By Matt Spetalnick and Tabassum Zakaria
WASHINGTON (Reuters) - President Barack Obama on Friday nominated John Kerry to replace Hillary Clinton as secretary of state, calling the veteran U.S. senator the "perfect choice" for America's top diplomat as he began reshaping his national security team for a second term.
Obama settled on Kerry, chairman of the Senate Foreign Relations Committee and the 2004 Democratic presidential candidate, after the front-runner, U.N. Ambassador Susan Rice, withdrew from consideration last week.
Even as Obama put one important piece of his revamped Cabinet in place, he held off on naming a new defense secretary. The delay came in the face of a growing backlash from critics of former Republican Senator Chuck Hagel, who is considered a leading candidate to replace Leon Panetta at the Pentagon.
With Kerry standing at his side, Obama expressed confidence that the senator - a stalwart supporter who has long coveted the State Department job - would win swift confirmation from his Senate colleagues.
"As we turn the page on a decade of war, he understands that we've got to harness all elements of American power and ensure that they're working together," Obama said. "John's earned the respect and confidence of leaders around the world. He is not going to need a lot of on-the-job training."
The announcement fell short of the White House's earlier hopes of rolling out national security appointments, including a new CIA director, all at once before Christmas. That ambition was thwarted not only by the Hagel controversy but other matters that have occupied Obama's attention - the standoff over the "fiscal cliff" and last week's Newtown gun massacre.
Kerry, 69, will take over from Clinton, who has been consistently rated as the most popular member of the president's Cabinet.
But he will also have to pick up the pieces after a scathing official inquiry found serious security lapses by the State Department in the deadly September 11 attack on the U.S. diplomatic mission in Benghazi, Libya - a report that has tarnished the final days of Clinton's tenure.
Kerry's nomination follows a political firestorm that engulfed Rice, seen as the early favorite for the State job, spearheaded by Republicans fiercely critical of her role in the administration's early explanations for the Benghazi assault.
Rice was defended by Obama, but she said on December 13 she was pulling her name from consideration to avoid a potentially lengthy and disruptive confirmation process.
Kerry, known for his role as a Democratic power broker in the Senate, offers no such challenges.
His selection sets a pragmatic tone as Obama begins overhauling his national security team.
Kerry will be the leading Cabinet member charged with tackling pressing global challenges, ranging from upheaval in the Middle East to Iran's nuclear standoff with the West and winding down the war in Afghanistan - all at a time of fiscal austerity at home.
SUBDUED NOMINATION ANNOUNCEMENT
Obama appeared subdued as he announced the nomination. He and Kerry had just returned from a funeral service for Hawaii Senator Daniel Inouye at the National Cathedral.
Kerry looked on intently as Obama spoke, nodding occasionally. But the lawmaker known for sometimes long-winded speeches was not given a chance to address reporters at the White House. Clinton was absent due to illness but issued a statement saying Kerry would offer the "highest caliber leadership" at the State Department.
Kerry, a decorated Vietnam War veteran, has forged a close working relationship with Obama and gave him the keynote speech assignment at the 2004 Democratic convention that boosted a then little-known Illinois state legislator onto the national stage, opening the way for his meteoric rise.
After losing narrowly to Republican George W. Bush in the 2004 presidential election, Kerry forged a new identity as a congressional leader on foreign policy. He often served as a low-profile emissary and diplomatic troubleshooter for the Obama White House in places like Afghanistan, Pakistan and Syria.
Kerry played the role of Mitt Romney in Obama's debate practice during the 2012 campaign, and afterwards Kerry joked that he would need an "exorcism" to get the Republican out of his system. "Nothing brings two people closer together than weeks of debate prep," Obama quipped to reporters on Friday.
White House aides acknowledge, however, that Kerry does not have as close of a personal bond with Obama as Rice has. She said, in a message on Twitter, that she looked forward to "working with him on the president's national security team."
Kerry's departure from the Senate forces Democrats to defend his seat, where the party has only a slim majority. Just-defeated Massachusetts Republican Senator Scott Brown, who took office in early 2010 after winning the last special election for a Massachusetts seat, is widely expected to run.
The drumbeat of criticism against Hagel, a moderate Republican who has often broken with his party's views, could prompt Obama to reconsider whether it would be worth the likely confirmation fight if he were to chose him for the defense post.
The administration has given no sign of dropping Hagel from the short list. On Thursday it joined allies rallying to support him against an onslaught over his record on Israel and Iran led by some pro-Israel groups and neo-conservatives, but the attacks have also come from some former colleagues on Capitol Hill.
He has also come under fire from gay rights groups for remarks questioning whether an "openly aggressively gay" nominee could be an effective U.S. ambassador. Hagel issued an apology on Friday for the 1998 comment, saying it was "insensitive."
It is the second time since Obama's re-election that the White House has had to defend a Cabinet candidate who has yet to be nominated, a source of frustration for his advisers.
Also in the mix for the Pentagon job are Michele Flournoy, a former undersecretary of defense for policy, and Ashton Carter, the current deputy defense secretary.
The top candidates for CIA director, to replace David Petraeus who stepped down over an extramarital affair, are thought to be Michael Morell, currently acting CIA director, and John Brennan, a top counterterrorism adviser to Obama and a former CIA official.
(This story is corrected to fix year in paragraph 23 to 1998 from 1988)
(Additional reporting by Tabassum Zakaria; Editing by Vicki Allen and Eric Beech)