CHICAGO - US PRESIDENT-elect Barack Obama selected Mr Tom Daschle, a heavyweight former senator, to be his health secretary on Wednesday, while former President Bill Clinton took steps to help secure his wife the nation's top diplomatic job.

The selection of Mr Daschle, the former Senate Democratic leader and part of Mr Obama's inner circle, signalled an intention by the Democratic president-elect to make an aggressive push to overhaul the health care system.

Another member of Mr Obama's close-knit inner-circle, Mr David Axelrod, was named senior White House adviser, according to an announcement from the president-elect's transition team.

Mr Obama is likely to rely heavily on Mr Axelrod for advice in pushing an agenda of healthcare reform, middle-class tax breaks and other domestic priorities, as he prepares to inherit a deepening financial crisis and a ballooning budget deficit.

Mr Greg Craig, a former special counsel to Mr Clinton who defended him during his impeachment troubles, will become White House counsel when Mr Obama takes office on Jan. 20.

Mr Daschle served almost two decades in the Senate and was majority leader from 2001-2003 while Democrats controlled the chamber. He has served as a mentor to the president-elect, having encouraged him early on to run for the White House and advised him during the campaign.

Two Democratic officials said the South Dakota native had accepted the job.

The agency he will lead oversees programs such as Medicare, the federal health insurance plan for people over the age of 65, which is expected to see costs balloon as the US population ages.

The department is likely to spearhead Mr Obama's charge to expand healthcare coverage to 47 million uninsured Americans, a key promise of his presidential campaign.

------Hillary Clinton considers state department job

Another Democrat passionate about health care reform, New York Senator Hillary Clinton, was weighing the option of becoming secretary of state or staying in the Senate, where she could help advance domestic policies.

Her husband, former President Clinton, offered to allow ethics reviews of future business and charitable activities should she be picked by Mr Obama to take the foreign policy post, Democrats familiar with the issue said.

The former president is working to address questions about whether his philanthropic and business work would create the appearance of a conflict of interest in the event his wife got the job.

'He is definitely helping. He is not an obstacle at all,' a Democrat familiar with the situation said.

Mr Obama continued to assemble his White House team from his transition offices in Chicago, where he held private meetings on Wednesday with Vice-President-elect Joe Biden and others.

He added a handful of former Clinton administration aides to his team, including Mr Daniel Tarullo, Ms Susan Rice and Mr James Steinberg, to advise him on policy matters as he prepares for his move to the White House.

Mr Obama, who will succeed President George W. Bush on Jan 20, released a list of names of people who will head 'policy working groups' during the next two months of the presidential transition.

Many of the names were people in the running for top jobs in the incoming administration.

Mr Tarullo, an expert on the international economy and regulatory matters and a professor at Georgetown University, was named to head up the economic working group.

Mr Steinberg, who was deputy national security adviser to Mr Clinton, and Ms Rice, who was assistant secretary of state for African affairs in the Clinton administration, will head the advisory team on national security.

Mr Daschle was listed as heading a healthcare working group.

Meanwhile, Mr Obama's goal of pushing efforts to tackle climate change got a boost after Democratic Representative Henry Waxman, a crusader against global warming, won a preliminary battle to become chairman of the US House of Representatives Energy and Commerce Committee.

In a secret-ballot vote, Mr Waxman narrowly beat current Democratic chairman Representative John Dingell, who is considered a defender of the auto industry as a native of Michigan, the home state of the Detroit automakers. -- REUTERS