end of the Bush administration and it is unclear how long he plans to serve in Obama's administration.
While Gates avoided direct criticism of Obama during the election campaign, he has advocated policies that have been at odds with Obama on issues like the Iraq war.
Obama wants to withdraw U.S. troops from Iraq within 16 months of taking office, but Gates has argued against setting timetables and a quick pullout, saying it could jeopardize the security gains that have been made over the past year.
However, Gates has been praised by Democrats and Republicans since taking over the Pentagon from Donald Rumsfeld in 2006 and he would provide continuity while the United States fights wars in Iraq and Afghanistan.
Obama clashed with Clinton during a bitter campaign for the Democratic presidential nomination. Clinton famously ran an advertisement depicting a 3 a.m. crisis call at the White House to argue that Obama, a first-term Illinois senator, was not ready to be commander-in-chief.
Clinton also tended to talk tougher, once saying she would "obliterate" Iran if it attacked Israel. She criticized as "naive" Obama's call for direct presidential-level engagement with foes like Iran and North Korea.
But Clinton broadly agrees with Obama in supporting a greater emphasis on engagement in U.S. foreign policy.
Clinton's husband, former President Bill Clinton, has agreed to make public the names of more than 200,000 donors to his foundation as part of a deal with Obama to clear the way for his wife to become secretary of state, a member of Obama's transition team said.
Clinton has decided to publish his contributor lists to avoid any appearance of conflict of interest with his wife's duties as secretary of state.
(Writing by Ross Colvin and Andy Sullivan)
