U.S. president-elect Barack Obama has nominated former first lady Sen. Hillary Clinton as America's top diplomat on the world stage.

Obama said his former rival for the Democratic Party's leadership has been his friend and a source of counsel over the years. He also said Clinton has the abilities to help him tackle some of the world's most pressing issues.

"I am proud that she will be our next secretary of state. She clearly has the ability to advance our interests around the world," he said at a press conference in Chicago, where he also unveiled other members of his foreign policy and security team.

He said Clinton will help him to deal with pressing issues around the world, including nuclear concerns surrounding Iran and North Korea.

Clinton, who spoke after Obama made his announcement, said leaving the senate was a difficult decision. But the junior senator from New York noted that she wants to help Obama grapple with global issues.

"America cannot solve these crises without the world and the world cannot solve them without America," she said.

Clinton's husband, former U.S. president Bill Clinton, praised the nomination.

"As an American, I am thankful that president-elect Barack Obama has asked Hillary to be Secretary of State and that she has accepted. As her husband, I am deeply proud," he said in a statement.

Obama's security team will include Robert Gates. The Republican appointee will keep his job as U.S. defence secretary in the new administration. Gates said he wants to serve his government in the same manner that Americans choose to serve in military conflicts in Iraq and Afghanistan.

"I must do my duty as they do theirs. How could I do otherwise?" he asked.

Other appointments include:

• Eric Holder as attorney-general
• Susan Rice as ambassador to the United Nations
• Gov. Janet Napolitano of Arizona as secretary of homeland security
• Retired Marine Gen. Jim Jones as his national security adviser

Joe Biden, the vice president-elect, said the members of Obama's cabinet will help the administration carry out the president-elect's agenda.

"Each member of the team shares our conviction that strength and wisdom must go hand and hand," Biden said at the press conference.

In a question-and-answer session with reporters after the cabinet announcements, Obama said Clinton will make an "outstanding secretary of state." He said picking her did not come from "a light bulb" moment. He said instead he believes she shares his values and always wanted her to be a part of his team.

Obama also noted that he picked his advisers because of their abilities, and noted that he does not want his administration to be hamstrung by "group think."

"I am a strong believer in strong personalities and strong opinions," he said.

"I will be responsible for the vision that this team carries out and I expect them to implement that vision once decisions are made. As Harry Truman said: 'the buck stops with me.'"