WASHINGTON - Barack Obama was set to Monday formally nominate his ex-rival Hillary Clinton as secretary of state and roll out the national security team he will charge with defusing multiple foreign crises.

The president-elect was also expected to publicly say he has asked President George W. Bush's Defense Secretary Robert Gates to stay on at the Pentagon and to name former marine general James Jones as his national security advisor.

Obama's formal roll-out of Clinton at a press conference in Chicago nearly a month after his historic election triumph will cement a remarkable alliance following the pair's acrimonious Democratic primary duel this year.

"I can confirm that she will be in Chicago tomorrow to be named Secretary of State," a person close to the former first lady and New York senator told AFP on condition of anonymity.

Obama and vice president-elect Joseph Biden will name the team just days after the Mumbai terror assaults landed them with a fresh South Asia crisis to add to the plethora of US national security challenges.

After taking office in January at a time of rare national peril, the Obama team must work out how to extricate US troops from Iraq, deal with the Iranian nuclear drive and address deteriorating conditions in the war in Afghanistan.

All this will come with the US economy in meltdown and successive market and financial crises cascading around the world, threatening to further destabilize a fractious global security environment.

As well as Gates and Jones, sources said Obama will complete 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 is also set to be formally named as US ambassador to the United Nations while retired admiral Dennis Blair is set to be Director of National Intelligence.

Former president Bill Clinton cleared the way for the announcement of his wife as 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 charitable foundation by the end of the year, officials on Obama's transition team said on condition of anonymity.

He has also agreed to submit future engagements, speeches and sources of income to the State Department and the White House and to take a more behind-the-scenes role in the daily running of his foundation, sources said.

The Obama transition team formally announced that the national security team would be introduced in a press conference at a downtown Chicago hotel on Monday at 9:40 a.m. (1540 GMT).

Last week, the president-elect named a line-up of intellectual heavyweights and big political egos for his economic team, in a move which reassured markets traumatized by the raging financial crisis.

Obama defended his decision to name big-time political players to the Clinton administration to his team, but said that the troubled times dictate the need for experience in his economic and national security teams.

Naming 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, a former NATO commander is also respected on Capitol Hill and may be particularly sought by Obama for his expertise on the Afghan war, which the president-elect has vowed to make a top priority.

The security challenge facing the next president has been underlined by the carnage in India after gunmen massacred up to 172 people in Mumbai.

"These terrorists who targeted innocent civilians will not defeat India's great democracy, nor shake the will of a global coalition to defeat them," Obama said in a statement Friday.

"The United States must stand with India and all nations and people who are committed to destroying terrorist networks, and defeating their hate-filled ideology."

On Tuesday, the president-elect is set to discuss the fiscal crisis ravaging US state governments, with a meeting of governors in Philadelphia.

It will be only his second post-election trip outside of Chicago.