He introduced Clinton first, saying of his former presidential rival, "She possesses an extraordinary intelligence and toughness, and a remarkable work ethic. ... She is an American of tremendous stature who will have my complete confidence, who knows many of the world's leaders, who will command respect in every capital and who will clearly have the ability to advance our interests around the world."

"I am proud to join you ... and may God bless you and our great country," the former first lady said in a brief turn at the lectern.

Gates' presence in Chicago made him a visible symbol of the transition in power from the old administration to the new.

The president-elect, reprising a campaign vow, said he would give the military a new mission as soon as he takes office: "responsibly ending the war in Iraq through a successful transition to Iraqi control." In his announcement remarks, he did not mention his oft-repeated pledge to withdraw most U.S. combat troops within 16 months, although he referred to it in response to a question several moments later.

Obama said he would make Rice, his pick for the U.N., a member of the Cabinet, an increase in stature from the Bush era.

Clinton, Holder, Napolitano and Rice all require confirmation by the Senate.

Jones, as a White House official, does not. Nor does Gates, already confirmed to his post.

At a news conference, Obama expressed sympathy for the victims of the terror attacks in Mumbai but declined to say whether the Indian government would be justified in pursuing terrorists in next-door Pakistan.

"This is one of those times when I have to reiterate there is one president at a time," he said. "We're going to be engaged in some very delicate diplomacy in the next days and weeks, and I think it would be very inappropriate of me to comment."

Obama drew criticism during the campaign when he said the United States would be justified in pursuing al-Qaida terrorists in Pakistan if it had "actionable intelligence."

In a debate on Feb. 26, then-candidate Clinton said of Obama, "Last summer, he basically threatened to bomb Pakistan, which I don't think was a particularly wise position to take."

Obama said disagreements sometimes are magnified during campaigns. As for his one-time rival, now Cabinet choice, he said, "I believe that there is no more effective advocate than Hillary Clinton for that well-rounded view of how we advance American interests."

Clinton will give up her seat as a senator from New York to join the Obama Cabinet. Her appointment was preceded by lengthy negotiations involving her husband, the former president, whose international business connections posed potential conflicts of interests.