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AFP - Barack Obama Monday nominated his erstwhile political foe Hillary Clinton as his secretary of state, as he rolled out a muscular national security team rich in global political star power.
"In this uncertain world, the time has come for a new beginning -- a new dawn of American leadership to overcome the challenges of the 21st century, and to seize the opportunities embedded in those challenges," Obama said Monday.
Facing a perfect storm of foreign policy crises deepened by last week's Mumbai attacks, the president-elect also announced that Defense Secretary Robert Gates will stay on in his post.
Fifty days before he is sworn in as president, Obama also selected former NATO supreme commander James Jones for the vital right-hand man role of national security advisor.
The picks are the latest collection of political power players to join a formative cabinet replete with experience on the world stage and in Washington's political jungle.
Obama unveiled his team at a Chicago press conference after several weeks of frenzied speculation sparked by his offer to Clinton to become top US diplomat.
The remarkable political alliance writes another unlikely chapter in the rollercoaster political drama of Bill and Hillary Clinton and symbolically consigns this year's fiery Democratic primary feud to US history.
Obama and vice president-elect Joseph Biden named their team just days after the Mumbai assaults handed them a fresh South Asia crisis to add to the plethora of US national security challenges.
After taking office in January, the Obama team must extricate US troops from Iraq, deal with the Iranian nuclear drive and address deteriorating conditions in the Afghan war as well as deal with a resurgent Russia.
At the same time, the US economy is in meltdown and successive financial crises are cascading around the world, threatening to further destabilize a fractious security environment.
Obama completed the top layers of his national security team with Arizona Governor Janet Napolitano as Homeland Security chief.
Pending Senate confirmation, long-time Obama foreign policy aide Susan Rice was formally named as US ambassador to the United Nations.
And Obama officially unveiled Eric Holder as his pick for attorney general, several weeks after his nomination leaked out in Washington.
Former president Bill Clinton cleared the way for his wife to become the face of US foreign policy abroad by reaching a complicated agreement on his financial arrangements and future role on the world stage.
There had been fears her nomination could falter over the appearance of conflicts of interest between her husband's charitable foundation and lucrative speechmaking schedule, and US foreign policy.
Clinton has agreed to release the list of donors to his foundation by the end of the year, transition officials said.
He will also submit future engagements, speeches and sources of income to the State Department and the White House and to take a more hands-off role in the daily running of his foundation, sources said.
James Rubin, a former State Department spokesman under president Clinton, said Obama and the former first lady would work well together, despite the acrimonious six month battle for the Democratic White House nomination.
"They're two people who've done something unique, and they will always have a special bond," he told CBS News.
"It's to his credit -- he wants a strong secretary of state and I think she will be."
Last week, Obama drafted a string of intellectual heavyweights into his economic team, reassuring markets traumatized by the raging financial crisis.
Selecting Gates, who is respected across the political aisle in Washington for his performance since taking over from Donald Rumsfeld two years ago, would allow Obama to honor his pledge to name at least one Republican cabinet member.
Jones is also respected on Capitol Hill and has direct experience of the Afghan war.
Jones criticized the Bush administration's strategy in Afghanistan in a report issued earlier this year by the Atlantic Council of the United States, which he chaired.
"Make no mistake, NATO is not winning in Afghanistan," the report said.