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US-President Elect Barack Obama [Images] has tagged US Senator Hillary Clinton [Images], Obama's rival during the Democratic primary, for the position of Secretary of State, a CNN report said quoting Obama's aides.

She will be formally nominated after Thanksgiving.

The Secretary of State is oft-considered the President's chief diplomat and 'foreign policy czar'; the office is unquestionably one of the most important in any US President's Cabinet.

This comes after a week-long speculation that business and charity ties of Hillary's husband and former US President Bill Clinton [Images] might preclude her from the position, because of a potential conflict of interest.

As former President, Bill has travelled the world for speaking engagements and consultations. Also, his Clinton Foundation is said to have received several hefty contributions from foreign donors, which some pundits had observed would make Hillary's position as Secretary of State untenable.

The former President's ties have been under intense scrutiny as part of Hillary's vetting process, reports said this week.

In response to the news, Clinton's senior adviser Philippe Reines reportedly told CNN that 'any and all speculation about Cabinet or other administration appointments is for President-elect Obama's transition team to address.'

The other potential candidates for Secretary of State are wide-ranging and diverse in their political leaning and experience: Republican US Senators Chuck Hagel and Richard Lugar, Mumbai-born US journalist and foreign policy expert Fareed Zakaria, Democratic Governors Bill Richardson (New Mexico) and Janet Napolitano (Arizona), to name a few. 

Napolitano, an early Obama supporter who is a popular governor and a rising star in the Democratic Party, will instead be offered the position of Secretary of the Department of Homeland Security, reports have said.

President-Elect Obama has drawn criticism from both sides of the political spectrum this week, as many conservatives and some liberals have lambasted the make-up of his Executive Office, which is rapidly taking shape, as being the 'same old' Washington DC politics, because over half of Obama's appointments thus far have ties to Bill Clinton's 1992-2000 administration.

This, they say, from a politician who promises to bring change to the White House.

Thus far, Obama has named Rahm Emmanuel his White House Chief of Staff, and nominated Napolitano as the secretary of DHS, Eric Holder as the Attorney General and Tom Daschle for secretary of Health and Human Services.

Emanuel was a top advisor to former President Clinton from 1993 to 1998, as first assistant to the President for political affairs and later senior advisor to the President for policy and strategy.

He has often been likened to a 'strongman' for the Democratic Party, not above engaging in partisan politics to advance an agenda. But he also has a reputation for getting things done, which is likely why the rather inexperienced Obama has tagged him.

Holder, meanwhile, served as deputy Attorney General to Janet Reno under the Clinton administration, and, like Emmanuel, is considered a long-time DC politician.  If he's successfully nominated and selected, Holder would become America's first African-American Attorney General.

Interestingly, it was Obama's immediate predecessor, George W Bush [Images], who first appointed an African-American Secretary of State, former US military General Colin Powell. After Powell resigned in November 2004, Bush appointed Condoleezza Rice [Images], another African-American, to the post.

Should Hillary successfully be named to the office, she would be the third woman to hold the position after Madeline Albright under President Bill Clinton and Secretary of State Rice.

Former Senate Majority Leader and US Presidential hopeful Tom Daschle was a US Senator from South Dakota during the Clinton administration, becoming the Democratic Party's leader in the Senate in 1994. He worked with President Clinton and Republican leaders of the Senate to pursue a moderate agenda during the Clinton years and was a widely-respected DC politician until his shocking loss in the 2004 Senate elections.

If he is indeed named secretary of the Department of Health and Human Services under Obama, he would lead the charge to actualize the President-elect's ambitious plan to reform US healthcare.

When asked this week if the US, given the domestic and international financial crisis, can afford to reform its health care system, Daschle said, 'We cannot afford not to do it. If we do nothing, we will be paying twice as much on health care in 10 years as we do today.'

Republicans are still waiting for the President-elect to make good on his promise to nominate at least one Republican to his Cabinet, a promise he re-iterated during a CBS '60 minutes' interview last week.

It has been rumoured that Obama will keep on-board current Secretary of Defense Robert Gates, a Bush appointee.