Washington  - President-elect Barack Obama on Monday nominated Hillary Clinton as secretary of state and announced he would keep Defence Secretary Robert Gates in his current job in widely expected moves to set up his national security team.

Clinton, 61, his former rival, will leave her job as the senator from New York if confirmed to become the nation's next top diplomat. The reappointment of Gates, 65, is designed to ensure a smooth transition takes place as the United States fights two wars in Iraq and Afghanistan.

Gates became the head of the Pentagon under President George W Bush in December 2006. Obama also named former Marine General James Jones to serve as national security advisor.

Naming Clinton to head the State Department would bring a high-profile figure into his cabinet and further help heal wounds among Democrats over the dragged-out contest for the party's nomination.

Many Democrats who supported the former first lady refused to back Obama's candidacy for the White House.

"I have no doubt that Hillary Clinton is the right person to head our State Department," Obama said.

With Gates at the helm, Obama keeps in place a key architect of the troop buildup in Iraq that contributed to the sharp decrease in violence during the past 15 months. But Gates will be given new orders: Obama has pledged to have all US combat forces out of Iraq within 16 months of taking office January 20.

"Afghanistan is where the war on terror began, and it is where it must end," Obama said. "And going forward, we will continue to make the investments necessary to strengthen our military and increase our ground forces to defeat the threats of the 21st century."

Asking Gates to stay on also helps Obama fulfill a pledge to have a bipartisan cabinet. Gates is a registered independent but has served in numerous Republican administrations. He replaced Donald Rumsfeld as Pentagon chief in December 2006.

Jones, 64, was the commandant of the Marine Corp from 1999 to 2003 before becoming the NATO's top military commander in 2003. He retired in 2007.

Clinton, defeated by Obama for the Democratic presidential nomination, said she will work to restore America's standing in the world following the Bush administration.

"We know our security, our values and our interests cannot be protected in advance by force along - nor by Americans alone," Clinton said.

Obama named Susan Rice as ambassador to the United Nations. Rice was among his top foreign policy advisors during the campaign and formerly served on the National Security Council. (dpa)